On December 12, 2019, McDonald’s Corporation (McDonald’s), the leading global fast-food chain, won a lawsuit filed by 20 former employees who accused the company of violating labor laws. The National Labor Relations Board (NLRB), the US main federal labor law enforcement agency, ruled in the favor of McDonald’s and instructed a federal judge to approve the settlement proposed by the company.
The Status of ‘Joint Employer’ Saves McDonald’s
Labor violation charge against McDonald’s, was considered as one of the most crucial labor disputes in US history, started in 2014 by the NLRB. The charges against the company were related to the difficulties faced by the employees included poor work conditions, office design, wages, and sexual harassment.
The NLRB stated that McDonald’s was not responsible for labor law violation, as the company only performed as a ‘joint employer’ with its franchisees. It meant that the company was not liable for its franchisees’ wrongdoing against the employees.
According to a media report, “Trump’s appointees had helped to override an agency judge and rebuffed ethical concerns raised by labor advocates to approve a group of settlements in the matter on a 3-1 decision.”
Welcoming the NLRB judgment, the senior Vice-President of the International Franchise Association (IFA), Matt Haller expressed, “After five years of litigation, five years of unnecessary legal costs, and five years of uncertainty in the franchise sector, IFA is thrilled the NLRB came to this common-sense conclusion.”
Responses on the Settlement against the Charge
The charge was a reminder to the food chain about the prevailing employees’ labor violations in the company’s franchisees. As an observer reported, “It was an awakening call to improve working conditions at its 14,000 domestic restaurants and put more responsibility on franchisees to address the concerns of their workers.”
McDonald’s announced that it agreed to pay the settlement of $ 250,000 as set by the labor panel to the employees who were victims of mistreatment and misconduct by its franchisees. The NLRB explained that the settlement was reasonable and instructed an administrative law judge, Lauren Esposito, to accept it.
A spokeswoman of McDonald’s claimed, “The settlement would allow the company’s franchisees and their employees to move forward. Employees involved in the proceedings can now receive long-overdue satisfaction of their claims.” However, several groups working for the victim’s behalf are opposing the settlement and claimed as “not valid”.
The Decline of Company’s Growth Since 2015
A McDonald’s franchise restaurant in Chicago was sued in November 2019 by a group of workers, as the interior designing including opening counters and kitchen areas of the office made women employees uncomfortable.
Moreover, an allegation of sexual harassment at the workplace involved in one of the company’s Michigan restaurants in the same month put huge pressure on the McDonald’s management team.
The company is now facing a decline in investments due to these issues. According to the IFA, “The litigation had brought a decline of 93% investment to the franchise businesses since 2015.”
Hello, I’m Anna Yeo. If you like my news coverage, please drop a good word in my inbox. I’m journalist by profession and have been part of many major reporting across the globe. I like to write crisp and factual news. I have completed my masters degree in journalism. Feel free to contact me at [email protected]