Recent McDonald’s Ruling Could Upend U.S. Franchising System

The International Franchise Association agreed, maintaining that the decision would “upend years of federal and state legal precedent and threatens the sanctity of hundreds of thousands of contracts between franchisees and franchisors.” The decision was “wrong and unjustified,” the association said.

The most immediate application could be to open the door further to unionization of fast-food workers because, in legal terms, it would be as if all of a chain’s workers ultimately were employed by the franchisee.

Understanding that vital point, the Service Employees International Union (SEIU) greeted the decision with glee. “HUGE victory for labor & fast food workers!” the union tweeted. SEIU has been instrumental over the last couple of years in fomenting protests around the country by fast-food workers seeking a boost in the minimum wage, even up to $15 an hour.

Of course, such advocacy also makes the union look better in the eyes of rank-and-file fast-food employees who might ultimately be voting on joining a union. And labor allies had a different view of the implications of the ruling for SME franchisees.

“McDonald’s can no longer get away with reaping all the benefits and the profits while saddling their franchises with all the risks and the costs,” Micah Wissinger, a New York labor attorney involved in some of the cases that have been filed against McDonald’s, told The Washington Post.