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McDonald’s corporation sued for its franchisees’ race and sex discrimination

A group of former McDonald’s employees have sued the McDonald’s corporation and the franchises where they worked for race and sex discrimination.  The employees who filed the lawsuit worked for McDonald’s restaurants in Boston and Clarksville, Virginia.  Their allegations of discrimination include claims that the restaurants believed that their employees were too “dark.”  So, the plaintiffs claim, the restaurants fired black and Hispanic employees so that they could replace them with white employees.  The female plaintiffs also claim, among other things, that they experienced sexual harassment, including inappropriate touching and sexual comments.

This lawsuit is particularly noteworthy because of the claims against the McDonald’s corporation.  The McDonald’s business model involves contracting with smaller independent companies, called franchisees, and letting those franchisees run the restaurants.  This business model normally gives the corporation, called the franchisor, the advantage of limiting its liability from lawsuits.  That way, if a customer, for example, gets injured because of a restaurant employee’s negligence, the customer can sue the franchisee but not the franchisor.  In this race and sex discrimination lawsuit, however, these former employees allege that McDonald’s corporation exercises so much control over its franchisees that they are no longer independent.

The plaintiffs in the lawsuit allege, among other things, that McDonald’s corporation controls its franchisees through policies and manuals that govern every aspect of restaurant operations; continual oversight by corporate representatives; control over franchisee employees’ schedules and assignments; comprehensive training of all employees; and hiring decisions.  Given this amount of control, the plaintiffs argue that the franchisor-franchisee relationship is just a legal fiction.  Given the realities of the relationship between McDonald’s corporation and its franchisees, the plaintiffs argue, the McDonald’s corporation should be held responsible for the discriminatory actions of its franchisees.

Organizations that have an interest in minorities’ and employees’ rights, the NAACP and Fight for $15, are supporting the plaintiffs in this case.  Needless to say, McDonald’s corporation will likely put up a vigorous defense to this lawsuit. If McDonald’s loses, it will be interesting to see whether the company takes actions to loosen its control over franchisees.


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