McDonald’s Corporation (MCD) Can Face Liability for Its Franchisees: NLRB

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The United States National Labor Relations Board (NLRB) has told McDonald’s Corporation (NYSE:MCD) that it can face liability for its franchises in certain complaints of workers’ rights as McDonald’s Corporation (NYSE:MCD) can be held as ‘joint employer’ for those employees. McDonald’s Corporation (NYSE:MCD) in the past has remained out of trouble from labor laws by citing that it’s the franchisee, and not its corporation, determines wages and working, but all that is set to change now.

McDonald's Corporation

Paul Millus, labor and employment law Attorney, discussed the repercussions that McDonald’s Corporation (NYSE:MCD) could face due to the statement by NLRB on Fox Business.

“There are two things going on there. First, this is just a preliminary decision as to whether the complaints go forward, but you are absolutely right in terms of the ultimate outcomes. Both sides are all in on this. The unions want the determination to be that McDonald’s Corporation (NYSE:MCD) is the joint employer. McDonald’s Corporation (NYSE:MCD) certainly does not and it could impact franchise to franchise, depending on the element of control that the franchise has in the business,” Millus said.

Millus believes that the proceedings would proceed faster than assumed and that there won’t be a settlement because the unions want the finding to be in their favor while McDonald’s Corporation (NYSE:MCD) doesn’t. Millus also thinks that the upcoming elections in the U.S. Senate can have a significant impact on this case. He warned that this decision in this case won’t only impact McDonald’s Corporation (NYSE:MCD), but a lot of the other franchisee-model businesses.

“They [the unions]are trying to expand their membership, that’s what they do […] From the standpoint of a legal issues, it’s determining whether the control exercised by McDonald’s Corporation (NYSE:MCD) was such that it interfered with hiring, wages, benefits […] In this case it appears that McDonald’s Corporation (NYSE:MCD) went up a little bit above and beyond and the more control the franchise owner exercises the more risk he faces of finding a joint employer,” Millus added.

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