McDonald’s Corporation (MCD)’s Might Face Liabilities for Its Franchisees

The ruling by the National Labor Relations Board (NLRB) that stated that McDonald’s Corporation (NYSE:MCD) should be treated as a joint employer, together with its franchised restaurants, continues to elicit debate in the food industry. The Ruling essentially mounts more troubles and responsibility on the fast food chain, which will now be held responsible for any labor or wage violations by the franchisees.

McDonald's Corporation (NYSE:MCD)

The National employment project has been a staunch supporter of workers’ grievances, especially on the franchise level, reiterating they should always be protected and addressed by the mother company.

“The National employment law project, which has backed nationwide protests by McDonald’s Corporation (NYSE:MCD) workers, says the ruling finally recognizes the control McDonald’s Corporate has over its franchises, and the group says with real control, comes real responsibility and accountability […],” said Scott Cohn on CNBC.

The ruling comes amidst increased complaints by McDonald’s Corporation (NYSE:MCD)’s workers who have accused it and its franchises of unfair labor practices on allegations of illegal dismissals as well as dismissal when engaging in any form of pro-labor activities. The NRLB council has been reviewing the number of complaints raised by the workers, a move that might see McDonalds facing more liabilities.

“[…] That seems to be  what the NRLB general council office has in mind it has been reviewing dozens of complaints against franchisees and Corporate, surrounding those protests and the cases that go forward McDonald’s Corporate could now face liability,” said Mr. Cohn.

McDonald’s Corporation (NYSE:MCD) says it will fight as “[…] this decision changes the rules for thousands of small businesses, and goes against decades of established law regarding the franchise model in the United States […].” The National Restaurant Association has already shown its support for McDonald’s stating through its vice president, Angelo Amador, that the ruling will only put a hurdle on restaurants creating more jobs.

The association of restaurants maintains that at the current trend, it is going to be extremely expensive to become a franchise. McDonald’s Corporation (NYSE:MCD) has already stated that it does determine decisions on hiring or wages at its franchised restaurants.

Disclosure: none

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