McDonald's loses on labor ruling that may allow easy unionization of employees

[Oldgamer]

Oh look at that in this picture above! It's an adult over the age of 20! My my..:biggrin:

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The burger chain has long pinned labor liabilities on its franchisees, but a National Labor Relations Board ruling weakens that defense.

The general counsel of the National Labor Relations Board on Tuesday ruled that McDonald’s MCD qualifies as a joint employer of workers at its franchise restaurant locations, a decision that—if upheld—could hold the company responsible for employee conditions and ease the fast food industry’s path toward unionization.

McDonald’s disputed the decision and said that it plans to contest it. Its senior vice president of human resources Heather Smedstad said in a statement that the ruling “changes the rules for thousands of small businesses, and goes against decades of established law regarding the franchise model in the United States.” About 90% of McDonald’s 14,000 restaurants in the United States are owned by franchisees.

The ruling came in response to 181 unfair labor practice complaints filed in New York by the Fast Food Workers Committee (which is funded by Service Employees International Union), which accused McDonald’s of retaliating against workers who took part in organized activity. Finding that 43 of those complaints had merit, NLRB General Counsel Richard Griffin said that he would include McDonald’s as a joint employer in those cases going forward.

The ruling could spell potential upheaval for the fast food industry, which for decades has largely operated under the franchise structure, a scenario in which franchise owners are responsible for a restaurant’s day-to-day operations, pay royalties to a corporate overseer and follow the management guidelines that the mother corporation hands down. The retail industry employs the franchise system too and Tuesday’s decision prompted outrage from its largest industry group. “The last thing this economy needs is decisions like this which merely serve to stall job growth and diminish much needed capital investment,” the National Retail Federation said in a statement.

McDonald’s said on Tuesday that it relies on the franchising model to “run successful businesses as part of a system that every day creates significant employment, entrepreneurial and economic opportunities across the country.”

But ever since fast food workers started pressing for a $15 per hour wage two years ago, McDonald’s and other chains have also used the system to skirt responsibility amid outrage over low worker pay, claiming that they don’t set worker wages; franchise owners do. In its statement on the minimum wage, for instance, McDonald’s says that it bases its worker compensation on local markets and employees’ job levels. But it also relies on this point: “It’s important to know approximately 80% of our global restaurants are independently owned and operated by small business owners, who are independent employers that comply with local and federal laws.”

Tuesday’s directive weakens that defense and gives credence to labor organizers who have long argued that McDonald’s should be considered an employer because it controls so much of the operations at its franchise locations and leaves the franchise owners little freedom to make changes, including raising wages.

The decision could have a big impact on fast food worker wages. If the decision is upheld, it means McDonald’s can be found liable for violating fair labor practices that had previously been reserved for franchisees, according to Catherine Ruckelshaus, general counsel of the National Employment Law Project, who spoke on a press call organized by the Fast Food Forward campaign.

“McDonald’s can try to hide behind its franchisees, but today’s determination by the NLRB shows there’s no two ways about it: The Golden Arches is an employer, plain and simple,” said Micah Wissinger, an attorney who brought the case on behalf of McDonald’s workers in New York City, said in a statement.

In addition to better pay, the fast food worker movement is also seeking the right to organize, and Tuesday’s ruling could potentially give a boost to that effort as well, says Kate Bronfenbrenner, director of labor education research at the Cornell University School of Industrial and Labor Relations. “McDonald’s was saying it wasn’t an employer; it can’t say that anymore,” she says. “It’s no longer a debate.”

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McD's can now be held liable for labor and wage violations...

 

[Jimzz]

McDonalds was its own worse enemy here. McDonalds wants a lot of control over what a franchise can do yet if anything goes wrong they want a scape goat. This ruling basically said you can't use them as a scape goat when you weld so much power over operations.

Seems pretty common sense ruling.

 

[Londo_Jowo]

I can see it now, McD workers unionize and get their pay increased to $10/hr. Then the union takes their dues of $2/hr so the workers are still effectively making the $8/hr they're currently making.

 

[nehalem256]

Good thing Obama is planning to let in a bunch of new illegal immigrants!

Thanks Obama!

 

[Jimzz]

I can see it now, McD workers unionize and get their pay increased to $10/hr. Then the union takes their dues of $2/hr so the workers are still effectively making the $8/hr they're currently making.

Show me a union that takes 20% of peoples pay? I have never seen or heard that?

 

[networkman]

The "ruling" from the National Labor Relations Board doesn't mean squat! The Board didn't have the quorum necessary to make any binding judgements; President Obama appointed sufficient members to fill the quorum during what he defined as a "recess" and was subsequently over-ruled by the Supreme Court, the court finding said appointments illegal and all decisions arrived at by the Board as null and void, meaning each must be re-visited and re-decided once the Board positions are properly filled.

Next topic.

 

[Londo_Jowo]

I don't know how much unions take in dues but I do know it's enough that the union mechanics that work for the company on the west coast feel they need to get a pay raise so they will make as much as the non union mechanics. All mechanics have the same wage scale.


Before anyone starts crying that the non union guys owe unions for negotiating higher wages. The non union workers were first and union mechanics added later when certain states required that local mechanics be hired/used on job within the respective states.

 

[Newell Steamer]

OH MAH GAWD!

America is dead. We all know restaurants and fast food places can NOT be successful if they pay their employees wel,... http://kut.org/post/why-n-out-burger-pays-more-other-fast-food-joints

:-/

 

[Brainonska511]

I don't know how much unions take in dues but I do know it's enough that the union mechanics that work for the company on the west coast feel they need to get a pay raise so they will make as much as the non union mechanics. All mechanics have the same wage scale.


Before anyone starts crying that the non union guys owe unions for negotiating higher wages. The non union workers were first and union mechanics added later when certain states required that local mechanics be hired/used on job within the respective states.

When I was in HS, I was a cashier at a local grocery store. I was also a member of the Local 338 UFCW union (benefits included a small raise for joining plus 1.5 pay on Sundays and a small bonus for working on holidays (in addition to the standard 1.5 pay for holidays)). Union dues were about $6/week. The Sunday boost would more than cover the dues. There is no way a McD's union could get away with $2/hr dues.

 

[glenn1]

Fine by me. McDonald's will further automate whatever functions it can (e.g. having drive-in orders handled by central call centers, terminals to order food rather than cashiers) and some low value-add employees will lose jobs. Other employees with better skills or in jobs not suitable for automation will be better off. If progressives want to force the issue of having less but higher-paying jobs for the working poor then have at it. I don't really even care if McD's has to close a lot of locations, it's crap food anyway.

 

[1prophet]

McDonalds was its own worse enemy here. McDonalds wants a lot of control over what a franchise can do yet if anything goes wrong they want a scape goat. This ruling basically said you can't use them as a scape goat when you weld so much power over operations.

Seems pretty common sense ruling.

Auto manufacturers have been doing that for decades, telling their respective franchises how to look and run things, while the franchise bears the day to day operational and financial burdens,

this ruling is probably going to be appealed by more than just Mcdonalds.

 

[Brainonska511]

Auto manufacturers have been doing that for decades, telling their respective franchises how to look and run things, while the franchise bears the day to day operational and financial burdens,

this ruling is probably going to be appealed by more than just Mcdonalds.

Franchise agreements, as they stand, are great for the parent corporation. They get to tell franchisees exactly how to run the franchise, rake in money off the top, and simultaneously have extremely limited liability should the franchisee be sued.

 

[Jimzz]

Auto manufacturers have been doing that for decades, telling their respective franchises how to look and run things, while the franchise bears the day to day operational and financial burdens,

this ruling is probably going to be appealed by more than just Mcdonalds.

Not really. Dealers can use what ever oil they want(As long as it meets spec), shop rags, computers, tools, etc... and even the stuff they want the dealer to have they usually do not buy from the car maker.


McDonalds requires them to buy a specific oil, napkins, terminals, etc... and they have to buy from McDonalds.

McDonalds is very protective over anyone that uses their name and they want you to buy everything from them. Its why McDonalds can make more money from a franchise then owning it outright when you take the risk and other cost into it.

 

[Sinsear]

I can see it now, McD workers unionize and get their pay increased to $10/hr. Then the union takes their dues of $2/hr so the workers are still effectively making the $8/hr they're currently making.

What union takes that percentage? Show me one please.

 

[Jimzz]

I don't know how much unions take in dues but I do know it's enough that the union mechanics that work for the company on the west coast feel they need to get a pay raise so they will make as much as the non union mechanics. All mechanics have the same wage scale.


Before anyone starts crying that the non union guys owe unions for negotiating higher wages. The non union workers were first and union mechanics added later when certain states required that local mechanics be hired/used on job within the respective states.

Citation needed.

 

[Oyeve]

Back in 1983 I was a cashier at a local supermarket chain in NYC, I was paid $3.35 an hour. Local union 338. We didnt have price scanners, we entered the price manually for each item. We had had to know what was and wasnt taxable and we bagged the shit ourselves. These kids and adults today want much more money for pushing a button with a picture that does all the totaling automatically and yet still manage to fuck up my order. Screw em I say. bastards.

 

[rudder]

I am sure the average mcdonald employee will love the idea of paying $40 a month in union dues. There won't be raises because a robot can just as easily drop fries into hot grease.

 

[Londo_Jowo]

Citation needed.

I work for a publicly traded company and will not provide any citations as it violates company policy.

 

[Zaap]

McDonalds requires them to buy a specific oil, napkins, terminals, etc... and they have to buy from McDonalds.

McDonalds is very protective over anyone that uses their name and they want you to buy everything from them.

That's why I recommend the "Big Mick" at McDowells.

 

[1prophet]

Not really. Dealers can use what ever oil they want(As long as it meets spec), shop rags, computers, tools, etc... and even the stuff they want the dealer to have they usually do not buy from the car maker.


McDonalds requires them to buy a specific oil, napkins, terminals, etc... and they have to buy from McDonalds.

McDonalds is very protective over anyone that uses their name and they want you to buy everything from them. Its why McDonalds can make more money from a franchise then owning it outright when you take the risk and other cost into it.

They are smarter than mcdonalds they get you the backway instead of the frontway, you want those special order cars for your customers?:sneaky:
http://gmauthority.com/blog/2012/06/heres-how-gm-is-transforming-its-dealers/

Voluntary… Or Not So Much?

While GM is touting the program’s optional nature, dealers who choose not to participate may not receive extra bonus cash from GM — giving them less leeway in bringing down prices when locked in a bidding war for customers. This can directly translate to possible lost sales of customers who would purchase an automobile from a direct competitor. Those dealers that fulfill the new dealer image program get incentive money that can range from $50,000 to $100,000 a year for smaller stores and be as much as $1.5 million for the bigger stores.
Another disadvantage for the stores that opt out of the changes will likely be the general impediment seen by customers who are cross-shopping a competitive brand with what could be described as “nicer” and “better” showrooms that improve the overall image of the vehicles and the brand. And while some dealers completely support the renovations and agree that the changes are necessary to remain competitive — despite the temporary inconvenience to customers in the form of construction and renovations — others are still opposed to them.
The Requirements

According to internal documents obtained by GM Authority, to comply with the dealer-image program, Chevy dealers are required to have a bright-blue archway with aluminum panels and a silver fascia. That seems like a reasonable requirement, but how about the fact that all signage — such as the printed “Chevrolet” marque as well as the neon-blue signs with the dealer’s name — has to be ordered from the Pattison Sign Group in Knoxville, TN? Stringent requirements like these make some dealers resistant to the program.
Specific facility design guidelines don’t end there, as a plethora of other requirements are often vendor-specific:

• The light gray floor tile needs to be a specific shade of gray and be a minimum of 12 inches by 12 inches in size; ideally, the tile should by 16×16; the striped pattern that runs perpendicular to the showroom facade is preferable.
• The light wood furniture should be supplied by non other than Herman Miller.
• The greeter station is a non-negotiable requirement across the board, even if it won’t have anyone sitting at it.
• The distance between the sales desks and the main customer entrance needs to be at least 20 feet.
• Sales offices need to have glass fronts and glass doors while an explicit shade of blue, silver, or orange paint needs to adorn the rear walls of any offices that face the showroom.
• At least five framed images must be present in the showroom, preferably installed in pairs or groups. Walls 12 feet or longer should contain 3 frames; walls between 5 and 12 feet in length should have 2. These can only be purchased from one vendor — DCI Marketing of Milwaukee.
• DCI is also the sole provider of display stands for wheels and other accessories that are part of the program’s requirements.
• Customer lounge chairs must be ordered from a supplier that charges $1,500 per unit.
• Dealer awards of any kind should not be in the showroom, while a special kind of halogen light is called for in order to “present the Chevrolet vehicles to customers in the best possible light”, read the guidelines

The Opposition

Some dealers call the demands of the dealer image program micromanaged, demanding, and inflexible, especially when it comes to vendor-specific requirements and control over the renovations. Those not in favor of the GM-arranged prerequisites say that they could save money by obtaining items from other vendors; furthermore, GM Authority has also received several letters from dealers, with those in small towns reporting a negative sentiment towards “the new and shiny stuff” from their patrons, who are used to the homely, small, family-owned business feel of their local dealers.
In retrospect, many stores that have already completed renovations have written to GM Authority stating that the results looks great and that they are proud to have excitement, again, in their store as well as the rebirth and the plethora of exciting new vehicles from their brand.
The GM Authority Take

Barring a few outlying exceptions — such as the small town instances — GM’s dealer image transformation program is a vital necessity that has been a long time coming.
Moreover, the tightly-controlled nature of the renovation requirements set out by GM is a substantial positive in our book, as it will present the Chevrolet brand — as well as other GM brands — in a consistent and homogenous fashion around the nation, and we assume — eventually — the world. This is a vital part of building brand value, trust, and credibility — aspects that should be the cornerstones of every product and brand offered by GM going forward.
Sure, some dealers could have obtained certain items for less; but we have a hunch that the savings would be minuscule in the grand scheme of the renovations and it’s very possible that the savings would have even resulted in an inferior product — because, let’s face it, dealers aren’t interior designers or decorators — while GM undoubtedly did the leg work on its end to set the specifications of the program in motion.
Ultimately, it should be all about the customer and the customer experience — something the dealer renovation program seems to highlight faultlessly; in fact, we like to think of Apple and the uniform Apple store experience as the benchmark for an exceptional retail program. Those that are familiar with Apple would be quick to point out that Apple owns and operates all of its retail stores. That said, it’s our opinion that GM did the best it could with dealerships that aren’t under its full control. As one dealer recently told us, “it’s GM’s show and we [the dealers] are the actors.”

​

 

[Jimzz]

I work for a publicly traded company and will not provide any citations as it violates company policy.

So in other words every claim you keep making you have nothing to prove it.

Color me shocked. :whiste:

 

[Ns1]

I am sure the average mcdonald employee will love the idea of paying $40 a month in union dues. There won't be raises because a robot can just as easily drop fries into hot grease.

Obligatory:

 

[Londo_Jowo]

So in other words every claim you keep making you have nothing to prove it.

Color me shocked. :whiste:

I know what the company's pay scales for mechanics, machinist, and welders, there's no difference in pay for non-union or union employees* throughout the US and Canada.

*union employees feel they should be compensated for their union dues so they constantly complain.

I'm not going to post an official company document online nor will I ever divulge information concerning the company for whom I work. 1 - it violates company policy, 2 - it would be in violation of SEC rules as it would be considered insider information.

 

[Pulsar]

I'll wait to see what happens in court. Complaints filed by a group that is financed by the same union that wants to unionize the workers, which are approved by a Democrat, are hardly going to be unbiased. This is just another partisian opening shot in what will end up going to courts and decided there.

 

[Fern]

-snip-
this ruling is probably going to be appealed by more than just Mcdonalds.

Yeah, I would think so too.

McDonald's rules are about uniformity and quality control. That hardly seems a reasonable basis to consider the HQ as an employer falling under control of the NLRB.

Fern