Corporate owners of fast-food restaurants have typically been off the hook for labor violations at their franchised outlets. Workers have had to seek redress from the franchisees who own their individual restaurants. Those franchisees are the direct employers of many of the nation’s more than 3.3 million fast-food workers, an arrangement that shields the multibillion dollar parent corporations from liability. A first-of-its-kind bill in the California Legislature would hold all corporate chains legally responsible, jointly with franchisees, for labor violations at their outlets, if those violations are not soon corrected.
The California Chamber of Commerce has joined the fast food industry in a lobbying campaign against the bill, which they warn will upend the franchising business model. That model has allowed global companies to access capital from a broad cross section of entrepreneurs while insulating themselves from labor issues, as well as other risks associated with operating a brick and mortar business.
