By Karla Walter
Patrick T. Fallon/Bloomberg
Work stinks for too many Americans laboring in the fast-food industry: wage theft is rampant, women confront sexual harassment in the industry, and when workers protest poor work conditions, they often report being fired or otherwise retaliated against.
Unfortunately, fast-food workers will have an even tougher time holding corporate giants that control workplace standards in the industry accountable if a bipartisan group of senators have their way .
For more than 80 years, existing federal workplace laws have helped ensure that corporations that control workplace standards cannot escape accountability for their own violations by relying on smaller companies — including franchisees — to supply their labor force.
These joint-employment protections recognize that a corporation may relinquish the official title of employer, but not control over their labor suppliers’ basic business decisions or workplace conditions.
Lets corporations off the hook
However, the innocuously named Trademark Licensing Protection Act would significantly weaken these joint-employer protections in franchise establishments — letting large corporations off the hook when they infringe on workers’ rights guaranteed under federal minimum wage, child labor and collective bargaining laws.
As a result, smaller franchises would be solely liable for any workplace misdeeds and workers would be left unprotected.
Historically, franchising represented an arm’s length contracting agreement. But today, many industry giants control almost every aspect of a fast-food franchisee’s business. Operations manuals dictating the behavior of individual franchise restaurants stretch hundreds of pages--prescribing workers’ training and appearance requirements, approved suppliers, participation in advertising promotions, and required computer systems.
Corporate franchisors can also monitor franchise compliance through their computerized bookkeeping and scheduling systems, as well as corporate business consultants, specifically hired to monitor restaurant owners. Sometimes franchisors even act as landlord — with one report finding that this can allow the corporations to j ack up property rent over industry averages.
Cheated out of their wages
Of course, it is important for franchisors to control brand quality, but corporations may also use franchise contracts and ongoing interactions to indirectly control restaurant workers, which can result in fast-food workers being cheated out of wages and deprived of their rights.
According to New York University’s Andrew Elmdore , “Since franchisors aggressively police nearly all cost variables, suppressing employee wages is one of the few ways that franchisees can boost store profit by cutting costs.”
Indeed, a review conducted by Bloomberg found at least one violation of the federal wage standard law in three-quarters of all investigations of fast-food restaurants conducted by the Department of Labor during the Obama administration. All totaled, these 4,000 investigations resulted in the recovery of $14 million in back wages for 57,000 workers.
Unfortunately, this lawlessness doesn’t just extend to wage protections.
Last year, fast food workers in 10 cities participated in a day-long #MeToo strike to protest sexual harassment that they say has long gone unchecked. Over the past several years fast-food workers have filed multiple complaints about being threatened, retaliated against, and even fired for asserting their rights to come together with their co-workers to protest for higher pay, better work conditions and a union.
In order to uphold higher standards, the Obama administration adopted reforms to improve oversight of corporations that violated federal wage and collective-bargaining protections. These reforms not only helped ensure that joint-employer protections were being enforced, but also encouraged corporations to take their role in encouraging compliance seriously.
For example, in July 2016, the restaurant chain Subway entered into a voluntary agreement with the DOL to improve minimum-wage compliance across its 27,000 franchises. In the three years prior, the DOL had required Subway franchises to pay more than $2 million in back wages for 6,000 workers.
Strong job growth
While lobbyists claimed that the Obama-era reforms would harm industry growth, the industry continued to expand in the years following their adoption. Indeed, employment growth in the industry outpaced overall private-sector employment growth.
Yet the Trademark Licensing Protection Act is part of a much larger effort by corporate lobbyists, emboldened by the Trump administration, to all but do away with joint-employer protections.
Trump appointees at the Department of Labor and National Labor Relations Board are pursuing rule makings that significantly weaken the ability of workers across all industries to hold large corporations accountable for workplace violations. Similar measures are being adopted at the state level.
Lobbyists claim that the Trademark Protection Act will simply clarify corporate franchisors’ responsibilities under the law, but pro-worker policy makers should not be fooled — the bill is just the latest attempt to roll back American workers’ rights on the job.
Karla Walter is the director of employment policy at the Center for American Progress, an independent, nonpartisan, and progressive think tank.