By
A group of shareholders in fast-food chains McDonald’s and Wendy’s are demanding the companies’ boards of directors do more to ensure franchisees are not exploiting child labor or labor by incarcerated people.
In separate letters to the boards at the two restaurant chains, the investors reference The Washington Post reporting on child labor at McDonald’s and Wendy’s franchises as the reason for leadership to take urgent action. In essence, the investors argue that news coverage and increased public scrutiny of possible labor violations threaten the companies’ bottom lines. Both letters were coordinated by the SOC Investment Group, an organization that manages union pensions.
The McDonald’s investors say they represent over $2.2 trillion in assets. Their letter highlights that McDonald’s has had more than 2,300 child labor violations at more than 13,000 restaurants since 2013, according to the Post’s reporting. And though these took place at franchised restaurants rather than corporate-owned ones, they say the board is responsible for a “lack of oversight” that “exposes shareholders to reputational and legal risks associated with repeated violations of child labor law.”
The letter demands the board institute a zero-tolerance policy with regard to child labor at franchises, that it empower an internal committee to oversee human rights issues, and that an independent human rights review of franchisees be released in December.
The letter sent to Wendy’s is very similar. The group of investors claim to represent $429.5 million in assets, and their letter also cites the Washington Post investigation, which found that Wendy’s franchises have had some of the most child labor violations per restaurant in the fast food industry since 2020. Citing Labor Department data, the Post found that Wendy’s franchises averaged nine violations per 100 restaurants, placing it among the top ten fast-food chains.
The Wendy's investors' demands are nearly identical to those in the McDonald’s letter, including the release of an independent report, but with the addition of annual progress reports thereafter.
Both letters cite an Alabama lawsuit, which names Wendy’s and McDonald’s restaurants among hundreds of employers allegedly relying on prison labor, to express concern that the respective boards are failing to “mitigate risks to the Company’s reputation.”
Neither company immediately responded to MSNBC's request for comment. The Washington Post notes that in response to similar letters sent last year:
In a previous statement to The Post, the company said the child-labor violations don’t reflect the experience of most teenagers working in 'age-appropriate roles and looking for meaningful jobs in their local communities.'
At least the companies' investors are showing some self-awareness: They understand that press coverage of the problems they mention in their letters is bad for business. Indeed, child labor has come into focus because of harrowing stories like those covered in the Post, but this issue is also in the news because conservative officials nationwide have been rolling back child labor regulations.
So it’s smart business, morally just and politically prudent to want to disassociate one’s company from the exploitative practices laid out in these letters.