The Case Study of Mcdonald

THE CASE STUDY OF MCDONALD’S
FOR THE UNFAIR LABOR PRACTICES
CLAIRE V. PAGLINAWAN BSBA-MM4

MM8(1:30-2:30PM) MWF
MR. JHUN VERIL

INSTRUCTOR
I.SUMMARY
McDonald’s is the global fast food leader, with more than 36,000
stores in 119 countries. The McDonald’s system also employs 1.9
million workers, making it the second largest private-sector employer
in the world.
McDonald’s low wages are a serious problem for its workers and for
taxpayers, but many McDonald’s workers do not even receive the wages
they are entitled to. Worldwide, McDonald’s and its franchisees have
repeatedly been found to have committed wage theft, which is the
illegal underpayment of wages that are rightfully owed to workers.
Intense pressure throughout the McDonald’s system to keep labor costs
low incentivizes store managers to underpay workers, violating
employment laws in the process. McDonald’s workers have reported
multiple wage theft practices, including being paid less than the
legally-mandated minimum wage, not being paid for all time worked,
receiving paychecks with improper deductions, and not receiving
legally-required overtime pay. In recent years, regulators around the
globe have found McDonald’s has engaged in illegal wage theft
practices. In 2009, McDonald’s in Brazil was found liable for
underpaying 13,000 workers over five years, a period of time which
included the handover of operations from McDonald’s to a master
franchise operator, Arcos Dourados. McDonald’s was ordered to pay back
wages totaling €33 million. Despite the franchising of its operations
in Brazil, as well as the entirety of Latin America and the Caribbean,
to Arcos Dourados, wage theft problems at McDonald’s stores persist.
Earlier this year, workers in Brazil filed two lawsuits against Arcos
Dourados, alleging both that it has continued to violate federal labor
laws and that these violations have allowed the company to illegally
undercut competitors and circumvent the country’s competition laws.In
the United States, workers filed seven class-action lawsuits against
McDonald’s in 2014, alleging wage theft violations at both corporate-
owned and franchised stores. In particular, they highlighted the
striking level of control exerted by McDonald’s, and the role that
corporate policies and systems played in encouraging and enabling wage
theft practices in McDonald’s stores in three states. These suits were
filed following the release of a poll of U.S. fast food workers
showing that 84 percent of McDonald’s workers surveyed experienced at
least one form of wage theft.
McDonald’s has been a major union opponent for decades. In the late
1960s and 1970s, McDonald’s had a “flying squad” of experienced
McDonald’s store managers who were dispatched the same day that word
came in of an attempt to organize a union. Since then, McDonald’s has
engaged in a number of specific business and labor relations
strategies that undercut workers’ rights and disregard international
standards.
II. STATEMENT OF THE PROBLEM
Wage Theft
In addition to setting the standard for low wages, McDonald’s and

its franchisees have been found guilty of stealing workers wages in
Europe, Latin America, and other regions, paying millions in fines and
penalties as a result.
Anti-Union Practices
McDonald’s has refused to negotiate with workers who have

organized to demand improved working conditions, retaliated against
workers for organizing activity, and evaded responsibility for
workplace standards at franchised stores.
III. OBJECTIVE
To be able to know
IV. ALTERNATIVE COURSE OF ACTION
McDonald’s should take responsibility for creating high quality

jobs that pay living wages and treat its workers fairly.
V. FINDINGS, CONCLUSION AND RECOMMENDATIONS
McDonald’s management should immediately meet with its workers

around the world and the labor unions and other worker organizations
they have formed to address the numerous workplace problems detailed
in this report. McDonald’s should commit to raising standards at all
of its stores, including those operated by franchisees, and negotiate
a plan to offer high-road, family supporting jobs to all McDonald’s
workers.
Given its scale and prominence, McDonald’s should take responsibility for creating high quality jobs that
pay living wages and treat its workers fairly. Instead, the company has adopted a low-road employment
strategy, becoming a leader in the development of low-wage, precarious service jobs around the globe

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THE CASE STUDY OF MCDONALD’S

FOR THE UNFAIR LABOR PRACTICES

CLAIRE V. PAGLINAWAN BSBA-MM4

MR. JHUN VERIL

II. STATEMENT OF THE PROBLEM

In addition to setting the standard for low wages, McDonald’s and

McDonald’s has refused to negotiate with workers who have

IV. ALTERNATIVE COURSE OF ACTION

McDonald’s should take responsibility for creating high quality

McDonald’s management should immediately meet with its workers

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