McDonald's USA franchising system (MCD) will be under scrutiny in a New York City trial set on Thursday next week. Judge Lauren Esposito will determine if the giant fast food chain is a joint employer of the tens of thousands of unfairly treated workers who serve in local McDonald's outlets.
This case is currently being heard before the National Labor Relations Board under an administrative law judge. If the determination is made to the effect that the giant food chain is indeed a co-employer of its franchises, it would be accountable for the alleged violation of certain labor laws perpetrated by some of its local outlets.
As far as the MCD franchise employees are concerned, their employers are the franchise operators. But the NLRB seeks to amend this arrangement by considering the parent company - McDonald's USA, as the franchise's joint employer.
That would mean if a franchise employee charges his employer of unfair labor practices, the joint employer of the franchise will also be held responsible.
This could be detrimental to McDonald's USA since local franchise employees have accused their employers of forcing them to work over long hours apart from withholding their salaries.
Should Esposito rules in favor of the NLRB, all U.S. franchises of fast food chains, not just those of McDonald's, will be affected. In other words, the franchise system of America will be in turmoil.
It could also force McDonald's to raise wages and to accept additional responsibilities for the improvement of its franchises' working conditions. Workers' unions and labor groups will also be emboldened to press for changes in restaurant health care. Other commercial establishments where franchising is a common business practice will also feel the pressure.
"The NLRB is applying a new legal standard that would undermine a successful American business model that has enabled thousands of families to operate their own small businesses and help support millions of American jobs," stated McDonald's Corp. in a company email.
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