Ten current and former McDonald's workers filed suit in a Virginia district court on Thursday, alleging racial discrimination and sexual harassment at McDonald's locations in two Virginia cities.
In one store, for example, one supervisor allegedly would say it was "too dark in the store" at times when most workers were African-American. And the suit goes on to list some almost unfathomably degrading behavior on the part of supervisors:
Plaintiffs were subjected to rampant racial and sexual harassment, committed by the restaurants' highest-ranking supervisors. Together, these supervisors demeaned African American workers; often complained that "there are too many black people in the store;" called African-American workers "bitch," "ghetto," and "ratchet;" called Hispanic workers "dirty Mexican;" disciplined African-American employees for rule infractions that were forgiven when committed by white employees; inappropriately touched female employees on their legs and buttocks; sent female employees sexual pictures; and solicited sexual relations from female employees.
The allegations in the lawsuit are of course shocking on a basic level. But this suit is also important in a much subtler way, in that it's filed against both Soweva — the franchisee operating these stores — and the McDonald's corporation itself. Far more than being a simply discrimination and harassment suit, this case is another example of a question that has repeatedly been raised in labor law in the last year — when is an big chain a "joint employer" of people who work for one of its franchises?
In other words, can McDonald's and other corporations be held legally accountable for the working conditions endured by front-line employees who wear their uniforms but are technically employees of independently owned franchises? This seemingly pedantic question actually has broad implications for many franchise-heavy industries (fast food, hotels, gyms) and how they relate to their workers — how they schedule employees and negotiate with unions, for example.
A bigger, nationwide debate
The franchising debate has heated up with a few high-profile cases. In California, for example, the supreme court last year ultimately ruled in favor of Domino's Pizza, saying it was not a joint employer along with its franchise operators. A yet-to-be-decided case before the National Labor Relations Board questions whether a waste management company is an employer along with its subcontractors. And in December, the NLRB decided to authorize complaints against both franchise operators and the McDonald's parent company, alleging retaliation against employees who participated in protests demanding $15-per-hour wages. Even though that was a preliminary decision, it was considered a big win for labor-rights advocates.
These sorts of cases could strike at the heart of the franchisor-franchisee relationship, in which the franchisee runs the business according to certain specifications set by the parent company but operates independently in many other ways, like in how it treats its employees. That often means a franchisee acts as a sort of buffer between workers and the parent corporation.
But the question of joint employership is being reconsidered lately. The NLRB, for example, appears willing to reconsider that definition, which currently says an employer must have "direct and immediate impact" on the terms and conditions of workers' employment — for example, having a say in hiring and firing, as well as wage-setting.
In this case, plaintiffs are saying that McDonald's is partially liable because it had so much control over its stores. The lawsuit references McDonald's' detailed training manuals, control over menus, and routine visits from McDonald's mystery shoppers as examples of the parent company's control over stores. And in a call with reporters, plaintiff Katrina Stanfield said she complained to McDonald's about the harassment and discrimination and that they did nothing in response.
The repercussions of a new definition could be huge
According to one attorney, when the definition is murky, it makes operating those businesses difficult.
"If you don't know who the employer is, you can't allocate liability, and you really don't know how to run your business," says Michael Lotito, co-chair of the Workplace Policy Institute at law firm Littler Mendelson.
And if pending cases do indeed find parent companies to be liable for their franchisees' wrongdoings, it could have repercussions far beyond McDonald's. And the broader question of what, exactly, is an "employer" could even affect the relationships between, for example, retailers and suppliers, as well as employers and staffing agencies. Of course, neither the NLRB nor Virginia's District Court has the last word. Settling this question could be a years-long process, says Lotito, and decisions could differ from jurisdiction to jurisdiction. And given that groups like SEIU and Fast Food Forward are fighting hard on this question, expect to hear more about the joint employer issue in the years to come.