McDonald's squares off against U.S. labor board in trial

Thu Mar 10, 2016 7:02pm EST
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By Karen Freifeld

NEW YORK (Reuters) - A highly anticipated trial over whether McDonald's could be on the hook for its franchisees' alleged retaliation against employees who participated in fast-food worker protests across the United States began on Thursday.

At issue is whether McDonald's USA, a unit of Illinois-based McDonald's Corp (MCD.N: Quote), is a "joint employer" of workers at its independently owned franchises, as the National Labor Relations Board says. That would make the company liable for labor law violations by the franchisees, which operate 90 percent of McDonald's U.S. restaurants.

The trial before an administrative NLRB judge in New York has attracted national attention because it is expected to show how the board's new standard for joint employment applies to the franchisor-franchisee relationship, although the ruling in the case will apply to McDonald's only. Critics have cast the new standard as an existential threat to the franchise model.

In his opening statement, NLRB lawyer Jamie Rucker described the level of control McDonald’s has over its franchisees, setting everything from cleaning requirements and the number of seconds for order-taking to pre-packaged interview questions for prospective hires.

"If McDonald's is involved in determining working conditions at its franchised operations, it is responsible for what happens to workers subject to those conditions," Rucker said.

Workers began filing complaints with the Washington-based NLRB in 2012, saying that McDonald's and some franchisees threatened, surveilled, disciplined and fired them for protesting for higher wages and union rights in the demonstrations.

The NLRB’s general counsel issued complaints in 2014, eventually consolidating a case for trial against the company and franchisees in six cities.

McDonald's lawyer Willis Goldsmith said Thursday that the company "is not now and never has been" a joint employer and that its franchises are independent.   Continued...

Protesters participate in a 'die in in front of a McDonald's restaurant during demonstrations asking for higher wages in New York, in this file photo taken April 15, 2015. REUTERS/Lucas Jackson/Files