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Former workers take on McDonald’s Corp in Title VII suit against franchisee

A group of former employees have sued McDonald’s Corporation—along with a franchisee that operates stores in South Boston and Clarksville, Virginia—over what they called “rampant and racial and sexual harassment” at the hands of the highest-level supervisors, and a plan that reduced the number of African-American employees so they could be replaced by white workers instead. Franchisee Soweva Co.’s owner purportedly explained to workers that “the ratio was off in each of the stores,” which had predominately African-American workforces, and he just wanted the “ratio to be equal.” The lawsuit comes a month after the NLRB named the fast-food giant as a joint employer in a batch of unfair labor practice complaints filed against franchisees for actions they purportedly took in the face of widespread protests over low wages and other working conditions.

“Soweva’s supervisors were blunt, telling employees that it was ‘too dark’ in the restaurants, and that they were going to hire different workers because they ‘need to get the ghetto out of the store,’” the plaintiffs allege. Just before carrying out the plan, one supervisor purportedly said to another, “now we can get rid of the n****rs and the Mexicans. In March last year, a “large number of white employees were hired,” and on May 12, about 15 African-American workers were fired, according to the complaint.

The plaintiffs include nine African-American and one Hispanic former employees who are seeking relief under Title VII and Section 1981. Several of them, per training instructions given by McDonald’s Corporation, called the giant fast food corporation to complain about their discharge and the “blatant racial discrimination,” but McDonald’s did nothing, the plaintiffs allege. The plaintiffs are seeking relief for the discrimination and harassment they endured from all the responsible parties, which they list as McDonald’s Corporate, Soweva Co., and its owner.

Harassment. Restaurant supervisors allegedly demeaned African-American workers and frequently complained, “there are too many black people in the store.” Supervisors called African-American workers “b***h, “Ghetto” and “ratchet,” according to the complaint. Hispanic workers were purportedly called “dirty Mexican.” Among other things, supervisors also disciplined African-American employees for rule infractions that were forgiven when committed by their white counterparts, inappropriately touched female workers on their legs and buttocks, sent female employees sexual pictures, and solicited sexual relations from female employees.

McDonald’s as joint employer. The 41-page complaint names McDonald’s Corporation and McDonalds USA, LLC, as a defendants, citing a series of allegations that would support the notion that it is a joint employer. According to the complaint, there are more than 15,500 McDonald’s restaurants operating in the United States and Canada; about 90 percent of those in the United States operate as a franchise restaurant, with the rest owned and operated directly by McDonald’s Corporate. “McDonald’s Corporate has control over nearly every aspect of its franchised restaurants’ operations,” the plaintiffs assert.

Among the list of things that purportedly put McDonald’s Corporate in control of its franchisees are business manuals that contain “detailed instructions for franchisees in areas  including operations procedures, bookkeeping and accounting procedures, business practices and policies, personnel management.” The plaintiffs also cite, among many others, provisions in the franchise agreement that requires Soweva to enroll managerial employees for training at “Hamburger University,” or any other training center designated by McDonald’s Corporate.

The Operations and Training Manual (OTM) purportedly tells employees to report incidents of unlawful discrimination and harassment with the promise that “McDonald’s will investigate any report thoroughly, with sensitivity towards confidentiality. If the report has merit, McDonald’s will take corrective action, including, but not limited to, disciplinary action against the offender ranging from a warning to termination.” An “our policies” manual that McDonald’s gives to franchise restaurants also tells employees that discrimination and harassment are prohibited, and failure to follow rules will result in the risk of discipline.

NLRB complaints against McDonald’s USA. Last month, the National Labor Relations Board turned a smoldering dispute into a firestorm when its Office of the General Counsel announced that it had issued 13 complaints against various McDonald’s franchisees and their franchisor, McDonald’s USA, LLC, as joint employers, calling the fast-food giant a “putative joint employer.” The complaints alleged that McDonald’s USA and certain franchisees violated employees’ rights by, among other things, making statements and taking actions against them for engaging in activities aimed at improving their wages and working conditions—including their participation in nationwide fast food worker protests during the past two years. A “McDonald’s Fact Sheet” posted by the Board details the charges, settlement efforts, and complaints that were issued.

Board reconsidering joint employer test. The Board is also reconsidering its longstanding joint-employer test. Earlier last year, in May, the NLRB extended an invitation to parties and interested amici to file briefs addressing its joint-employer standard, as raised in Browning-Ferris Industries (No 32-RC-109684). The Board had granted the employer’s request for review of a Regional Director’s decision and direction of election, finding it raised substantial issues warranting review.

In September, the House Education and the Workforce Subcommittee held a hearing on the NLRB’s reexamination of its joint employer test in light of current trends—a move that Employment, Labor, and Pensions Subcommittee Chair Phil Roe (R-Tenn) called a “radical effort [that] is detached from reality.” At the hearing, Expanding Joint Employer Status: What Does it Mean for Workers and Job Creators?, nearly the entire panel of invited witnesses opposed the NLRB’s anticipated expansion of its current rule to bring more workplaces under the reach of the NLRA. However, the single invited witness who offered an opposing point of view discussed the realities of today’s workplaces, painting a dismal picture of poverty wages and safety issues that he said could rightly be addressed via an updated joint employer test.

The plaintiffs filed their lawsuit, Betts v. McDonald’s Corporate, in the Western District of Virginia, Danville Division; the case number is 4:15-cv-00002-JLK

Companies: McDonald’s Corporate; McDonalds’s USA, LLC; Soweva Co.