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McDonald's Faces Potential Joint-Employer Liability in Harassment Suit

A mcdonald's restaurant with people walking in front of it.

McDonald's Corp. must face sexual-harassment charges filed by an employee at a St. Louis-based franchise, according to a federal judge in Missouri.

The plaintiff alleged that she was forced to quit after a few weeks on the job due to severe sexual harassment. She filed a lawsuit against McDonald's Corp. and the franchise operator, asserting violations of Title VII of the Civil Rights Act of 1964.

McDonald's argued that the plaintiff was an employee of the franchise, not the parent company, and so the claims against it should be dismissed. But the judge disagreed.

The plaintiff alleged that McDonald's Corp. and McDonald's USA conducted frequent inspections, called out employees who were not performing their jobs in accordance with McDonald's standards, trained the general manager, and provided guidance about employee training on preventing and reporting sexual harassment. "Although these allegations are relatively general, they are specific enough to put the defendants on notice of the claim against them," said Judge Rodney W. Sippel of the U.S. District Court for the Eastern District of Missouri.

We've rounded up articles and resources from SHRM Online and other trusted outlets on the news.

Joint Employment Adequately Alleged

The plaintiff also alleged that "she applied for her job on a generic McDonald's application that Defendants supplied," according to the judge's order. The plaintiff's combined allegations, taken as true, "are sufficient to raise the reasonable expectation that discovery will reveal evidence of a joint employer or agency relationship," Sippel said, noting that it is a "close case." He explained that courts will consider the interrelation of operations, common management, centralized control of labor relationships, and common ownership or financial control.

(Bloomberg Law)

Beginning Stages

The judge didn't make a final decision as to whether McDonald's is a joint employer, but McDonald's Corp. now must defend against the sexual-harassment claims as a potential joint employer. The parties will present evidence showing how much (or little) McDonald's corporate was involved in the daily operations of the franchise. "It remains to be seen whether the evidence uncovered through discovery will suffice to establish McDonald's corporate as a joint employer," according to Dolley Law in Creve Coeur, Mo. "And even if so, it remains to be seen whether [the plaintiff] can prove her claims." 

(Dolley Law)

Joint-Employer Questions

McDonald's has faced scrutiny over potential joint-employer liability in the past. In 2019, for example, the 9th U.S. Circuit Court of Appeals held that McDonald's was not a joint employer of franchises in the San Francisco Bay Area and so could not be held liable for alleged wage and hour violations under California law. The restaurants' workers had sued the parent corporation, claiming they were denied overtime premiums and meal and rest breaks in violation of the California Labor Code. The 9th Circuit ruled that McDonald's was not a joint employer of the franchise employees because it did not exercise control over the workers' wages, hours or working conditions.

(SHRM Online)

Alleged Harassment Among Workers

The fast-food giant also faced scrutiny earlier this year after reports of widespread sexual harassment at various McDonald's locations surfaced. CEO Chris Kempczinski responded that the company will not tolerate sexual harassment. "Let me say plainly: every single person working under the arches must have a safe and respectful work environment," he wrote in a statement. "Sexual harassment in the workplace is an affront to everything we stand for as a system."


Former McDonald's CEO Fired for Romantic Relationship

In 2019, McDonald's fired then-CEO Steve Easterbrook after its board discovered that he had engaged in a romantic relationship that violated company policy. The company's standards of business conduct policy prohibits employees with a direct or indirect reporting relationship from dating or having a sexual relationship. "It is not appropriate to show favoritism or make business decisions based on emotions or friendships rather than on the best interests of the company," the policy states. "If you are either in a relationship or plan to enter into a relationship that may violate Company policies, you must advise your Human Resources Representative or Director immediately." Around the same time, the Time's Up Legal Defense Fund and the American Civil Liberties Union filed a class-action lawsuit alleging a "systemic" sexual-harassment problem at McDonald's.

(SHRM Online)

Resources on Workplace Harassment Prevention

The fight to end bullying and sexual harassment has changed the work environment. Here are some resources from the Society for Human Resource Management on preventing and stopping workplace harassment and bullying.

(SHRM Online)


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