McDonald's Wins Backing of Labor Board -- 2nd Update
December 12 2019 - 5:18PM
Dow Jones News
By Heather Haddon
The National Labor Relations Board instructed a federal judge to
approve a settlement in a case pertaining to McDonald's Corp.'s
status as a joint employer, helping shield the company from
liability from the employment practices of its hundreds of U.S.
franchisees.
The decision is a victory for the world's largest fast-food
chain as it faces calls to improve working conditions at its 14,000
domestic restaurants. If finalized, the determination would put
more responsibility on franchisees for McDonald's and other
companies to address the concerns of their workers.
In a 3-1 ruling, a panel of the labor body on Thursday accepted
a settlement to resolve dozens of cases brought against McDonald's
starting in 2012 over employment violations. The proposed
settlement would give 20 affected employees back pay from
franchisees, valued at $171,636. McDonald's agreed pay into a
settlement fund if restaurant owners declined to pay restitution
themselves, an amount the panel set at $250,000.
Workers in nearly 300 cases said they were punished after
campaigning for a $15 hourly wage and union representation at
McDonald's restaurants. The complaints alleged that some of the
workers lost shifts or were fired.
The board found that the settlement was reasonable and
instructed an administrative law judge, Lauren Esposito, to accept
it.
A McDonald's spokeswoman said that 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," she said.
Groups that brought the cases on behalf of the workers said they
would appeal the decision. "The settlement is not valid," a
campaign spokeswoman said.
The decision comes as the labor board and U.S. Department of
Labor work to update the definition of joint-employer rules. The
changes are expected to create a more stringent test of whether
businesses from gyms to hotels have direct oversight over employees
at franchises in disputes over matters such as federal wage
requirements.
Business associations have criticized Obama-era joint-employer
determinations for placing undue responsibility on businesses for
decisions made by operators that license their brands.
They say that has stifled investments by businesses like
McDonald's that franchise their restaurants and stores. Litigation
brought against franchise businesses have increased by 93% since
2015, according to the International Franchise Association.
"This decision can bring much-needed clarity to franchise
businesses of all sizes," a spokesman for the association said.
McDonald's is facing more pressure from workers to improve
conditions at its restaurants.
A group of workers at McDonald's restaurants around Chicago sued
the company last month, claiming that changes to store design such
as opening counters and kitchen areas made them more vulnerable to
assault.
Earlier in the November, workers represented by the American
Civil Liberties Union and Time's Up Legal Defense Fund filed suits
claiming that McDonald's hadn't properly handled allegations of
sexual harassment at one Michigan restaurant.
Write to Heather Haddon at heather.haddon@wsj.com
(END) Dow Jones Newswires
December 12, 2019 17:03 ET (22:03 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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