Industry News | January 22, 2015 | QSR Exclusive Brief

Lawsuit Against McDonald’s Tests New Franchising Law

McDonald’s Corp. employees in Virginia are filing a civil rights lawsuit against the company, alleging racial discrimination, sexual harassment, and wrongful termination.
The suit comes after the U.S. National Labor Relations Board (NLRB) decided last month that corporations can be held responsible for the actions of their franchisees.
Filed by a group comprised of one Hispanic and nine African-American workers, the lawsuit claims that supervisors at three franchised units run by Michael Simon of Soweva Co. subjected the employees to “inappropriate touching” and racial slurs. The employees said they complained to the corporate office about their supervisors’ behavior, but no action was taken.
McDonald’s Corp. released a statement to Reuters claiming the company had not yet seen the lawsuit, “but will review the matter carefully.” It also cited “a long-standing history of embracing the diversity of employees” and said discrimination is “completely inconsistent” with McDonald’s values.
The suit is drawing the attention and support from civil rights groups like the NAACP and the Fight for 15, a union-backed group that advocates for a $15 hourly minimum wage. It’s also catching the attention of the restaurant industry, where the results could have a dramatic effect on future franchising practices.
Late last year, the NLRB general counsel’s office backed the decision that McDonald’s has sufficient control over franchisees’ operations to make it a joint employer. But organizations like the International Franchise Association believe joint-employer status could threaten the franchisor-franchisee relationship and discourage franchise growth.
By Emily Byrd


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