The Latest McDonald's Lawsuit Is a Big Deal for Fast Food Workers

[Absentglare]

Here is the deal. Great thread. This needs discussion. I own two franchises in the largest geriatric non medical homecare system in the country. Across the country there are over 400 franchises in this system. Here's how franchises work:

1. You open your own business with the rights to use the branding and operational advice provided by the franchisor.
2. You pay the franchisor a percentage of your sales in addition to the initial franchise fee.
3. Then YOU start with YOUR MONEY from ZERO CLIENTS and build YOUR BUSINESS.
4. YOU are on the hook 100% for liability and wage claims.
5. YOU are on the hook to pay for everything related to your business.
6. The franchisor can NOT tell you what do do in the running of your business, except that they can set standards for the way their logos and intellectual property are used and they require reporting in various areas that they use to ensure you are paying them properly and for industry research.

How, then, could my business be considered to be a satellite office of the franchisor corporation? They don't own or control my business. They don't pay me. I pay them. All of our leases are in my name. All of our payroll is my obligation....

One of the reasons they want to do this is that they want to consider the franchise system as a huge multinational corporation and expect us to operate as if we were. However, we are small businesses. We don't have the money that those large corporations have.

This is a huge deal for all franchise systems and is an attempted power grab by the democrats and the NLRB.

Lots of hysteria in this response. Perhaps you should consider that relying on employee abuse isn't a valid business model.

 

[jimbo]

McD corp doesn't pay the payroll but they do calculate the pay. Therefore, they are responsible for any mistakes in pay their software causes

I'm not sure that's true. I'd need more data. Does McD's corporate determine wages and benefits? I don't believe they do. Otherwise corporate would simply be acting as an accounting firm.

If corporate sets the wage and benefit scale, then they are responsible. If not, they aren't.

 

[radcen]

You said it yourself.

They license the business model. That makes them ultimately responsible for at least some aspects of that model.

Complete what I said myself. There are many things they cannot deviate from... branding, food prep, sometimes even food sources, absolutely. That's what the franchisee is (partially) paying for, the "proven" system that appeals to customers.

That being said, McD's does not micro-manage every single aspect.

 

[sangha]

I'm not sure that's true. I'd need more data.

It's in the court papers

https://www.scribd.com/document/318386635/McDonalds-suit#fullscreen&from_embed

See the section titled "Overtime Claims"

Plaintiffs contend that many of the crew members worked over eight hours per day and forty hours per week without being paid the overtime wages due under California Labor Code § 510(a) and IWC Wage Order 5-2001§ 3(A)(1). The Smiths used McDonald’s standardized
“ISP” software to keep track of work hours. The ISP system was pre-programmed to assign all hours worked on a shift to the day on which that shift started, rather than assigning the hours to the days on which those hours were actually worked. Dkt. No. 157 at 5. This meant, for example, that all hours worked on an overnight shift would be recorded as though they had all been worked on the day the overnight shift began (Day 1). A crew member could then miss out on overtime pay for Day 2, even if she had a subsequent shift and in fact worked more than eight hours on that second day

 

[Rogue Valley]

As a brief side-order...


In the Russia-occupied Donbass regions of eastern Ukraine, at least three McDonald's franchises have been 'rebranded' (stolen) and renamed DonMak (ДoнMak).

One of the 'new' DonMak fast-food outlets

An order of DonMak pop, fries, burgers, and nuggets

 

[Master PO]

I'd like to keep this conversation away from the $15/hr aspect. We already have many threads about that. I'd like this thread to be about the question: Who is the "employer"? McDonald's corporation? Franchisee? Joint/both?

I say the Franchisee. They're a separate business, IMO, and are only licensing the name and business model. There are many things they cannot deviate from per their contract, but to the best of my knowledge what they pay is not one of them.

Thoughts?

waiting for those hamburger making machines to be installed.

 

[Absentglare]

Complete what I said myself. There are many things they cannot deviate from... branding, food prep, sometimes even food sources, absolutely. That's what the franchisee is (partially) paying for, the "proven" system that appeals to customers.

That being said, McD's does not micro-manage every single aspect.

It doesn't have to be an explicit requirement to be consistent in implementation. McDonalds invested a lot of money to make their employees as disposable as possible. That gives them the ability to offer little more than the lowest legal wage.

 

[Absentglare]

McDonalds uses the disposability of workers as leverage.

It's like a partner who is always threatening to break up with you to get whatever they want. It can be an abusive relationship.

 

[radcen]

It doesn't have to be an explicit requirement to be consistent in implementation. McDonalds invested a lot of money to make their employees as disposable as possible. That gives them the ability to offer little more than the lowest legal wage.

When you say "McDonald's", do you mean the corporation, the franchisees, or both?

Regardless the key word is: "requirement". Is the McD's system of pay required per the franchise contract? Or, is it optional?

If it's spelled out in the franchisee contract as required, I will concede the point (for franchisees, corporate stores are indeed covered by corporate pay policy). If it is not, I won't.

McDonalds uses the disposability of workers as leverage.

It's like a partner who is always threatening to break up with you to get whatever they want. It can be an abusive relationship.

That's just life... the one with the leverage dictates the rules. In anything, not only this.

In this case you have the person with little to no skills and/or experience, and few options, opposite someone who is willing to pay said person money AND who has many options to pick from several applicants. Who has the leverage?

It's not wholly fair, and it's not my ideal situation, but it simply is.

 

[radcen]

waiting for those hamburger making machines to be installed.

In a way I'm not, but also in a way I wonder if the quality and consistency and accuracy will improve, so from a customer's standpoint it may end up being a good thing. :shrug:

 

[Absentglare]

When you say "McDonald's", do you mean the corporation, the franchisees, or both?

Regardless the key word is: "requirement". Is the McD's system of pay required per the franchise contract? Or, is it optional?

If it's spelled out in the franchisee contract as required, I will concede the point (for franchisees, corporate stores are indeed covered by corporate pay policy). If it is not, I won't.



That's just life... the one with the leverage dictates the rules. In anything, not only this.

In this case you have the person with little to no skills and/or experience, and few options, opposite someone who is willing to pay said person money AND who has many options to pick from several applicants. Who has the leverage?

It's not wholly fair, and it's not my ideal situation, but it simply is.

They spent money to make sure that they have extra leverage against workers with experience. It's part of their business model to exploit desperation for money at the lowest end of the socioeconomic spectrum. That's why they did things like provide a hotline to help their workers live off of social welfare programs, because they know that their workers won't be able to afford to survive on their own.

 

[radcen]

They spent money to make sure that they have extra leverage against workers with experience. It's part of their business model to exploit desperation for money at the lowest end of the socioeconomic spectrum. That's why they did things like provide a hotline to help their workers live off of social welfare programs, because they know that their workers won't be able to afford to survive on their own.

Ok... :shrug:

 

[Absentglare]

Ok... :shrug:

Do you really think McDonalds shouldn't be held accountable for providing software that undercounts overtime hours ?

 

[ludin]

They spent money to make sure that they have extra leverage against workers with experience. It's part of their business model to exploit desperation for money at the lowest end of the socioeconomic spectrum. That's why they did things like provide a hotline to help their workers live off of social welfare programs, because they know that their workers won't be able to afford to survive on their own.

That isn't McDonald's fault the people that look for jobs there have no others skills.

 

[ludin]

Do you really think McDonalds shouldn't be held accountable for providing software that undercounts overtime hours ?

Software only calculates what is entered into it.
If someone enters 45 hours then it calculates 45 hours.

 

[radcen]

Do you really think McDonalds shouldn't be held accountable for providing software that undercounts overtime hours ?

1) Go back to my previous about regarding whether it's required or not.

2) Said software would have to comply with the laws of the state the store is in. Laws vary from state to state. A handful of state require OT over 8 hrs/day, most states only require OT over 40 hrs/week. If the laws for a given state are vague, yet they follow the letter of the law, that's not McD's fault. Tighten up the law.

 

[sangha]

When you say "McDonald's", do you mean the corporation, the franchisees, or both?

The very fact that you can't distinguish between the corp and the franchise demonstrates the validity of the plaintiffs claim that the franchise is an "ostensible agent" of the corp

Regardless the key word is: "requirement". Is the McD's system of pay required per the franchise contract? Or, is it optional?

Irrelevant. McD corp calculated the pay on their software and they calculated incorrectly. It was their mistake and they are responsible for it.

 

[sangha]

2) Said software would have to comply with the laws of the state the store is in. Laws vary from state to state. A handful of state require OT over 8 hrs/day, most states only require OT over 40 hrs/week. If the laws for a given state are vague, yet they follow the letter of the law, that's not McD's fault. Tighten up the law.

The court clearly states that McD's software is not in compliance with the law. McD did not follow the law. They are responsible

 

[Absentglare]

1) Go back to my previous about regarding whether it's required or not.

2) Said software would have to comply with the laws of the state the store is in. Laws vary from state to state. A handful of state require OT over 8 hrs/day, most states only require OT over 40 hrs/week. If the laws for a given state are vague, yet they follow the letter of the law, that's not McD's fault. Tighten up the law.

Their business model relies on exploiting the American labor force as much as possible.

They exploit so severely that they violated the law.

They are being held accountable for the laws that the system they sell ends up breaking.

 

[kamikaze483]

Lots of hysteria in this response. Perhaps you should consider that relying on employee abuse isn't a valid business model.

What does this mean? Relying on employee abuse?

 

[Absentglare]

What does this mean? Relying on employee abuse?

Yes, a payroll system that consistently makes "mistakes" that underpay employees is essentially fraud.