Abstract

In the current human rights compliance landscape, a company like McDonald’s can pledge to serve sustainably sourced beef at its restaurants worldwide but at the same time decline to require policies that ensure employees at McDonald’s franchise locations are not subject to unfair labor practices, human rights abuses, or even human trafficking. This paper will explore the duty of business enterprises to respect human rights. It will then discuss the efforts to define the scope of a business and human rights treaty in the face of the “bundle of contracts”^—the structures of many business entities, specifically franchise arrangements. Finally, it will argue that a treaty covering the duties of franchises could have conflicting results: a treaty could provide more stability to the ever-evolving set of national franchise liability laws and perhaps encourage countries to open their courts to human rights claims against business entities. At the same time, increasing the possibility of liability could justify franchise fears about voluntarily implementing human rights policies and may ultimately incentivize innovation in corporate reorganization to escape treaty coverage instead of promoting corporate respect of human rights.

Keywords: human rights, bundle of contracts, franchise, franchise liability, corporate responsibility, corporate reorganization, corporate liability, Kiobel v. Royal Dutch Petroleum