McDonalds Loses Ability To Shield Itself From Worker Lawsuits

In a ruling that raises the stakes for numerous fast food worker efforts, the National Labor Relations Board’s (NLRB) top lawyer said on Tuesday that McDonald’s Corp. is responsible for the actions of the owner-operator franchisees who run the vast majority of its stores.

The arrangements McDonald’s makes with its franchisees have long been understood to insulate the corporation from worker lawsuits. Because the buck stopped with individual owner-managers rather than with at the company’s Illinois headquarters, worker lawsuits and unionization efforts were limited in scope and unable to seek remedies from the company’s $5.6 billion in annual corporate profits.

Workers have repeatedly challenged that interpretation of the franchisee relationships, most recently in a slew of class-action wage theft lawsuits this spring. Those cases centered on a computer system installed by McDonald’s at franchisee stores that compares labor costs to money coming in in real-time, encouraging managers to fiddle with workers hours and timesheets as necessary to keep that expenses ratio as low as possible at all times.

http://thinkprogress.org/economy/2014/07/29/3465518/mcdonalds-nlrb-franchise-ruling/