McDonald's and US labor board move to settle litigation

McDonald's and US labor board move to settle litigation
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The National Labor Relations Board (NLRB) and McDonald's on Monday reached a settlement agreement on a years-long case that aimed to set a labor standard establishing that corporations are responsible for actions by their franchisees.

An administrative judge must now approve the agreement, in which McDonald's admits no wrongdoing. 

The case has been critical to the ongoing debate surrounding the NLRB's definition of “joint employer,” which was loosened by the board during the Obama administration.

Under the definition prior to 2015, a company was only considered to be a joint employer if they had a direct hand in a franchisees' employee issues, including scheduling and hiring decisions.

McDonald's maintains that it “is not and never has been a joint employer with its franchisees.” 

“We are very pleased to have reached settlement of the NLRB unfair labor practice proceedings involving McDonald’s USA and various McDonald’s franchisees across the country,” the company said in an emailed statement. 

“The settlement allows our franchisees and their employees to move forward, and resolves all matters without any admission of wrongdoing. Additionally, current and former franchisee employees involved in the proceedings are receiving long overdue satisfaction of their claims,” the company said. “While the settlement is not yet final, we believe this is major first step in ending this wasteful multi-year litigation.”

Administrative Law Judge Lauren Esposito must now approve the settlement agreement, which the NLRB said in a release is "intended to provide 100% of backpay for the alleged discriminatees and represent a full remedy for all unfair labor practice cases pending before Judge Esposito.” Those cases include ones that had been separated from the ongoing lawsuits.

“These settlements represent a full remedy for the employees who have waited since the first charges were filed in November of 2012 and, if approved, would avoid years of possible additional litigation,” the NLRB said in a release on Tuesday. “McDonald’s USA, LLC has agreed to certain steps to ensure that the settlement will be fully effectuated and honored by its franchisees, including the establishment of a settlement fund in the event of any breaches of the settlement agreements.”

Litigation began in 2012, when an advocacy group aimed at increasing the minimum wage, called Fight for $15, filed several cases against McDonald's. The group claimed that McDonald's retaliated against workers who protested for higher wages.

Micah Wissinger, a lawyer for Fight for $15, balked at the proposed deal.

“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,” Wissinger told Reuters.

The International Franchise Association, which opposes the liberalized definition of joint employer established in 2015, also expressed unease with the settlement agreement.

“This apparent settlement does nothing to settle the uncertain terrain facing America’s 733,000 franchise owners regarding the question, who’s the boss?” said Matt Haller, the group’s senior vice president of government relations and public affairs.

“For nearly six years, since this wild goose chase began under the previous NLRB general counsel, the NLRB has flip-flopped on joint employer policy three times, while federal courts and the Labor Department continue to apply a different joint employer standard against franchise owners throughout the country.”

The industry group has led a charge to pass legislation to establish a final definition for joint employer, including trying to attach a provision to the must-pass spending bill now being negotiated in Congress.