A huge win for contractors and franchise workers
Today I’m celebrating some good news for working-class people in this country. Namely, the definition of “employee” is changing, making it easier for employees at McDonalds and other places to complain about poor treatment. The good news comes via a National Labor Relations Board ruling yesterday.
I wrote previously about the economics of McDonalds franchises, but it comes down to this: 90% of the low-level employees at McDonalds don’t technically work for McDonalds at all; instead, they work for a local franchise owner, who in turn rents stuff, including the McDonalds brand, from the parent corporation.
In spite of the technical and legal framework, the parent corporation controlled the burger flippers at a minute level, through surveillance, customer service policy, branding requirements, and most importantly through controlling the margins of the franchise owner.
The legal separation, which was solidly working until yesterday, meant that employees couldn’t complain about bad treatment of their employer, McDonalds, but rather had to complain only about the way the local franchise owner treated them. This prevented large-scale unionization attempts among other things. The new ruling means that the workers will have the right to negotiate with McDonalds corporation as a “joint employer.” Another way of saying this is that McDonalds will have much more liability when it concerns mistreatment of franchise workers.
An example of how this is good news is the following: it used to be true that if one McDonalds unionized, and demanded and received better wages, it would have little knock-on effects and indeed it would be quite difficult to pull off, given how tight the margins are for franchisees. Now, with the new ruling, a second McDonalds location could possibly use that one example as leverage in a bargaining agreement. Moreover, as a joint employer, McDonalds corp cannot shut down a franchise just for unionizing.
The ruling extends well beyond McDonalds. In fact the original case was a company that hired contractors to do its recycling. It will likely mean that it will in general be much harder for corporations to create legal distance between itself and the people hired to do work for that company, so contractors of all varieties, as long as the parent company has a substantial amount of control over the workers.