McDonald’s has long been dogged with claims of unfair labor conditions and low pay, but the company has denied having the power to increase salaries and largely shifted blame from itself to its franchisees. Now, a ruling by a California district judge is paving the way for the corporation to be held liable for its low pay and benefits.
The decision comes as a result of one of the many lawsuits accusing McDonald’s of unfair labor practices. The suit, filed by a group of employees in northern California, alleges that McDonald’s violated various labor laws, including failing to pay overtime, failing to pay minimum wage, and mis-recording time cards.
The franchisee named in the case settled with the workers, but a judge has now ordered that the class (there are at least 400 members in the proposed class action) is now certified to pursue claims against McDonald's Corporation.
So, why is this a big deal?
As the New York Times reports, "the decision to grant class-action status shows that the judge does not buy [the] argument" that McDonald’s franchisees are solely responsible for working conditions and pay.
In a motion filed July 7, district judge James Donato writes that a class action would be a more "efficient" approach than pursuing some 400 lawsuits individually: "The proposed class members are all current or former crew members of McDonald’s who assert the same claims about their working conditions. Resolving these disputes in a single class action is a far more efficient approach than requiring 400+ individual and largely duplicative lawsuits."
This is the first time a judge has ruled that McDonald's employees may band together and go after the corporation rather than an individual franchisee.
How has McDonald's fought this in the past?
The company has long maintained that it is not responsible for its franchise workers —i.e. that it's not a "joint employer." Joint employment exists when a person is employed by two or more employers (the franchisee and the parent company, for instance), such that the employers are responsible, both individually and jointly.
Lawyers for the chain have argued that it isn't fair to hold the franchiser (McDonald's) accountable for franchisees' (individual McDonald's location operators) actions. It is the franchisees, they say, who set wages and manage working conditions, not the parent company.
Workers' strength in fighting for wages, rights, benefits, or fair treatment comes when they're able to band together to petition one controlling body. Historically, McDonald's workers have not had the right to unionize, but this may be changing.
The second part of this, the ability to petition one controlling body, is the other lingering issue. Because McDonald's has said its individual franchisees are liable for employee treatment and wages, it washes its hands of the demands made by workers, including those involved in the Fight for $15 movement. This makes it hard for more then a few dozen McDonald's employees at a time to organize, and means that even if those employees were able to unionize, they would have to petition thousands of individual franchisees, and possibly file thousands of individual lawsuits. It's a logistical impossibility.
If McDonald's were to be declared a joint employer, the fight for fair wages and benefits would work the way it does for trade groups and industries across the country: Workers could unionize, pay dues, and those dues would be used to fight for their rights, including higher wages. It could also have a lasting impact on how other other companies with franchises operate.
Legal scholar Cesar Rosado told the Chicago Tribune that if McDonald's were found to be a joint employer, "it doesn't mean that all companies with franchises (could be considered) joint employers, but many of them are very likely going to be."
The company has recently been embroiled in a separate legal dispute with the National Labor Relations Board regarding this very issue.
What does this mean for fast food employees in the future?
Employees may soon be able to introduce labor lawsuits against a large chain, rather than just against a franchisee. The judge ruled that McDonald's is not the joint employer for its franchisees under "some theories," but is still liable as an "ostensible agent." It's confusing, to be sure, but basically means that the corporation may still be held accountable for the actions of some of its franchisees.
What does McDonald's think of the ruling?
Perhaps unsurprisingly, the company isn't too happy about it. In a statement provided to Eater, a McDonald’s spokesperson said the chain was disappointed with the judge’s decision: "We are pleased with the Court’s reaffirmation that McDonald’s is not a joint employer of its franchisees’ employees. While we are disappointed with the Court’s decision to allow a select few of Plaintiffs’ surviving claims to proceed on a class-wide basis, we trust the legal process and are confident that the matter will be favorably concluded."
Read the full case, below:
• A Step Forward for Fair Pay at McDonald’s [NY Times]
• All McDonald's coverage [E]