McDonald’s Corporation (MCD) On The Spot Over Workers’ Rights


mcdonalds

The fight for better pay has put McDonald’s Corporation (NYSE:MCD) on the spot, and this time things appear to have moved a notch higher. Widespread complaints touching on the rights of workers have been leveled against the company by the National Labor Relations Board (NLRB). Some of the violations that McDonald’s is accused of committing include firing and intimidating the workers pressing for a higher pay through unions, according to a Reuters report.

Joint employer

In the past, companies that operated through franchises enjoyed sort of immunity from liabilities that touched on labor issues at their franchises. However, the complaints against McDonald’s Corporation (NYSE:MCD) by the NLRB now define the company as a “joint employer.” That means that it is also liable for the violations committed by its franchise partners.

Administrative law judges will begin considering the complaints starting March 2015. However, McDonald’s still has an opportunity to appeal the decision. The company has already promised to fight against the labor violation claims leveled against it.

Pursuing a labor course that defines McDonald’s Corporation (NYSE:MCD) as a joint employer alongside its franchises is expected to be a long process. Beyond that, the process could also rewrite the rules that previously governed the relations parent companies and franchise partners.

Control over franchises

It seems McDonald’s Corporation (NYSE:MCD) has found itself in a fix in the labor violation claims because of the amount of control that it exerts over its franchises. Such controls include deciding how food is prepared by the franchises and how such food is served. However, trade groups are worried about defining McDonald’s as a joint employer in the case of its franchises. They say that such a move as the risk of raising confusion in the enforcement of employment agreements.

McDonald’s Corporation (NYSE:MCD) employees are among those pressing for hourly rates of at least $15. The Fight for $15 is a movement that has spread to at least 100 cities and across multiple industries, which include retail, hospitality, home care, and airport services.

It remains to be seen how the labor complaints issues against McDonald’s Corporation (NYSE:MCD) progress. However, the labor issues are likely to hurt the company’s profits if the workers get away with their demand for higher wages.

Neha Gupta

Neha Gupta has been in the financial space for over six years now. Gupta earned her MBA degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) course. She has successfully completed Level II of her CFA. She is a veteran in article writing, which is depicted in her numerous pieces published on SeekingAlpha, Nextiphonenews, InsiderMonkey, MarketWatch, and Techinsider. Her crisp and eloquent writing finds its best place in Researchcows, where emphasis is given on developing rich content for various websites, products, business plans, trainings, and book writing.

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