Employment Law Daily NLRB: In joint employer case, McDonald’s `brand protection’ defense doesn’t justify its subpoenas to outside unions
Tuesday, March 22, 2016

NLRB: In joint employer case, McDonald’s `brand protection’ defense doesn’t justify its subpoenas to outside unions

By Lisa Milam-Perez, J.D. An NLRB administrative law judge did not abuse her discretion when she decided to revoke, in part, McDonald’s subpoena requests seeking documents from several third parties in the massive joint employer case currently before her, a divided NLRB panel held. The subpoenaed documents went to the company’s “brand protection” defense, which was premised on McDonald’s contention that SEIU and other labor groups had launched a nefarious attack on the national restaurant franchise’s brand. Even if true, the SEIU’s underlying motive had nothing to do with whether McDonald’s was a joint employer, which was the sole question presently before the law judge, the majority reasoned. The meat of the opinion, however, is Member Miscimarra’s lengthy dissent, in which he decried the double standard at hand with respect to subpoena enforcement and what he believed to be the law judge’s premature dismissal of the merits of McDonald’s defense (McDonald’s USA, LLC, a Joint Employer, March 17, 2016). Unfair labor practices? The underlying consolidated unfair labor practice complaint arose out of 61 unfair labor practice charges filed in six NLRB regions alleging 181 various unfair labor practices committed by 31 separate restaurant franchisees. Before the merits of those charges would be considered, though, the law judge was to grapple with the threshold question of whether McDonald’s USA LLC, the national franchisor, was a joint employer alongside the franchisees, having ostensibly coordinated and directed the allegedly unlawful conduct carried out by the franchisees in response to employees’ protected, concerted activities. “Brand protection.” McDonald’s has asserted two lines of defense in the ongoing case: (1) as a factual matter, it did not direct the franchisees’ response to the employees’ concerted activities; and (2) the employees were acting as part of a carefully coordinated assault by the SEIU and other labor groups on the McDonald’s brand, and any role the national franchisor may have played in responding to this attack was an effort to protect its brand—and not in any joint employer capacity. To shore up its “brand protection” defense, McDonald’s subpoenaed various parties and nonparties in the dispute, seeking documents that would provide evidence of their plot. It requested documents that could have informed McDonalds’ (and the franchisees’) perception that the employees’ public conduct stemmed from a coordinated labor campaign to attack the McDonald’s brand. Motive irrelevant. But the law judge granted in part their petitions to revoke the subpoenas served upon them, finding that McDonald’s failed to establish the relevance of most of the subpoenaed documents. Specifically, she found that the motive behind the charging parties’ campaign was irrelevant to the analysis of whether McDonald’s is a joint employer with the franchisees and irrelevant to the asserted brand protection defense as well. She denied the petition to revoke, though, to the extent the subpoenas sought documents showing the public actions of the SEIU and the other charging parties, deeming these potentially relevant to McDonald’s defense. No abuse of discretion. The law judge did not abuse her discretion in partially granting the petitions to revoke, the Board majority found. It agreed with her conclusion that evidence of the charging parties’ motives simply was not relevant to the joint employer question, i.e., to whether McDonald’s shared or codetermined matters governing the essential terms and conditions of employment or to McDonald’s asserted brand protection defense to a finding of joint employer status. “The premise underlying McDonald’s proposed brand protection defense is that it took certain actions to protect its brand in response to what it reasonably perceived was an attack on its brand, and that, as such, those actions should be excluded from an analysis of whether it was a joint employer with Respondent Franchisees,” the majority noted. Consequently, McDonald’s motivation was relevant, but the actual motive of SEIU and the other charging parties was not. Dissent. Arguing that the law judge’s holdings were in conflict with the NLRA and the Board’s procedural rules, and did “violence to basic principles of fairness,” Member Miscimarra dissented. He used a criminal law analogy: “If a person accused of murder maintains he was acting in self-defense, evidence that he was being attacked is obviously relevant,” Miscimarra urged. Whether the “brand protection” defense ultimately holds water isn’t the issue; what matters at this stage is whether McDonald’s should be allowed at least to seek relevant evidence in support of this defense. Moreover, the law judge seems to have prematurely rejected the defense from the outset, calling it “convoluted.” Noting the liberal standards applicable to Board subpoenas, Miscimarra suspected there was a double standard in effect: “extraordinary deference is accorded to the General Counsel’s attorneys, whose prosecutorial decisions are the driving force behind nearly everything in this unprecedented litigation, while McDonald’s and other respondents are being afforded no comparable latitude, even concerning a good-faith defense that has support in existing Board law.” Procedural defenses. As an aside, a weary Board majority noted that even though the first witness in this closely watched proceeding had yet to be called, McDonald’s already had filed seven separate requests for special permission to appeal various procedural rulings issued by the law judge in the case, as well as additional request to supplement requests that the national restaurant chain (or its franchisees, also respondents in the case) had already filed. Despite granting every one of those requests, none has been meritorious—at least in the majority’s view.

Interested in submitting an article?

Submit your information to us today!

Learn More