Resolved: That the board of directors report to shareholders, at reasonable cost and omitting proprietary information, on actions the company is taking to protect employees from sexual harassment in its branded and franchised operations. This report should include the measures taken to support franchisees in adopting best practices and creating a positive workplace culture and key workforce targets and metrics. This will allow shareholders to assess the effectiveness of the company’s oversight and policies in both corporate-owned and franchised restaurants.

Supporting Statement:

According to a 2019 report by Hart Research, forty percent of women in the fast-food industry report experiencing unwanted sexual attention on the job. Since the #MeToo movement gained public attention, companies with a large employment footprint like McDonald’s are under greater scrutiny. The failure to establish an effective mechanism of accountability through the implementation and the enforcement of anti-sexual harassment policies and practices exposes companies to significant legal, reputational and operational risks.  

McDonald’s has dominated the #MeToo debate within the industry. In 2020 alone, media reported extensively on several issues with McDonald’s workforce. In one instance, employees filed a $500 million class alleging a “systemic sexual harassment problem.” Another complaint filed by an international coalition of labour unions at the Organization for Economic Cooperation and Development’s offices in the Netherlands alleges that gender-based violence and harassment are part of McDonald’s culture. That complaint details a pattern of sexual harassment and violence in the United States, the United Kingdom, France, Australia and many other countries. These cases add to numerous complaints filed at the United States Equal Employment Opportunity Commission. Employees and media report a “culture of sexual harassment” that is “pervasive” and which “creates and permits a toxic culture from the very top.”

Yet, the company’s efforts to address this issue remain insufficient. For instance, the steps taken by McDonald’s fail to cover its franchise operations. Franchisees employ the vast majority of McDonald’s workers. Franchise operations make up more than 90 percent of McDonald’s restaurants. Within a franchise operating model, the company’s success and reputation depend on a highly engaged, customer-facing workforce and strong franchisor-franchisee relationships. Franchisees have a direct employment relationship and related responsibilities for the workforce. However, McDonald’s, as a company, is responsible for providing standards and expectations of human capital management and the collaboration required to uphold strong workplace standards, including supportive training, development, and appropriate financial arrangements.

Establishing minimum requirements and standards for McDonald’s branded operations, including franchisees, and supporting franchisees’ capacity to protect their employees, would help the company mitigate these reputational and legal risks. Ultimately, these steps would also help ensure that the conditions are in place to deliver high customer service and productivity levels across all McDonald’s operations.

We urge you to support this resolution.