In the court of public opinion, McDonald’s may seem to be on thin ice. Reports of sales declines, profit swings, and lawsuits may not give the franchise a “golden” glow. However, legal proceedings are often less quick to judge.
In late January, ten former restaurant workers sued McDonald’s along with one of its franchisees for alleged wrongful termination. They claim racial discrimination and harassment.
This new lawsuit will more than likely test the ramifications of recent National Labor Relations Board (NLRB) rulings. Over the summer, the NLRB determined that McDonald’s could be treated as a joint employer with its franchisees in a series of worker complaints over employment conditions. It is a departure from the conventional understanding of the franchise model. When the general counsel’s reasoning challenges that understanding, it often gives way to other lawsuits. However, the court is not bound by the NLRB’s decision.
Right now, McDonald’s is named as a defendant in the civil lawsuit, but this court may find no fault on behalf of the franchisor, and may proceed with the former employees suing the franchisee alone. Of course, the court may find both the franchisor and franchisee are liable.
It may never be known for sure whether the NLRB decision had any bearing on any future lawsuits. It’s still not known whether the NLRB decision will change the franchise model in general. What is clear, however, is that the franchise pot is being stirred and only time will tell what’s to come.