An attorney for McDonald’s Corp. told a federal administrative judge the company is a victim of a union-orchestrated attack on its brand, as legal proceedings got under way in a labor dispute that could upend the relationship between big retailers and their franchisees.
At issue in the hearings is whether companies like McDonald’s share responsibility for the actions of their franchisees, particularly regarding complaints about low wages paid to fast-food workers.
The National Labor Relations Board’s general counsel, an Obama administration appointee who functions as the nation’s chief labor law prosecutor, determined in July that in the case of McDonald’s, the answer is yes. He later issued complaints alleging the fast-food company and several franchisees violated the rights of restaurant workers who participated in activities to improve wages and working conditions.
Depending on how the case plays out, the dispute could make it easier for labor unions to organize fast-food workers, negotiate wages and expose franchisers in a range of industries to greater liability in labor matters.
Fast Food Forward, a group backed by the Service Employees International Union, has been organizing demonstrations at McDonald’s and other fast-food restaurants, demanding a $15 hourly minimum wage and the right to form a union.
A key question is determining when a corporate brand owner like McDonald’s becomes jointly responsible for labor violations at its franchisees. Currently, a parent company would have to have direct and immediate control over personnel matters like hiring and firing. The case could decide whether it is enough that the parent exercises control over quality, the brand and training.
An issue that flared on Monday was whether McDonald’s should be allowed to subpoena investigative and communications firms retained by the union to assist with SEIU’s worker-rights campaign. The company argued that it has the right to know more about the motives behind the campaign.
“We believe we have the right to defend our company from these relentless attacks,” Jones Day partner Willis Goldsmith, who represents McDonald’s, told Judge Esposito.
Attorneys representing the NLRB’s general counsel, SEIU and companies the union hired to assist with its worker rights campaign told the judge that McDonald’s didn’t have a right to those documents. The judge didn’t rule on whether to revoke the subpoena.
McDonald’s maintains that its franchisees, which own 90 percent of McDonald’s more than 14,000 U.S. restaurants, set their own wages and control working conditions. It has wielded that argument as it faces intensifying labor protests and mounting lawsuits over worker conditions.
