McDonald's hit by US worker claims

A top US labour regulator has alleged that McDonald's and its franchisees have violated worker rights in a step that could upend the fast food franchise model.

The National Labor Relations Board filed complaints in 78 cases against the world's largest Restaurant Group and franchisees across the country.

The complaint alleges that McDonald's and some franchisees "violated the rights of employees" by firing or intimidating workers who had advocated for a raise in the minimum wage and an improvement in fast food employee working conditions, including in nationwide strikes. Barring a settlement, the board will hold hearings beginning in March.

It follows a July NLRB decision to name the struggling fast-food chain as a "joint employer".

The board's decision means the burger chain may be liable for unfair labour practices at its 14,000-plus US restaurants, dealing a blow to one of the long-running franchise model's key benefits.

The Illinois-based company has consistently argued that its 3,000 franchisees set wages and are responsible for working conditions, rather than the parent company.

That position becomes increasingly difficult to hold given the NLRB complaints, which were brought against McDonald's and franchisees in New York, Chicago, San Francisco and a ten other regions.

In a statement, McDonald's said the actions "improperly and dramatically strike at the heart of the franchise system". The company noted that the complaints themselves do not amount to rulings, and that final resolution "will require a lengthy process".

"These allegations are driven in large part by a two-year, union-financed campaign that has targeted the McDonald's brand," the company said.

The International Franchise Association, a lobby group, said it would "vigorously challenge" the decision.

The franchise model is popular among most major fast-food chains, including Yum Brands and Burger King, because it allows them to keep costs down while collecting royalties and fees from franchisees.

The news comes as fast food workers throughout the country continue to rally for union rights and a $15 minimum wage. In November, a number of states and municipalities voted to raise local minimum wages above the current $7.25 federal level.

Micah Wissinger, a lawyer with Levy Ratner who brought the case for workers in New York, said the complaint "underscores the obvious fact that McDonald's is the boss".

"The complaint validates what workers have been saying over and over again - that McDonald's requires franchisees to adhere to such regimented rules and regulations that there's no doubt who's really in charge," he said in a statement.

Shares in McDonald's are trading near a one-year low as the company struggles to grow. Earlier this month it reported yet another month of decreasing same-store sales, with November revenues down 4.6 per cent in the US.

Chief executive Don Thompson said in October that the company was taking "decisive action to fundamentally change" its business after reporting third-quarter sales and earnings below expectations.

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