Fast Food News – February 5th
This post is part of an ongoing of series on the fast food organizing movement. You can read all our Fast Food News here.
The Wall Street Journal reports that McDonald’s Chief Executive Don Thompson will step down as president and CEO, less than three years into his tenure. Steve Easterbrook, who is currently McDonald’s chief global brand officer, will replace Mr. Thompson on March 1, 2015. Mr. Thompson’s resignation comes after two years of steep declines in sales and growing labor unrest within the fast food industry focused on McDonald’s in particular. Mr. Easterbrook will take the reins in the midst of continued competition from fast-casual chains such as Shake Shack and Chipotle, while also dealing with the implications of the National Labor Relations Board classifying McDonald’s as a joint employer, a decision which could completely alter McDonald’s franchising arrangements.
McDonald’s has recently been criticized for it’s latest marketing campaign according to Bryce Covert at The Nation. In an advertisement aired during the Super Bowl, McDonald’s announced that it would be randomly selecting customers who will get their food and drink for the price of “lovin.’” The Nation notes that while McDonald’s workers continue to be paid at just above the minimum wage, Covert argues that they are being asked to go beyond their job descriptions and veer into “emotional labor” by being required to put on an act for customers. Further, Covert argues that ‘pay with lovin’’ could lead to sexual harassment issues, a claim that the company has recently been sued over in Virginia.
Shake Shack’s successful public offering could have broad implications for fast food wages according to the BBC. Shake Shack, as well as other “fast casual” chains, have been particularly successful with millennial consumers, who have shown a willingness to pay a premium for food from chains that are viewed as being more “ethical.” An example of this is with wages, as Shake Shack has a minimum starting salary of $10 an hour in New York City, higher than the minimum wage for the State. Shake Shack believes that higher pay leads to higher quality employees and better service overall, which enhances profitability. However, the Huffington Post notes that Shake Shack does charge more for its product, does not currently franchise, and has yet to grapple with the potential challenges of being a public company. Still, according to HuffPo, if Shake Shack is able to maintain higher wages as part of reaching its long-term goals, it could lead to a shift in how all fast food and fast-casual restaurants choose to pay workers.
The New York Post reports that a New York judge has ordered a Papa John’s franchisee to pay nearly $800,000 over allegations that the operator underpaid employees and didn’t pay overtime. New York Attorney General Eric Schneiderman sued the franchisee, Emstar Pizza Inc, for underreporting hours and failing to pay overtime over a six-year period. The Post also claims that Schneiderman is currently considering charging the franchisor, Papa John’s International Inc. as well, which would likely rely on the National Labor Relations Board’s recent decision to consider McDonald’s Corp. a joint employer of workers employed by franchisees.
Governor Andrew Cuomo announced that New York State recovered $30.2 million in wage theft cases for 2014, which Bloomberg Law reports is a record-level total and 35 percent higher than the previous year. This $30.2 million was distributed amongst 27,000 workers statewide who weren’t paid the proper minimum wage, overtime or fringe benefits. New York City led the State, with $18.8 million distributed to 13,921 workers, for an average payout of $1,350 according to the New York State Department of Labor.