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How McDonald's Labor Trial Could Affect the Entire Fast Food Industry

The ruling could affect hundreds of thousands of U.S. workers

Mike Mozart/Flickr

A trial is scheduled to begin in New York City today that could have massive implications for the entire fast-food industry. McDonald's years-long joint employer labor dispute is finally getting its day in court, and company executives are expected to take the stand, reports the Washington Post.

The trial will determine the answer to one major question: Can McDonald's the corporation be held legally responsible for what goes on at its thousands of independently-owned franchise stores? Here now, a simplified breakdown of how this case came to fruition, and what's really at stake here:

1) It began in 2012 with with McDonald's workers in New York City

In the beginning of what would later become the Fight for $15 movement, McDonald's employees protested for higher wages. They claim they were then retaliated against by management; their superiors warned them not to speak to protest organizers, and threatened to fire them if the protests continued.

The workers and union groups filed complaints with the National Labor Relations Board against McDonald's headquarters, claiming that McDonald's Corporation was a "joint employer" and should be held responsible for its franchisees' intimidation techniques. (Employee retaliation against workers who participate in protests and union activities is, of course, illegal.)

2) The NLRB ruled in 2014 that McDonald's is indeed a joint employer

While McDonald's did its best to pass the buck and insist that it cannot be held liable for the low wages set by franchise owners, the NLRB found otherwise: After years of complaints being filed against the company in multiple cities, the board handed down a decision in 2014 that McDonald's is in fact a joint employer — that is, it's as much responsible for working conditions at its franchised stores as its franchisees are, meaning it should be held responsible not only for low wages but also management at franchised stores retaliating against workers who participate in strikes and union activities.

3) McDonald's has tried everything it can to reverse that decision

What followed was a series of appeals and arguments by the fast food chain disputing the NLRB's decision. The company has claimed it's a "victim" of union-orchestrated attacks. Last fall, it asked a federal court to throw out a subpoena from the NLRB that forced McDonald's to hand over thousands of internal company documents; the NLRB was looking for any evidence which might show how the company illegally fought against union-backed protests across the country.

4. If the court rules against McDonald's, it could have industry-wide implications

The court upholding the NLRB's joint employer ruling would mean that all McDonald's workers would be entitled to the same benefits that corporate employees benefit from, from sick days to pay raises. (Last year McDonald's gave employees at its corporate-owned stores a dollar raise, and gave out paid vacation time — benefits that were not handed down to franchise employees.) Besides making McDonald's liable for how employees at its nearly 13,000 locations are paid and treated, such a ruling would also mean McDonald's franchise employees could unionize and negotiate directly with corporate, as the Post explains — and a union of that size could have serious bargaining power.

This decision could affect not only McDonald's, but other similar companies where franchisees hire employees on the company's behalf — meaning giant fast food companies across the country could suddenly be forced to take responsibility for working conditions at all of their locations, not just the ones that fall under their corporate umbrellas. While labor groups see this as a major boon for workers' rights, the National Restaurant Association argues the NLRB's decision is just "the latest example of a federal agenda aligned against small businesses" that would "have dire consequences to franchisees, franchise employees, and the economy as a whole."