Dive Brief:

• Three Black McDonald's employees filed an anti-discrimination lawsuit against the chain in the U.S. District Court for the Central District of Illinois on Tuesday. The plaintiffs, who worked at a Rock Island, Illinois restaurant, claim that the location's general manager called Black employees and diners "ghetto" and that other workers referred to Black employees as "smelly" or "lazy." The plaintiffs also claim that Black employees were granted fewer work hours than non-Black employees, and that when plaintiff Stephanie Stevens approached management about discriminator language used toward plaintiff Selynda Middlebrook, Stevens was fired immediately.
• The employees are also suing franchisee Gendco Inc., which is named as a joint employer in the case. Trina Gendron, the McDonald’s franchisee, told Nation's Restaurant News, "I am deeply committed to running a values-led organization, and discrimination, harassment or retaliation of any kind are not tolerated in my restaurants. I take these allegations seriously and am currently reviewing the complaint and investigating these allegations." McDonald's did not respond to Restaurant Dive's request for comment before press time.
• This case is the latest in a series of discrimination lawsuits slapped against the Golden Arches just this year. In August 52 Black ex-franchisees sued the chain for allegedly "steering Plaintiffs to locations with low-volume sales and higher operating costs, such as higher security costs due to crime, higher insurance rates, and higher employee turnover" — charges McDonald's denied. A suit in January also accused the company of pushing Black executives from senior leadership under former CEO Steve Easterbrook and current CEO Chris Kempczinski, as well as forcing Black operators out of the system. 

Dive Insight:

This lawsuit adds to a growing snowball of allegations of racism and discrimination at McDonald's. For years the chain has been accused of allowing toxic workplace culture to thrive at both the corporate and store level, and though the mega chain has denied these accounts, allegations continue to pummel the brand's image. 

"The top-down systemic racism evident in McDonald's C-suite, as evidenced by recent allegations by Black executives and Black franchisees, reaches down to the restaurant level, where individual managers and franchisees are not held accountable for engaging in, and failing to prevent, discrimination on the basis of race," the Tuesday complaint states.

This lawsuit's attempt to hold McDonald's responsible for the Rock Island franchisee's alleged discrimination as a joint employer also resurfaces issues from a previous case. 

In December, McDonald's scored a major labor win when the National Labor Relations Board absolved the chain as a joint employer from responsibility for labor violations brought forward eight years prior by Fight for $15 and other labor organizations. The ruling suggested that in the future, restaurants would not have to pay for their franchisee's illegal activities because those operators would be dealt with as entities independent of the corporate restaurant parent. This was a huge boon for restaurant chains, but took away even more power from labor groups. The NLRB then clarified the joint employer rule in February, insulating franchisors from being put on the hook for labor infractions committed by their franchisees. 

But last month, the House Committee on Education and Labor subpoenaed the NLRB for alleged ethical violations involving the December ruling, and is also investigating the agency's decision to narrow the joint employer rule in February. NLRB board member William Emanuel is at the center of both investigations.

Emanuel was asked not to participate in the McDonald's case from December because he worked for a law firm that helped McDonald's operators seeking legal assistance in response to employee protests, but still participated in the process — violating an executive order that bars board members from being involved in decisions "directly and substantially related" to former employers or clients. Emanuel also participated when the NLRB clarified the joint employer rule. 

In September, the U.S. District Court for the Southern District of New York also held that the latest final joint employer rule conflicted with the Fair Labor Standards Act and was "arbitrary and capricious" because the Department of Labor "failed to adequately justify its departure from its prior interpretations" and didn't account for the impact of the rule on workers.

If the McDonald's December ruling and the updated joint employer definition processes are found to be unethical, it could mean that McDonald's will be on the hook for the consequences of this lawsuit — as well as future ones. The implications for the chain are significant, as 95% of McDonald's U.S. system is franchised.