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National Labor Relations Board Paves Way For Union Organizing At McDonald’s (Read More…)

By Cole Stangler August 27 2015

More than two years ago, the so-called Fight For 15 launched high-profile protests at fast-food joints with what seemed an audacious demand: “$15 and a union.” Since then, several major cities have moved to meet the first part of the rallying cry. Now, a landmark ruling from the National Labor Relations Board has brought the slogan’s other half within striking distance.

In a 3-2 decision that brings sweeping new legal accountability to fast-food corporations and other employers that rely on franchisees and subcontractors, the National Labor Relations Board (NLRB) has expanded its definition of what constitutes a “joint employer.”

“It is not the goal of joint-employer law to guarantee the freedom of employers to insulate themselves from their legal responsibility to workers, while maintaining control of the workplace,” wrote a majority for the board, which oversees labor relations in most of the private sector. “Such an approach has no basis in the [National Labor Relations Act] or in federal labor policy.”

The decision stems from workers’ attempts to organize a union at Browning-Ferris Industries, a New Jersey waste management company. But its significance extends to workplaces across the country.

McDonald’s and other fast food companies have long argued they do not bear responsibility for the actions of their franchisees—a line used to deflect accusations of labor law abuses, discourage the possibility of union organizing, and reject demands to meet worker advocates at the bargaining table.

The NLRB ruling does not force employers to abandon their use of franchisees or subcontractors. It does, on the other hand, put pressure on such employers to confront labor complaints and demands that occur across their contracting chains. It paves the way for these parent companies to recognize unions that subcontracted and franchised workers form and face potential charges of unfair labor practices any of them file.

Under the board’s old standard, bosses generally needed to exercise direct control over the terms and conditions of employment in order to be considered “joint employers.” But in its Thursday ruling, the agency said a company that exercises more indirect forms of control or reserves the authority to do so can be deemed a “joint employer.”

The NLRB defended its move as a necessary response to changes in American employment practices. It noted that “the diversity of workplace arrangements in today’s economy has significantly expanded” and “the procurement of employees through staffing and subcontracting arrangements or contingent employment, has increased steadily.”

Among other figures, the board cited numbers from the Bureau of Labor Statistics that show employment in the temporary help services industry, a subset of contingent work, roughly doubled from 1990 to 2008, reaching 2.3 million workers.

Labor and business groups immediately tussled over the decision’s significance.

“The decision will force franchise and contract businesses into a one-size-fits-all business model when it comes to liability and wage issues,” said Iain Murray, vice president for strategy at the Competitive Enterprise Institute, a libertarian think tank funded by the restaurant industry. “That may be good for labor union bosses and trial lawyers in search of big targets of opportunity, but it will hurt anyone who now benefits from flexible work arrangements.

“Corporate lobbyists will no doubt raise the alarm that this decision dooms subcontracting,” said Christine Owens, executive director of the pro-union National Employment Law Project, in a statement. “That’s far from the truth. This ruling simply means that corporations that share control over operations cannot feign ignorance or disclaim responsibility for illegal acts, especially when those acts flow from the business model the lead company imposes.”

Posted by Admin on 08/27 at 03:49 PM

Union takes a McDonald’s challenge overseas (Read More…)

Noam Scheiber, New York Times |Aug 24, 2015
McDonald’s long ago went global. Lately, the anti-¬McDonald’s campaign has started following it around the world.

The union-¬led effort to raise wages and organize workers at fast-¬food chains in the United States is expanding its focus beyond organized protests at home — its key point of leverage for almost three years — to highlighting McDonald’s actions abroad in hopes that foreign regulators will bring further pressure to bear on the company.

The efforts are intended to build on the success of the anti¬-McDonald’s campaign in raising wages for fast¬-food workers in the United States, particularly in New York State.

But it is also a tacit acknowledgment that the campaign’s second major goal, a union for workers at McDonald’s and other fast¬-food restaurants, remains elusive. The activists plan to turn their attention to McDonald’s in the overseas markets where its operations have been more lucrative recently as a way of drawing the company to the bargaining table in this country.

“I see this conversation as a departure point from a campaign that publicly has been seen as strikes and demands around $15 and the union,” Mr. Courtney said. “We intend to lay out what we can, what we what we know at this point, then embark on taking our case to other forums over the fall, into next year as we need to.”

To that end, dozens of legislators, union leaders and McDonald’s workers from around the world have converged this week in Brasilia, the capital of Brazil — most of them at the S.E.I.U.‘s expense — to draw attention to their accusations against McDonald’s.

The events will reach their climax on Thursday, when Mr. Courtney and several legislators and workers will testify before a committee of the Brazilian Senate. The witnesses are expected to describe what the campaign says are abusive labor practices at McDonald’s restaurants around the world, the corporation’s efforts to evade taxes in Brazil, and tax evasion and anti-competitive practices across Europe.

“In Europe, we have austerity policies,” said Jutta Steinruck, a member of the European Parliament from Germany who will also be testifying on Thursday. “If we don’t take in taxes, it’s an issue of social policy. We will not be able to pay subsidies for poor people, for their health care.” Continue reading the main story

The escalation of the international side of the campaign comes at a time when the financial performance of McDonald’s has flagged, particularly in the United States, where the company acknowledges that business has been in decline for nearly three years. By contrast, growth in many European countries, particularly Britain, has been stronger.

The poor performance recently prompted a leadership change at the company, whose new chief executive, Steve Easterbrook, has begun what he has called a turnaround plan that would “return critical markets to sustainable growth by regaining customers’ trust and loyalty.”

Mr. Easterbrook has also vowed to transform McDonald’s into “a modern progressive burger company.” One of his first major acts as chief executive was to raise the minimum wage the company pays employees at all of its corporate-owned stores to one dollar over the locally-mandated minimum wage.

Despite the financial strains and more conciliatory posture from Mr. Easterbrook, however, most analysts say the odds of a successful unionization effort at McDonald’s remain daunting. There is little evidence that investors take the threat seriously: There was not a single question about the possibility during the company’s second-quarter conference call with analysts in July, or even about the various regulatory actions unions have helped initiate abroad.

Meanwhile, the company’s on-the-ground defenses against unionization appear next to impregnable.

“Unions have been trying to organize McDonald’s for decades,” said Richard Adams, who worked for McDonald’s for more than 15 years, most recently as director of franchising in the Western United States, and now works as a franchise consultant. “This is nothing new to McDonald’s.”

Mr. Adams explained that even if the company decided to adopt policies that would help workers organize at corporate-owned stores, franchisees would probably simply ignore the efforts. “The company has no authority or power to make those agreements with unions on behalf of franchisees,” he said. “If I was a franchisee, I wouldn’t even read the memos.”

Still, McDonald’s faces some additional challenges on the labor front.

Last week, the National Labor Relations Board rejected an appeal by McDonald’s in a case that will decide whether the company is a joint employer of workers at its franchises. A joint employer determination would make it easier to apply any concession workers wrested from the McDonald’s Corporation to workers at McDonald’s franchises, including, for example, a card-check provision that could bring a union into existence at a store once a majority of workers signed union cards.
“The S.E.I.U. is hoping that if the decision comes out the way they want it to, the overseas efforts will be one more pressure point on McDonald’s to grant some kind of organizing concession,” said Glenn Spencer of the U.S. Chamber of Commerce.

The wage increase at McDonald’s may also do little to appease its employees. A worker at a McDonald’s in Chichester, Pa., said that she and her colleagues had their hours cut sharply after the wage increase went into effect on July 1, with the store’s manager routinely depriving them of two or three hours of work on an eight-hour shift.

The worker, who spoke on the condition of anonymity for fear of being fired, said she had typically worked 65 hours in each two-week pay period before the wage increase. “The last pay period it was 46 hours,” she said. “This pay period it was 43. Per week, that’s 21-22 hours.” (A second person who examined the worker’s recent pay stubs corroborated her account.)

“Like any place of business, employee shifts and hours vary depending on the guest traffic,” said Heidi Barker Sa Shekhem, a McDonald’s spokeswoman. “Our sales information for this location shows traffic was slower in July than in June, which may have impacted some employee shifts and hours.”

While McDonald’s defenses at home remain strong, the labor campaign abroad hopes to weaken the company on other fronts.

The European Commission recently began looking into accusations leveled by a coalition of European and American unions and anti-poverty activists that McDonald’s avoided over 1 billion euros in taxes in Europe between 2009 and 2013 by funneling royalties to a Luxembourg-based subsidiary.

Earlier this week, a Brazilian union filed a complaint with authorities in that country asserting that McDonald’s has gone to elaborate lengths to avoid paying taxes there as well.

At the hearing in Brasilia on Thursday, the anti-McDonald’s campaign will unveil what it says is evidence that the company is engaged in anti-competitive behavior in Europe, where the unions say that McDonald’s uses its market power to compel franchisees to pay far more in rent as a percentage of their sales than its corporate-owned stores pay.

Ms. Barker Sa Shekhem disputed the unions’ calculations. “In all of the markets mentioned — the U.K., France, Spain — our company-owned restaurants actually pay higher rents than franchisees” as a percentage of sales, she said. “We are quite confident in not only the legality, but in the appropriateness of the process.”

But the merit of each complaint may be less important than the overall labor effort to paint McDonald’s as an outlaw corporate citizen. “The approach is to throw everything out there and see what sticks,” said Ruth Milkman, a sociologist who studies labor at the City University of New York Graduate Center.

Professor Milkman pointed to a campaign in Southern California in the early 1990s by immigrant construction workers, with the support of the A.F.L.-C.I.O. and the United Brotherhood of Carpenters. “They collected thousands and thousands of documents about overtime laws that had been violated, then basically dropped all those cases in exchange for the union,” she said.

In the interview, Mr. Courtney implicitly acknowledged a similar strategy. “McDonald’s could either go down this road of having issue after issue raised and public light shined on it, and they’re not going to look good,” he said. “Or they can say, ‘We’re going to lead, we’re going to turn our reputation around by turning our company’s basic business model around.’”

Posted by Admin on 08/24 at 09:38 AM