With more than 18,000 restaurants located around the world, McDonald’s has established itself over the years as the largest global fast-food chain. But it has done something else in that time. According to a lawsuit by labor groups, the restaurant chain has been violating Brazilian labor law for the past three decades.
Three of Brazil’s largest trade unions are among the nine organizations that claim McDonald’s, and its largest Brazil-based franchise Arcos Dorados, pay substandard wages, employ underage staff, and fail to pay overtime, The Guardian reports. Plaintiffs in the McDonald’s lawsuit also claim that the franchise exposed workers to unsanitary working conditions and required workers to work variable schedules, a practice not permitted by Brazilian labor laws.
Moacyr Roberto Tesch Auersvald, president of the tourism and hospitality workers’ union Contratuh, laid out the claims at a recent press conference in São Paulo. “McDonald’s turns a blind eye to Brazilian laws to ensure greater business profit, gaining an unfair advantage for itself over companies that respect the rule of the law.”
Until the company complies with Brazilian law, the labor groups say that McDonald’s should be prohibited from opening any new restaurants in the country. The lawsuit also asks that the fast food company pay penalties up to 30 percent of its revenue in Brazil, according to The Associated Press.
Arcos Dorados says that it has not been notified of the lawsuit and that all of its labor practices conform to Brazilian legislation. McDonald’s corporate headquarters issued a statement that echoed its franchisee’s comments, saying, “the company’s employees are registered in accordance with legislation and receive remuneration and benefits in line with the collective agreements signed with the country’s respective unions.” The Guardian notes that in recent years, McDonald’s has been cited in nearly 400 labor lawsuits alleging variable work patterns that conflict with Brazilian work scheduling requirements.
The McDonald’s brand is American. But its imprint on the economy of Brazil is unmistakable. The Guardian reports that the sales in Brazil account for nearly half of McDonald’s total revenue in Latin America. McDonald’s economic clout is also reflected in its representation in Brazil’s workforce. The restaurant chain’s 42,000 employees working in 850 restaurants make it one of the country’s largest employers. McDonald’s will have an opportunity to respond and fully present its side of the dispute. When that happens, a company and a work culture that was born in America will need to fully account for its practices under Brazilian law.
