The NLRB’s General Counsel Richard F. Griffin Jr. found merit in 43 of 181 unfair labor practice complaints made against McDonald’s in the last 20 months and said last Tuesday that McDonald’s could be held jointly liable for these alleged labor and wage violations by its franchisees, most of which are not owned or operated by McDonald’s Corp.
Heather Smedstad, Senior Vice President of Human Resources for McDonald’s USA, issued a strong statement of protest: “This is such a radical departure that it should be a concern to business men and women across the country.”
David French, the Senior Vice President for Government Relations of the National Retail Federation, has chimed in, saying, “The last thing this economy needs is decisions like this which merely serve to stall job growth diminish much-needed capital investment.”
This controversial ruling has provoked cries of alarm and protest from the business community because franchisees of fast food corporations like McDonald’s have little connection to the corporate body beyond the shared name. They are independently owned and managed by local men and women.
But the Associated Press reports that one of the three lawsuits filed in different states on behalf of McDonald’s employees detailed the use of corporate software which determined labor costs based on the percentage of sales at restaurants. Allegedly, once the ratio climbed to a certain point, workers are not allowed to clock in for a certain period of time.
If this is true, it represents a problem that should be solved even if the software system is isolated to just a few of the thousands of McDonald’s franchisees.
But is destroying the entire franchisee model the right solution to that problem? Let’s keep in mind that these franchisees encourage local entrepreneurship and empower minimally skilled men and women to gain managerial experience. Franchisees open the door to those who aren’t readily qualified to gain positions in a corporation. They are technically small businesses.
So why is the NLRB suddenly changing the game in such a counterproductive way? Well, given the track record of Obama’s NLRB (handing out favors to their union buddies at the expense of everyone else) and given the fact that this move to reclassify franchisees would greatly aid unions’ efforts to organize McDonald’s, it’s safe to assume the NLRB is once again running roughshod over American workers to hand out union favors.
Angelo Amador, Vice President of Labor and Workforce Policy for the National Restaurant Association, deserves a lot of credit for calling the NLRB out for the disgrace it has become: “NLRB has lost all credibility as a government agency established to protect workers and is now just a government agency that serves as an adjunct for organized labor.”
The restaurant association added that the ruling would probably lead to industry consolidation. “The net effect is counterproductive and will indeed create ‘big business.’”
The NLRB should protect the franchisee system instead of defining a McDonald’s franchisee as a joint employer of McDonald’s Corporation thus taking employment opportunities and economic growth away from communities across the country.