The National Labor Relations Board on Friday designated McDonald's Corp. as a "joint-employer" with franchisees at nearly 14,000 U.S. restaurants, delivering a big win to unions.
The board's general counsel's office ruled that the company violated the rights of employees openly seeking better pay and working conditions. Hearings are set for March on whether to pursue disciplinary steps.
In a statement, McDonald's called the move an "overreach" and vowed to contest it. The company said it has been the target of a union-financed campaign and is only defending itself against an attack on its business.
The NLRB said it has found 86 cases in which the company's unlawful conduct included sanctions against workers who had sought job improvements, including by participating in nationwide fast food worker protests.
Violations included firings, reduced hours, threats, surveillance and discriminatory discipline against workers who engaged in union or other legally protected activity, the board said.
The NLRB is a federal agency that resolves employee-management disputes in the private sector. It disclosed in July it had received 181 complaints against McDonald's and its franchisees since November 2012.
The agency contends the company and its franchisees are joint employers of the fast-food workers. McDonald's denies that claim.
The company wields such extensive influence over the business operations of its franchisees that it effectively is the top boss, the NLRB said.
Republican critics of the current board have accused it of being consistently political in its rulings over the past few years, with three Democratic members and two Republican ones.
Over the past two years, workers at McDonald's and other fast-food outlets in many cities have been engaging in brief "strikes" while calling for an increase in the minimum wage from the current $7.25 to $15 an hour and the right to unionize.
In its statement, McDonald's said that the NLRB complains "improperly and dramatically strike at the heart of the franchise system." It vowed to "contest the joint employer allegation as well as the unfair labor practice charges in the proper forums."
"McDonald's and its corporate lobbyists continue to claim that the company has no responsibility for workers at its restaurants, but today's complaint underscores the obvious fact that McDonald's is the boss," said Micah Wissinger, an attorney whose law firm brought the case on behalf of McDonald's workers in New York City.
The allegations of unlawful conduct by joint employers include "discriminatory discipline, reductions in hours, discharges, and other coercive conduct directed at employees in response to union and protected concerted activity," according to the NLRB.
David French, senior vice president for the National Retail Federation, called the NLRB position "so confusing and so in conflict with what the reality is." One of the efficiencies of franchising is that "it's made it possible to do a better job of managing a local operation because the franchisee is invested in that process," French said.