Some important comments from Fons at China Herald made me come back to this issue of McDonalds, KFC and Pizza Hut being accused of violating minimum wage laws. His view is that this case represents a departure from previous incidents (I assume he means campaigns against MNCs). Here’s a lawyerly answer to that: I agree in part and disagree in part.

Yes, this incident is quite serious and involves not only individuals and groups that are unhappy with these MNCs, but a policy shift regarding the labor market and government oversight. I agree that this may have lasting impact not only on FIEs, but also domestic employers (the latter sometime in the future). In the past, these sorts of campaigns against foreign companies, often involving product quality issues, were not about substantive legal policy issues or regulatory matters, but rather specific cases of alleged wrongdoing. Insofar as this case could spill over to other enterprises and effect enforcement and oversight, this represents a departure. How far that spillover will go, and what real change we will see with enforcement within the next couple of years, is quite hard to say. I don’t really know one way or the other, but as a cynic, I think there will be backsliding on whatever enforcement measures are being touted at the moment. Time will tell.

I maintain, however, that although the substance of this campaign may be different, the procedure does look familiar to me. The product quality cases in the past did start off like this, did have the participation of these groups and certain levels of the government, and did get toned down again when the government got nervous. You could easily see the same thing happen here if folks get excited.

However, this does not necessarily mean that when the government pulls the plug on the more vocal demonstrations of condemnation, the campaign immediately ends and everyone goes home. I remember the Toshiba laptop case several years ago that followed this pattern. Eventually Beijing said to cool off, and things calmed down. However, an attempted class action suit dragged on for quite a while, with the active participation of consumer groups and different government officials. Beijing eventually pulled the plug on that too. Fons is right, this will not go away by itself; however, if “public outrage” gets ugly, things will be forcibly tamped down to an extent.

Anyway, this is all speculation on my part based on incidents over the past several years. My interest in this matter is still on the actions of the MNCs, their handling of the local press, and the interaction between corporate (offshore) execs and local managers. Always fun to play “Monday morning quarterback” on decisions made by corporation communications people and in-house counsel.  They love that.