McDonald’s proposed settlement would give ‘what is intended as’ 100% of back pay to affected workers, end joint employer debate
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Tuesday, March 20, 2018

McDonald’s proposed settlement would give ‘what is intended as’ 100% of back pay to affected workers, end joint employer debate

By Pamela Wolf, J.D.

Under proposed settlement agreements submitted to an NLRB Administrative Law Judge on March 20 for approval, McDonald’s USA, LLC, and its franchisees would give what is “intended to provide” 100 percent of back pay for workers who allegedly were treated unfairly. The proposed deals represent a full remedy for all unfair labor practice cases pending before ALJ Lauren Esposito, including those previously severed from the litigation. However, neither the Labor Board, nor McDonald’s, has put a monetary amount on the proposal.

McDonald’s USA, LLC, as a joint employer, and multiple franchisees, were accused of violating workers’ rights by, among other things, making statements and taking actions against them for engaging in activities aimed at improving their wages and working conditions—including their participation in nationwide fast-food worker protests.

Joint employer battle. The McDonald’s cases have long been the face of the battle over the joint-employment standard established under the Board’s 2015 Browning-Ferris ruling during the Obama era, which swept certain indirect employment relationships more common in today’s workplaces into the definition of employment for NLRA purposes. That standard was purportedly overruled in December 2017, during a narrow window of a Republican majority on the Board. That case, Hy-Brand Industrial Contractors, Ltd., was later vacated by the Board on February 26 due to ethics concerns raised in an inspector general’s report over Member William Emanuel’s participation in the decision, which the report labelled a “do over” for the Browning-Ferris parties, one of which was represented by Emanuel’s former law firm, Littler Mendelson.

The vacatur of the Hy-brand decision returned the Board to the broader, more adverse standard from the perspective of McDonald’s and its franchisees. The Board had sought a stay for negotiations while Hy-brand was still operative, only to find itself returned to the earlier Obama-era standard.

More on the proposed deals. The settlement agreements, which were submitted by McDonald’s and its franchisees, had been negotiated by the Counsel for the General Counsel of the NLRB, according to the Board’s release. Drafts of the agreements were previously presented to counsel for charging parties for review and comment.

McDonald’s USA, LLC, has agreed to certain steps aimed at ensuring that the proposed settlement, if approved, will be fully effectuated and honored by its franchisees. Those steps include the establishment of a settlement fund—the amount of which has not been revealed—in the event of any breaches of the settlement agreements.

McDonald’s corporate statement. In a statement provided to Employment Law Daily, a McDonald’s USA spokesperson noted that the proposed settlement 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 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 spokesperson also said that while the settlement is not yet final, “we believe this is a major first step in ending this wasteful multi-year litigation.”

From the other side. Not all parties see the proposed settlement as an appropriate resolution of the cases. In a statement to Employment Law Daily, Micah Wissinger, an attorney representing the Fight for $15 worker organizing committees and the SEIU, put it this way: “The proposal by McDonald’s is not a settlement. 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.”

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