Will McDonald’s Remove Employee Wages off the Dollar Menu?

by Alexa Zelmanowicz

Between the push by President Obama to raise minimum wage rates and the allegations of patterns of racism, McDonald’s is losing its “lovin’ it” appeal.[1] In 2014, President Obama signed an executive order that raises “the minimum wage to $10.10 for all workers on federal construction and service contracts.”[2] Although the order does not pertain to corporations like McDonald’s, the order has sparked a movement by fast-food workers.[3] Since the order was signed, fast-food workers across the country have come together with the goal of raising McDonald’s minimum wage to $15 per hour.[4] Along with the executive order, this movement has found motivation in the recent decision by the NLRB to treat franchisees and the franchisor jointly liable for labor violations.[5]

This case concerned complaints from employees of McDonald’s trying to unionize.[6] Their 181 claims, forty-three of which the NLRB board found merit, alleged that McDonald’s restaurants were “illegally firing, threatening or otherwise penalizing workers for their pro labor activities.”[7] This decision has encouraged masses of McDonald’s employees to strategize and stage protests against the company and its restaurants.[8] The goal is to raise the minimum wage to $15 and it has support from labor leaders.[9] These leaders see this as an opportunity for workers to exert enough pressure on fast food companies to stop fighting unionization and get those wages raised to $15.[10] The fast-food workers have planned a strike to occur on April 15, 2015, where it expects over 60,000 people nationwide to join in the movement it has dubbed “Fight For 15.”[11]

McDonald’s has not been totally silent since President Obama’s initiation of increasing the minimum wage and the NLRB ruling. McDonald’s has announced it plans on raising the average pay of 90,000 workers to nearly $10 per hour.[12] The problem, however, is that this raise will not affect the workers employed at franchisee-operated restaurants.[13] Despite the fact that about 90% of McDonald’s are franchisee-run, there is an expectation that these franchisees will follow McDonald’s lead and adopt the changes it has planned.[14]

In addition to the nationwide protests plaguing McDonald’s, the company faces allegations of racism and sexism in the workplace. The class action lawsuit surpasses just labor issues and delves into civil rights territory.[15] The complaint, which is filed against the three chain stores in Virginia and McDonald’s Corporation, alleges patterns and practices of racism and sexism.[16] More than a dozen McDonald’s workers were told “there are too many black people in the store” upon firing.[17] One of the ex-employees named Willie Betts, an African-American man employed with the restaurant for five years, did not understand the type of profile the employer was referencing until Mr. Betts saw the group that had been fired.[18] This group was made up of mostly African-Americans and included one Hispanic man.[19] The complaint includes racist statements uttered by supervisors.[20] In addition to the racist comments, female employees faced unwanted sexual advances, which included text messages from a male supervisor of his genitals.[21] Due to the decision made by the NLRB in 2014, the class is able to attach liability to the McDonald’s corporation as well.[22]

Will 2015 see the fall of the Golden Arches? Or will McDonald’s find a way to change before it is too late?

[1] Willie Blackmore, McDonald’s Labor Problems Have Officially Become a Civil Rights Issue, Take Action (Jan. 22, 2015), http://www.takepart.com/article/2015/01/22/civil-rights-lawsuit-mcdonalds.

[2] U.S Department of Justice: Wage and Hour Division, Fact Sheet: Proposed Rulemaking to Implement Executive Order 13658, Establishing a Minimum Wage for Contractors (June, 2014), available at http://www.dol.gov/whd/flsa/nprm-eo13658/factsheet.htm.

[3] Id.

[4] Steven Greenhouse, Movement to Increase McDonald’s Minimum Wage Broadens its Tactics, The New York Times (Mar. 30, 2015), http://www.nytimes.com/2015/03/31/business/movement-to-increase-mcdonalds-minimum-wage-broadens-its-tactics.html?_r=2.

[5] Reuters, U.S. NLRB Issues Labor Violations Complaint Against McDonald’s, Business Insider (Dec. 19, 2014, 1:31 PM), http://www.businessinsider.com/r-us-nlrb-issues-labor-violations-complaints-against-mcdonalds-2014-12.

[6] Steven Greenhouse, McDonald’s Ruling Could Open Door For Unions, The New York Times (July 29, 2014), http://www.nytimes.com/2014/07/30/business/nlrb-holds-mcdonalds-not-just-franchisees-liable-for-worker-treatment.html.

[7] Id.

[8] Greenhouse (Mar. 30, 2015), supra note 4.

[9] Steven Greenhouse, Labor Ruling on McDonald’s Has Business Worried, The New York Times (July 30, 2014), http://www.nytimes.com/2014/07/31/business/labor-ruling-bewilders-franchisers.html?_r=0.

[10] Id.

[11] Greenhouse (Mar. 30, 2015), supra note 4.

[12] Lisa Baertlein, McDonald’s Raising Average Worker wage to About $10 an Hour, Reuters (Apr. 2, 2015, 9:42 AM), http://www.reuters.com/article/2015/04/02/us-mcdonalds-minimumwage-idUSKBN0MS5A220150402.

[13] See Baertlein, supra note 12.

[14] Id.

[15] Blackmore, supra note 1.

[16] Id.

[17] Id.

[18] Id.

[19] Id.

[20] Id. (quoting fired employee Destiny Betts who claimed her assistant supervisor said “she was going to get the ghetto and the rachetness out of the store.”)

[21] Id.

[22] Id.

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