Specific Instance between International Union of Food, Agriculture, Hotel, Restaurant, Catering, Tobacco, and Allied Workers Associations (IUF), European Federation of Food, Agriculture and Tourism (EFFAT), Service Employees International Union (SEIU), Unión General de Trabalhadores (UGT) and McDonald’s Corporation

Overview of the NCP and Its Role

The OECD Guidelines for Multinational Enterprises (the Guidelines)[1] are voluntary, non-binding recommendations for responsible business conduct in a global context. In the Guidelines, adhering governments, of which there are currently fifty, provide guidance to multinational enterprises operating in or from their territories. Adhering governments have committed to a) encouraging their multinational enterprises to follow the Guidelines in their global operations, and b) appointing a National Contact Point (NCP) to assist parties in seeking a consensual resolution to issues that may arise under the Guidelines.

As a part of its function, the U.S. NCP can help to resolve issues related to implementation of the Guidelines, arising from the business conduct of a multinational enterprise in specific instances. Generally, such issues are dealt with by the NCP of the country in which the issues have arisen. The U.S. NCP handles such issues in accordance with procedures described in the U.S. NCP Guide.[2] Further background on the Specific Instance process and the procedures and policies of the U.S. NCP can be found at the website of the U.S. NCP.[3]

Executive Summary

This Final Statement concludes one part of the Specific Instance originally submitted to the Dutch NCP on May 18, 2020, by the International Union of Food, Agriculture, Hotel, Restaurant, Catering, Tobacco, and Allied Workers Associations (IUF), the European Federation of Food, Agriculture and Tourism (EFFAT), the Service Employees International Union (SEIU), and the Unión General de Trabalhadores (UGT) (collectively, the submitters). The Specific Instance alleged conduct inconsistent with the Guidelines regarding gender-based violence and harassment (GBVH) in the global operations of Chicago-headquartered multinational food service company McDonald’s Corporation (collectively with its wholly-owned subsidiaries, McDonald’s, or the company).

The original Specific Instance addressed three multinational enterprises. This Final Statement deals with the part that was addressed to McDonald’s; the other two parts of the original Specific Instance, addressing two institutional investors in McDonald’s, have been handled separately by the Dutch and Norwegian NCPs.

The U.S. NCP accepted the Specific Instance for further examination and offered mediation on the issues raised by the submitters, but mediation could not be established because, following a series of preliminary discussions with each party, separately, the company declined to participate in mediation through the office of the U.S. NCP.

Recommendations

The U.S. NCP recommends that the company pay particular attention to the following recommendations from the Guidelines, with regard to allegations of GBVH in McDonald’s-brand restaurants:
- that enterprises “respect human rights, which means they should avoid infringing on the human rights of others,” that enterprises “within the context of their own activities, avoid causing or contributing to adverse human rights impacts and address such impacts when they occur,” that enterprises “seek ways to prevent or mitigate adverse human rights impacts that are directly linked to their business operations, products or services by a business relationship,” and that enterprises “carry out human rights due diligence as appropriate to their size, the nature and context of operations and the severity of the risks of adverse human rights impacts.”[4]
- that enterprises “promote consultation and co-operation between employers and workers and their representatives on matters of mutual concern,” and that enterprises “take adequate steps to ensure occupational health and safety in their operations.”[5]
Both parties should provide information to the U.S. NCP on the issues raised in this Specific Instance, as discussed below, one year after the date that the company declined to participate in mediation, so the U.S. NCP may, as appropriate, issue a follow-up report as an addendum to this Final Statement.

Submission of the Specific Instance, and Coordination among NCPs

The submitters are three international trade unions and one national union; the IUF is a global union federation, the EFFAT is the European regional organization of the IUF, the SIEU is a U.S. and Canadian trade union, and the UGT is a Brazilian trade union center. Their member unions represent workers in a variety of workplaces, including fast-food restaurants, and some member unions of the IUF, EFFAT, and UGT represent employees at some McDonald’s-brand restaurants.

As a note on terminology, this Statement uses the phrase “McDonald’s-brand restaurants” to include, consistent with the scope of the submission, all 40,000 restaurants operating under a McDonald’s brand, whether they are owned and operated by McDonald’s or by another, independent entity or person such as a franchisee or developmental licensee (as is most commonly the case). The U.S. NCP recognizes, however, that while the official commentary on the Guidelines states that an enterprise can influence others through “license or franchise agreements,”[6] the Guidelines may recommend different courses of action for the company in different ownership situations (i.e., whether a particular restaurant is owned and operated by the company, or it is owned and operated by an independent franchisee or developmental licensee of the company), depending on whether the company caused, contributed to, or is directly linked to an adverse impact.[7]

On May 18, 2020, the submitters submitted a Specific Instance to the Dutch NCP, and on January 28, 2021, they followed it with a “Supplemental Specific Instance,” in response to questions from the Dutch and Norwegian NCPs. They alleged conduct inconsistent with Chapters II (General Policies), IV (Human Rights), and V (Employment and Industrial Relations) of the Guidelines on the parts of McDonald’s, Dutch pension investment management company APG Asset Management NV (APG), and Norwegian sovereign wealth fund manager Norges Bank Investment Management (NBIM). The submission concerned GBVH in the global operations of McDonald’s, and related due diligence obligations by APG and NBIM as institutional investors in McDonald’s. More precisely, the submitters alleged conduct inconsistent with Chapters IV and V on the part of McDonald’s, and Chapters II and IV on the part of the two institutional investors. Under Chapter IV, the submitters alleged behavior inconsistent with the responsibilities of an enterprise to: respect human rights (IV.1), avoid causing or contributing to adverse human rights impacts (IV.2), and seek ways to prevent or mitigate adverse impacts directly linked to their business operations by a business relationship (IV.3).

The submitters requested that the Dutch NCP handle the Specific Instance because, they said, the Dutch NCP was “best positioned to assist … in a mediation process to address the GBVH crisis in McDonald’s in Europe and worldwide,” and because APG is a Dutch enterprise. They further stated that, in their view, the U.S. NCP was not “in a position to adequately handle this case.” The submitters also stated that they were not submitting the Specific Instance to the U.S. NCP because of their belief that “hoping that McDonald’s U.S. management would be open to an offer of mediation would be an exercise in futility.”

Between June and October 2020, the Dutch, Norwegian, and U.S. NCPs conferred to coordinate how to handle the Specific Instance, consistent with relevant OECD guidance. They agreed that the U.S. NCP would handle the elements of this Specific Instance concerning McDonald’s with a strong supportive role for the Dutch NCP, while the Dutch NCP would lead with respect to APG, and the Norwegian NCP would lead with respect to NBIM, with the Dutch and Norwegian NCPs coordinating closely regarding the issues concerning the two investors. They also informed the NCPs of six other states in which the Specific Instance alleged GBVH in McDonald’s-brand restaurants: Australia, Brazil, Chile, Colombia, France, and the United Kingdom. This decision was communicated first to the submitters, and then, on January 8, 2021, to McDonald’s, APG, and NBIM.

Consistent with this decision, the U.S., Dutch and Norwegian NCPs have handled in parallel the parts of the original Specific Instance with respect to McDonald’s, APG, and NBIM, respectively.

The Dutch NCP offered mediation to the submitters and APG in its Initial Assessment of May 20, 2021.[8] As described in the Dutch NCP’s Final Statement, issued on February 3, 2022, those parties accepted the offer, and through mediation they reached an agreement that is annexed to that Final Statement.[9]

The Norwegian NCP offered mediation to the submitters and NBIM in its Initial Assessment of June 21, 2021,[10] and currently continues to handle that part of the original Specific Instance.

The U.S., Dutch, and Norwegian NCPs have continued to coordinate as necessary. The U.S. NCP thanks its international counterparts for their coordination throughout the handling of this Specific Instance.

Substance of the Specific Instance, and Response

Following the original Specific Instance of May 18, 2020 and the “Supplemental Specific Instance” of January 28, 2021, the company submitted its initial response on April 16, 2021. The submitters responded on May 19, 2021, and the company provided its further response on June 30, 2021. On July 11, 2021, the submitters stated that they would have no further reply.

The submitters describe their complaint as “the first-ever Specific Instance taking aim at systematic sexual harassment at a multinational enterprise.” In lengthy and detailed submissions,[11] they asserted that “gender-based violence and harassment plague McDonald’s workers around the world.” This is, they asserted, “part of an overall crisis in the fast-food industry generally,” citing the conclusions of a 2016 Hart Research survey that 40% of women in the U.S. fast-food industry had experienced sexual harassment at work. The submitters characterized this issue as part of an even more widespread problem in workplaces generally, pointing to studies concluding that 40% to 50% of women in the European Union reported experiencing some form of sexual harassment or unwanted sexual behavior in the workplace. They also note recent developments that have increased the attention on the problem of GBVH, including the #MeToo movement and the adoption of ILO Convention 190 on the elimination of violence and harassment in the world of work. They stated that their goal was “to jointly create a plan and program to address GBVH in McDonald’s stores.”

To support their assertion about the company, the submitters pointed to a number of alleged incidents in several countries, such as those described below. They provided significant detail of several of the alleged incidents, with citations to supporting documentation and quotations from alleged victims.

In the United States, several lawsuits, Equal Employment Opportunity Commission complaints, and EEOC consent decrees involved claims of sexual harassment in McDonald’s-brand restaurants—some of them company-owned, and some franchisee-owned—in states including Colorado, Florida, Michigan, New Mexico, and Wisconsin, with twelve other states listed in supplementary documentation. Many of the alleged victims were girls between the ages of 15 and 17.
In Brazil, the public prosecutor cited 23 complaints of sexual harassment filed by workers at McDonald’s-brand restaurants across the country.
In France, complaints alleged sexual harassment in McDonald’s-brand restaurants in three locations across the country.
In the UK, a survey conducted by union campaigners allegedly found more than 1,000 reports of sexual abuse and harassment experienced by workers at McDonald’s-brand restaurants.
In Colombia, the submitters asserted that researchers “identified at least fifteen cases of sexual harassment claims against McDonald’s.”

The company submitted an extensive written response, in which it expressed its commitment to respect human rights, including “an unwavering commitment to safe, inclusive and respectful workplaces for everyone working under the Arches,” stated that it had established a worldwide human rights policy in 2018 as well as global principles against harassment, discrimination, retaliation, and workplace violence in 2020, and described a thorough human rights due diligence program, including implementing reporting mechanisms, training, and stakeholder engagement.

The company further stated that it had recently (as of April 2021) issued “Global Brand Standards,” effective January 1, 2022 and applicable to all McDonald’s-brand restaurants worldwide. Specifically, it stated, all McDonald’s-brand restaurants are required to have procedures in place for reporting claims of harassment, as well as policy and training established to prevent harassment and discrimination; procedures in place for incident reporting, as well as policy and training established to mitigate the risk of violence in the workplace; at least one crew and manager survey completed each year in each restaurant, with an accompanying action plan; and annual health and safety audits with action plans to reinforce a culture of safety. Implementation of these standards is supported by a suite of policies, tools, trainings, and reporting mechanisms.

On the specific topic at hand, the company noted that the complaint focused on issues involved in parallel legal proceedings, which it asserted were inappropriate for mediation. It also stated that “Gender-based violence and harassment has no place in any McDonald’s restaurant, and it will not be tolerated.” It said that in the United States and other “wholly-owned markets” such as Australia, France, and the UK, it had adopted policies and training programs for company-owned restaurants, and encouraged its franchisees to adopt similar policies and programs, including by providing consulting services and tools to its franchisees. For example, with respect to company-owned restaurants in the United States, the company stated that it has worked with the nonprofit RAINN (Rape, Abuse & Incest National Network), the nation’s largest anti-sexual violence organization, to update its policies related to harassment, discrimination, retaliation, and GBVH; it has instituted workplace training, including interactive exercises, to educate on and prevent and mitigate GBVH; and it has mechanisms for reporting concerns, including 24/7 hotlines that allow anonymous reporting. The company described similar mechanisms in Australia, France, and the UK. In other “developmental licensee” markets, the company itself “has no operations or presence,” but provides consulting services, tools, and resources relevant to addressing GBVH. The company also described relevant actions, programs, and trainings under way in those markets designed to prevent and enhance protections against GBVH, including an ethics committee, ethics line, and diversity committee.

One point on confidentiality rules is worth noting. The company also asserted that the submitters, as part of broader effort directed at McDonald’s, acted “in violation of OECD rules on confidentiality” as well as demonstrating unwillingness “to comply with the confidentiality and procedural rules … of the U.S. NCP,” by publicizing the Specific Instance when it was filed (and well before the company had any opportunity to see the submission). This assertion cites a press release, issued the day after the four labor unions had submitted their Specific Instance to the Dutch NCP, announcing that they had done so.[12] This assertion misunderstands both OECD and U.S. NCP rules on confidentiality—even setting aside the additional issue that the U.S. NCP’s confidentiality rules did not apply at the time of the cited press release, before the Specific Instance was partially reassigned from the Dutch NCP to the U.S. one. While both OECD and U.S. guidelines generally promote confidentiality, particularly if a Specific Instance is under mediation, they do not bar publicizing the existence of a Specific Instance. Contrary to the statement that the cited press release violated an OECD rule, OECD guidance acknowledges that NCPs may take a range of approaches to confidentiality.[13] While the confidentiality guidelines of the U.S. NCP state an expectation that parties will “strictly respect the confidentiality of all communications with other parties and with the U.S. NCP,” they only raise some caution regarding publicizing the existence of a Specific Instance: “the U.S. NCP has no objection to parties informing the public that a Specific Instance has been submitted, though the U.S. NCP does recommend that parties consider whether such an announcement and the way in which it is made might affect the likelihood of successful mediation, if mediation is offered.”[14]

Initial Assessment

After thorough review of information provided by both parties, the U.S. NCP determined that the issues raised by the submitters merit further examination, and thus decided to accept the Specific Instance. Accordingly, on September 2, 2021, the U.S. NCP sent an Initial Assessment document to the parties, offering mediation services to assist the parties in undertaking a dialogue to seek a mutually agreed resolution of issues raised by the submitters.

Acceptance of the Specific Instance was in no way an acknowledgement of or determination on the merits of the issues raised by submitters, but merely an offer to facilitate neutral, third-party mediation or conciliation to assist the parties in voluntarily, confidentially, and in good faith, reaching a cooperative resolution of their concerns.

The U.S. NCP made this decision based on the Guidelines, and in consideration of the OECD’s guidance on initial assessments.[15] In particular, according to the Commentary on the Implementation Procedures, an initial assessment involves determining “whether the issue is bona fide and relevant to the implementation of the Guidelines,” taking into account the following criteria:[16]

a. The identity of the party concerned and its interest in the matter

The U.S. NCP was satisfied that the submitters provided sufficient information regarding their interest in the issues raised. IUF, EFFAT, SEIU, and UGT are service-sector union organizations with interest in the matters raised in their submissions. As local and global trade union organizations, the submitters were acting in the broader interest of trade unions and workers’ rights, and the U.S. NCP viewed the submitters to have a legitimate interest in the issues raised.

b. Whether the issue is material and substantiated

The submitters provided information in the form of letters and annexes in their submission alleging the company’s business relationship with its franchisee and licensee restaurants. The complaint and supplemental submissions contain extensive information relating to alleged GBVH at McDonald’s branded restaurants worldwide in the past decade. While the initial assessment did not involve any factual findings or determination on the merits of the allegations, the U.S. NCP viewed the issues raised as material and substantiated sufficiently for the purposes of its initial assessment.

c. Whether there seems to be a link between the enterprise’s activities and issues raised in the specific instance

There is a plausible link between the company’s activities, its global brand and various markets, and the issues raised.

The Guidelines state that that they “are addressed to all the entities within the multinational enterprise (parent companies and/or local entities).”[17] As such, the recommendations of the Guidelines apply to all entities of a corporate group.[18] The Guidelines further provide that enterprises should “[s]eek to prevent or mitigate an adverse impact where they have not contributed to that impact, when the impact is nevertheless directly linked to their operations, products or services by a business relationship.”[19] As the OECD guidance on initial assessment states, if “complex corporate structures make it unclear which entity has caused the harm or issues raised, entities within the same corporate group would likely, at the very least, be directly linked to an adverse impact caused by one part of the group through their business relationship.”[20]

d. The relevance of applicable law and procedures, including court rulings

The U.S. NCP was not aware of any applicable law or procedures that would weigh against offering its mediation service in this case. Both parties noted that cases in courts and administrative tribunals related to several individuals in the United States and other countries are concluded or ongoing in the matter. The U.S. NCP believed that its offer of mediation would not have any significant effect on processes that are underway—again, while making no determination on the merits related to any such processes.

According to the Commentary accompanying the Guidelines, parallel proceedings do not preclude an NCP from deciding that issues merit further consideration. “NCPs should not decide that issues do not merit further consideration solely because parallel proceedings have been conducted, are under way, or are available to the parties concerned.” Rather, “NCPs should evaluate whether an offer of good offices could make a positive contribution to the resolution of the issues raised and would not create serious prejudice for either of the parties involved in these other proceedings or cause a contempt of court situation.”[21]

e. How similar issues have been, or are being, treated in other domestic or international proceedings

The U.S. NCP was not aware of similar proceedings.

f. Whether the consideration of the specific issue would contribute to the purposes and effectiveness of the Guidelines

The U.S. NCP considered that its mediation could play a positive role in assisting the parties in facilitating a dialogue on the issues raised in the Specific Instance and reaching a mutually acceptable solution. Consistent with the criteria in the U.S. NCP procedures for Specific Instances (as established in the Guidelines themselves), the U.S. NCP determined in the course of its initial assessment that the matters raised are bona fide, merit further consideration, and are relevant to the implementation of the Guidelines. The U.S. NCP viewed that offering its good offices could contribute to the purposes and the effectiveness of the Guidelines.

Under U.S. NCP procedures, acceptance of the Specific Instance—including a finding that the issues raised by the submitters were bona fide—does not indicate the NCP considered the company to have acted inconsistently with the Guidelines, but rather that the NCP considers it appropriate to facilitate a discussion between the parties of the issues raised. An enterprise’s decision to participate in this process does not imply any prima facie admission of conduct inconsistent with the Guidelines.

Resolution

Each party, separately, engaged in serious discussions with the U.S. NCP and mediators about the possibility and modalities of mediation, but on December 13, 2021, the company informed the U.S. NCP that it declined to participate in mediation through the office of the U.S. NCP, citing the company’s belief that the submitters were engaged in inappropriate actions and misleading statements to the NCP and in the press. The company wrote that it nevertheless “remain[s] committed to the OECD Guidelines for Multinational Enterprises and respect[s] the U.S. NCP office as an important forum for mediating complex issues of business and human rights.” The company also wrote that it has “put into place global and market-level measures and [is] implementing the Global Brand Standards.” Representatives of the submitters expressed their disappointment with the company’s decision, as they claim GBVH is an ongoing issue at McDonald’s-brand restaurants.

Because mediation could not be established, the U.S. NCP brings this Specific Instance to a close with this Final Statement.

There will be further action, however. The OECD Secretariat has stated that follow-up, while not mandated by the Guidelines and approached in a variety of ways by different NCPs, can contribute to the effectiveness of an NCP.[22] The U.S. NCP’s guidelines currently provide for the possibility of follow-up “on an exceptional basis” and “entirely at the discretion of the U.S. NCP.”[23] Although no mediation will occur, in this situation where the submitters have asserted widespread and ongoing issues and the company has asserted that it is taking numerous relevant measures, it appears that subsequent follow-up in this Specific Instance could advance the purposes of the Guidelines. Both parties welcomed a possible opportunity to engage with the U.S. NCP about the topic of this Specific Instance after its conclusion. Accordingly, after one year from the date mediation was ruled out, or after December 13, 2022, the U.S. NCP will ask each party for updated information on the topic of GBVH at McDonald’s-brand restaurants, including any developments regarding the submitters’ allegations and the company’s efforts to act consistently with the Guidelines. The U.S. NCP may issue a follow-up report as an addendum to this Final Statement, as appropriate.

The U.S. NCP would like to thank all parties for their promptness in responding to inquiries and messages throughout the process. In particular, both parties took the process seriously and made lengthy, detailed, and well-supported written submissions. The U.S. NCP encourages the parties to engage in dialogue on the issues raised and stands ready to consider future requests for mediation by the parties.

David B. Sullivan
U.S. National Contact Point for the OECD Guidelines
U.S. Department of State

[1] Available at http://www.oecd.org/daf/inv/mne/48004323.pdf .

[2] “A Guide to the U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises,” available at https://www.state.gov/u-s-national-contact-point-for-the-oecd-guidelines-for-multinational-enterprises/a-guide-to-the-u-s-national-contact-point-for-the-oecd-guidelines-for-multinational-enterprises.

[3] https://www.state.gov/u-s-national-contact-point-for-the-oecd-guidelines-for-multinational-enterprises/

[4] OECD Guidelines, supra note 1, Chapter IV (Human Rights), paragraphs 1, 2, 3, 5.

[5] OECD Guidelines, supra note 1, Chapter V (Employment & Industrial Relations), paragraphs 3, 4(c).

[6] Id., Commentary on Chapter II (General Policies), paragraph 21.

[7] Id., Chapter II (General Policies), paragraphs A.11, A.12; Chapter IV (Human Rights), paragraphs 2, 3. More specifically, enterprises should avoid causing or contributing to adverse impacts through their own activities, and address such impacts where they occur, while enterprises should seek to prevent or mitigate adverse impact where they have not contributed to the impact but it is directly linked to their operations by a business relationship. See also OECD, OECD Due Diligence Guidance for Responsible Business Conduct (2018), at p.72, available at http://mneguidelines.oecd.org/OECD-Due-Diligence-Guidance-for-Responsible-Business-Conduct.pdf .

[8] https://www.oecdguidelines.nl/binaries/oecd-guidelines/documents/publication/2021/05/20/initial-assessment-of-the-notification-of-4-trade-unions-vs-apg-asset-management/210520+IA+4+Trade+Unions+vs+APG+Asset+Management.pdf .

[9] https://www.oecdguidelines.nl/binaries/oecd-guidelines/documents/publication/2022/02/03/fs-4-trade-unions-vs-apg/220203+IUF-APG+-+Final+statement+and+agreement.pdf .

[10] https://files.nettsteder.regjeringen.no/wpuploads01/sites/263/2021/06/Initial-assessment-for-publication-21-June-2021.pdf .

[11] The U.S. NCP does not normally publish parties’ submissions, but the Norwegian NCP does, so the submitters’ two initial filings are available at https://www.responsiblebusiness.no/iuf-effat-iuf-seiu-and-ugt-vs-nbim/ .

[12] IUF press release, “International union coalition demands action to combat sexual harassment at McDonald’s restaurants” (May 19, 2020), available at https://pre2020.iuf.org/w/?q=node/7716 .

[13] See OECD, Guide for National Contact Points on Confidentiality and Campaigning When Handling Specific Instances (2019), available at https://mneguidelines.oecd.org/Guide-for-NCPs-on-Confidentiality-and-campaigning-when-handling-specific-instances.pdf .

[14] U.S. NCP Guide, supra note 2.

[15] OECD, Guide for National [Contact] Points on the Initial Assessment of Specific Instances (2019), available at https://mneguidelines.oecd.org/Guide-for-National-Contact-Points-on-the-Initial-Assessment-of-Specific-Instances.pdf .

[16] OECD, Commentary on the Implementation Procedures of the OECD Guidelines for Multinational Enterprises, paragraph 25, in OECD Guidelines, supra note 1.

[17] OECD Guidelines, supra note 1, Chapter I, para. 4.

[18] OECD Guide on Initial Assessment, supra note 15, p.6.

[19] OECD Guidelines, supra note 1, Chapter II, para. A.12

[20] OECD Guide on Initial Assessment, supra note 15, p.7.

[21] Commentary on the Implementation Procedures of the OECD Guidelines, para. 26, in OECD Guidelines, supra note 1, at p.83.

[22] OECD, Guide for National Contact Points on Follow Up to Specific Instances (2019), at https://mneguidelines.oecd.org/ncps/Guide-for-National-Contact-Points-on-Follow-Up-to-Specific-Instances.pdf .

[23] U.S. NCP Guide, supra note 2.