Judge Mulls Proposed McDonald's/NLRB Settlement

More than three years have passed since the National Labor Relations Board’s bombshell in late 2014, when it said it would hold McDonald’s liable for alleged workplace violations along with its franchisees as a “joint employer.” 

The franchise community went ballistic, saying the decision meant the end of franchising as we know it. Union and workers’ rights advocates, on the other hand, hailed the move as the only way to hold employers accountable for how they treat employees.

Now all the gnashing of teeth, spilling of ink and doomsday predictions have resulted in a proposed settlement between the parties, which is being considered by Administrative Law Judge Lauren Esposito and could be decided at any time. McDonald’s and the NLRB urge the settlement’s approval. 

Mary Joyce Carlson, an attorney for Fight for $15 and the SEIU, Service Employees International Union, issued a statement after the April hearing saying the proposed settlement “does nothing to hold the $5 billion company accountable for violating its workers’ rights.” She called it a “sham settlement.” Carlson did not return a request for comment. Sen. Elizabeth Warren, D-Mass., is among those opposing the settlement.

David Kaufmann, an attorney with Kaufmann Gildin & Robbins who represents many franchisors but is not involved in this case, isn’t sure when a decision will come.

 “Anybody who predicts when the NLRB is going to approve a settlement is out of his or her mind. You just can’t tell,” he said in late April. But he does predict the standard for declaring “joint employer” will revert to its pre-Browning-Ferris days, meaning the employer has to exhibit direct control in order to be held liable as a joint employer. 

(Browning-Ferris said the standard was the mere right to control terms and conditions of employment, regardless of whether that right was actually exercised.)

“I’ve been saying at the depths of this thing, when some lawyers were running around saying the sky is falling, I was saying everybody just calm down. This is going to pass. It will not survive judicial challenge. It can’t. It so conflicts with the law,”Kaufmann said.