McDonald’s (MCD) franchise owners could be on the hook for unlimited fines in the U.K. if they fail to protect their staff from sexual abuse.
Slurs and Harassement
Following an investigation by the BBC, the U.K.’s equality watchdog – Equality and Human Rights Commission – has written to all 1,400 Golden Arches branches in Britain telling their owners that they must comply with their legal duties or risk enforcement action. This could lead to the ultimate sanction of unlimited fines.
The BBC found that despite assertions from McDonald’s that it was committed to ensuring safe working environments, abuse was still taking place. This included “homophobic slurs” and inappropriate touching.
In February 2023 the watchdog entered into a legal agreement with McDonald’s to prevent sexual harassment at its sites. However, most McDonald’s restaurants are run by franchises and weren’t part of that agreement.
Range of Enforcement Powers
That has now changed with the EHRC declaring that all businesses must comply. According to the BBC the letter sets out reasonable steps to be taken including regular risk assessments and safeguarding procedures.
The EHRC has a range of statutory enforcement powers open to it, including the ability to launch formal investigations. It can also take a business to court where an unlimited fine could be issued.
EHRC head John Kirkpatrick told the BBC that the letter was a “starting point.” “If it’s not proving successful, we can investigate further. If we can find legal robust evidence of breaches of the law then we can impose an action plan on them and if they don’t follow that, a court can impose fines on them,” he said.
McDonald’s shares were down in early trading.
Is MCD a Good Stock to Buy Now?
On TipRanks, MCD has a Moderate Buy consensus based on 14 Buy and 10 Hold ratings. Its highest price target is $360. MCD stock’s consensus price target is $327.52 implying an 9.94% upside.
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