Arguments Blog
Friday, Aug 1, 2014, 8:42 AM

Friday Round-up: Golden Arches Edition

Nathan Pippenger

This week, the National Labor Relations Board handed organized labor its first major victory in years. When it comes to labor complaints, the Board’s general counsel ruled, McDonald’s can be treated as a joint employer along with its franchisees. If upheld, that ruling would change a longstanding arrangement by which McDonald’s is not liable for labor and wage violations at its individual franchise locations—meaning, as the Wall Street Journal explains, that the company could become “more vulnerable to campaigns by labor groups for higher wages and improved conditions for restaurant and retail workers.”

The ruling could have massive implications for low-wage laborers. As Alec MacGillis argues, companies like McDonald’s have long been able to “hide behind the veil of the franchise model, disavowing responsibility for what happened inside restaurants.” Thus, when individual franchise owners discourage union organizing, the corporation is shielded from worker complaints. Even rulings in favor of organizers, then, have limited effect on the central corporation. But this could all soon change, meaning, MacGillis writes, that “unions may no longer have to go about the near-impossible task of organizing restaurants outlets one-by-one.”

Recent conflicts over fast-food organizing demonstrate the uphill battle that has long faced low-wage workers. Recently, a group of McDonald’s employees made headlines by including the parent corporation in a complaint alleging that they were fired for trying to unionize. As Imhotep Royster notes, “the workers also alleged that they were suspended, had their hours cut, and were threatened on account of their union involvement.” Labor advocates argue that in practice, such punitive measures, and the broader anti-union message they send, aren’t isolated to a few out-of-line franchises. Instead, McDonald’s uses the franchise arrangement to avoid responsibility for consequences that workers know are likely to occur wherever they attempt to form a union. When other workers see nine colleagues dismissed, Royster points out, “this action serves to deter any union-friendly impulses within the remainder of the McDonald’s staff.”

For Alison Griswold, this is a long-overdue change, indicating, as the headline of her analysis puts it, that “our labor laws are woefully out of date.” The experts Griswold interviewed point out that the 1935 National Labor Relations Act did not foresee the rise of franchisee operations. But today, as Griswold notes, the model has created a division of labor highly favorable to parent corporations: McDonald’s “has ample power to control the parts of the business it cares about at franchises, while offloading liability for labor and wage violations onto its franchisees.” Soon, it may start to share in that liability—for once, a big break for low-wage workers and organized labor.

 

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