McDonald’s Lawsuit Could Change Fast Food Corporate Responsibility

Ten former employees of a McDonald’s franchise filed a lawsuit against the corporation. The suit alleges racial discrimination that lead to wrongful termination. They filed the suit Thursday, January 22nd in Virginia.

The employees worked at three McDonald’s restaurants, all owned by the restaurant franchiser, Soweva. Michael Simon owns the franchise company. The employee’s allege that once Soweva took control of the franchise, it “implemented a plan to reduce the number of African-American employees and hire more white employees”. The group held a job fair last March where they hired all new white employees. They fired Latino and African-American workers, stating they “didn’t fit the profile” for the restaurants.

Female employees were also subjected to sexual harassment from the supervisors of the franchise. They allege that supervisors touched them inappropriately, sent explicit photos, and talked in a highly sexual manner.

The racially motivated termination caused loss of wages and benefits, emotional distress, humiliation, loss of reputation, and other damages. The employees are suing for lost wages in addition to several other damages.

Why is the group of employees also suing McDonald’s and not just the individual franchise? Aren’t they separate entities? In this case, McDonald’s is considered a “corporate parent” of the franchise. It is responsible for any abuse or unfair treatment that occurs in a restaurant. The corporation has “detailed instructions for franchisees in areas including operations procedures, bookkeeping and accounting procedures, business practices and policies, personnel management, and any other area McDonald’s Corporate wishes to control” for each franchise.

90% of McDonald’s 14,000 restaurants in the U.S. are owned and operated by independent franchises. But, McDonald’s has 100% control over the procedures and policies that take place in each restaurant.

This lawsuit comes only one month after a lawsuit was filed against McDonald’s by the NLRB. The suit states McDonald’s is a “joint employer” with its franchises, and is responsible for any misconduct. The misconduct in the suit is the retaliation of employees who participated in union organizing. McDonald’s insists they are separate from the franchises, and are not responsible for the violations that take place under the control of them.

But, the McDonald’s corporation has enough control over its franchises to implement policies to stop the racial or sexual harassment. All 10 employees called and complained to the McDonald’s Corporation, but received no help.

This lawsuit may be the catalyst for the fast-food corporation and franchise relationship. In the past, franchises have been considered as independent from the umbrella corporation. Recently, union supported demonstrations have demanded for an increase in pay for fast food employees to $15 an hour. Since McDonald’s is “independent” from franchises, they are not forced to increase pay or bargain with workers. But with the recent lawsuit, fast-food corporations are starting to wonder just how independent they are.