July 29 McDonald's Corp, not just its franchisees, can be held liable in complaints that the company violated employee rights, an official at the U.S. National Labor Relations Board said in a letter made public on Tuesday.
NLRB general counsel Richard Griffin Jr. wrote in the letter that of the 181 complaints filed against the fast-food chain since November 2012 in connection with employee protests, 43 had merit. McDonald's will be named as a joint respondent in those cases if they are not settled, Griffin wrote.
Christine Owens, the executive director of the National Employment Law Project, an advocacy group for low-wage workers, said the McDonald's must be held accountable for its franchisees.
The NLRB decision means corporations "cannot feign ignorance or disclaim responsibility for franchisees' illegal acts, especially when those acts flow from the business model the lead company imposes," she said
In a statement, McDonald's senior vice president of human resources, Heather Smedstad, said the NLRB decision was wrong and the company would contest it. McDonald's relationship with its franchisees does not establish a joint employer relationship, Smedstad said.
The NLRB decision "changes the rules for thousands of small businesses, and goes against decades of established law regarding the franchise model in the United States," Smedstad said.
McDonald's, the world's biggest restaurant operator by revenue, has been at the center a national debate on pay inequality at a time when many middle- to low-income Americans are struggling to make ends meet.
According to the NLRB letter, 68 complaints against McDonald's had no merit, and 64 are still under investigation. (Reporting by Dan Levine in San Francisco; Editing by Steve Orlofsky)