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    McDonald's Agrees to Settle Significant Labor Case

  • Is McDonald's a joint employer of franchisees? That still isn't quite clear.

    McDonald's
    McDonald's workers claim they were fired for fighting for higher wages.

    In a case closely monitored by restaurant franchise companies around the country, McDonald’s and the National Labor Relations Board asked an agency judge to approve the settlement of a trial that was set to resume Monday (March 19) after a two-month delay.

    According to Reuters, a source said the company agreed to settle the labor board case, intended to determine whether McDonald’s should be held accountable for its franchisees’ alleged labor law violations. While a NLRB judge still must approve it, this ruling would keep McDonald’s from being treated as a “joint employer” of workers at McDonald’s franchises, and, in turn, held liable for the illegal labor actions of franchisees.

    The trail comes from claims made by employees of a McDonald’s franchisees who said they were fired for joining a national effort to fight for $15 hourly wages, also known as the “Fight for $15” movement. Democratic Senator Elizabeth Warren joined attorneys for the union-backed Fast Food Workers Organizing Committee Saturday in accusing the board’s general counsel, Peter Robb, of rushing to settle the case in favor of McDonald’s, according to Bloomberg.

    In a motion filed Monday by a McDonald’s attorney, the company said: “A settlement that provides full relief on all the substantive unfair labor practice charges at issue in this case, and that avoids years of additional litigation that would otherwise delay whatever relief is ultimately determined, is more than reasonable.”

    Some groups have warned that a ruling against McDonald’s in this case could disrupt the franchising industry by showing that franchisors could be sued and thus required to bargain with unions representing franchise workers.

    According to Reuters, Robb and McDonald’s presented the settlement to an administrative judge at a hearing in New York City.

    The issue stems to 2012, when Fight for $15 filed claims on behalf of McDonald’s workers, saying employees across the country were fired for protesting for a higher wage. The trial began in 2016 and was paused in January so President Donald Trump-appointed Robb could begin pursing a settlement. The issue being whether McDonald’s had enough control over its franchisees to be considered a “joint employer.” This settlement, Bloomberg said, does not include a determination that McDonald’s is a “joint employer” of the workers.

    Micah Wissinger, an attorney for the Fast Food Workers Organizing Committee, is expected to object to the settlement.

    This adds another chapter to the ongoing “joint employer” saga. On February 26, the NLRB unanimously vacated its December Hy-Brand ruling, meaning restaurant operators around the nation will once again be subject to the 2015 Browning-Ferris test for determining joint employment.

    The NLRB did so following an inspector general report that said board member Bill Emanuel should have recused himself from voting in the case. The ruling reverts, at least for now, to the Obama-era precedent stemming from the Hy-Brand Industrial Contractors, Ltd. decision, which dramatically narrowed the situations where the joint employer doctrine could be applied. Read more about the reversal here.

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