McDon­ald's squares off against US la­bor board in trial

The Pak Banker - - COMPANIES/BOSS -

NEW YORK: 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 Illi­nois­based McDon­ald's Corp (MCD.N), 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 Wash­ing­ton­based 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.

The com­pany does not con­trol who the fran­chisees hire or their work­ers' wages, ben­e­fits or sched­ule, Gold­smith said.

At­tor­ney Robert Brody, who rep­re­sents New York City fran­chisees in the case, backed McDon­ald's. McDon­ald's may pro­vide the "cook­book," but fran­chisees make their own de­ci­sions on em­ploy­ment is­sues, he said.

The NLRB ex­panded its joint em­ploy­ment stan­dard in Au­gust in a land­mark de­ci­sion in­volv­ing Brown­ing-Fer­ris In­dus­tries Inc. Un­der the old stan­dard, a com­pany had to have di­rect con­trol over em­ploy­ment con­di­tions to be a joint em­ployer, but the new test con­sid­ers in­di­rect and un­ex­er­cised con­trol. A joint em­ploy­ment find­ing could make it eas­ier for work­ers to fight for bet­ter wages and con­di­tions since they would be ne­go­ti­at­ing di­rectly with par­ent com­pa­nies.

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