McDonald’s Reaches Deal With NLRB In Joint-Employer Case

Law360 (March 19, 2018, 8:36 PM EDT) — McDonald’s USA LLC said Monday that it has reached a settlement with the National Labor Relations Board in a case over whether the fast-food giant and its franchisees are jointly liable for alleged labor law violations.

A McDonald’s spokesperson told Law360 that the settlement, which still must be finalized by an administrative law judge, resolves all matters without requiring McDonald’s to admit any wrongdoing. (AP)

Calling the multiyear litigation “wasteful,” a McDonald’s spokesperson told Law360 in a statement that the settlement, which still must be finalized by an administrative law judge, resolves all matters without requiring McDonald’s to admit any wrongdoing.

“Additionally, current and former franchisee employees involved in the proceedings are receiving long overdue satisfaction of their claims,” the spokesperson said. “As it has maintained throughout this process, McDonald’s USA is not and never has been a joint employer with its franchisees.”

The sweeping litigation against McDonald’s stemmed from a 2014 directive by then-NLRB General Counsel Richard Griffin authorizing dozens of unfair labor practice complaints based on charges brought by McDonald’s workers who took steps to try to improve their working conditions, including participating in nationwide protests. The complaints were based on a legal theory that McDonald’s USA could be treated as a joint employer along with its franchisees.

The initial complaints involved charges that were filed in more than a dozen regional offices, including those in New York, Philadelphia and Chicago, according to the agency.

But since Griffin’s term ended in October, employment law observers had speculated that new NLRB General Counsel Peter Robb might take a different approach to the McDonald’s case, particularly after the labor board’s newly installed Republican majority tightened its test for determining joint employment in a case known as Hy-Brand.

That case overruled a 2015 NLRB decision in Browning-Ferris Industries that expanded the board’s joint employer test, returning the NLRB to the pre-BFI standard requiring businesses to have “direct and immediate” control over terms and conditions of employment to be deemed a single joint employer under the National Labor Relations Act.

In January an NLRB judge granted the request for the NLRB’s general counsel to put the McDonald’s case on hold for 60 days while the company attempted to negotiate a settlement.

In February, however, the NLRB unanimously vacated its Hy-Brand joint employer ruling in light of an inspector general report that faulted board member Bill Emanuel for improperly participating in that case, meaning that the 2015 Browning-Ferris test for determining joint employment is once again the law of the land.

Following that decision, a group of lawmakers, led by U.S. Sen. Elizabeth Warren, D-Mass., wrote to Robb that the Hy-Brand decision had been the pretext for discussing a settlement on the McDonald’s case and that because Hy-Brand is no longer the law of the land, settlement talks are no longer warranted.

The terms of the settlement were not available Monday, and the NLRB did not immediately respond to a request for comment.

“Today’s proposal by McDonalds is not a settlement,” the charging parties’ attorney Micah Wissinger of Levy Ratner PC told Law360 in a statement. “In a real settlement, McDonald’s would take responsibility for illegally firing and harassing workers fighting to get off food stamps and out of poverty. We look forward to presenting our objections to the judge.”

McDonald’s is represented by Willis J. Goldsmith, Doreen S. Davis, Ilana R. Yoffe, Justin D. Martin, Michael S. Ferrell, Jonathan M. Linas and E. Michael Rossman of Jones Day.

The NLRB general counsel is represented by Geoffrey Dunham, among others.

The charging parties are represented by Micah Wissinger of Levy Ratner PC.

The case is McDonald’s USA LLC, a joint employer et al., case numbers 02-CA-093893 et al., before the National Labor Relations Board.

–Author: Dave Simpson; additional reporting by Vin Gurrieri and Adam Lidgett. Editing by Edrienne Su