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NLRB Judge Listens to Arguments for and against McDonald’s Settlement

In a hearing last Thursday, Administrative Law Judge Lauren Esposito listened to arguments from McDonald's Corporation attorney and the general counsel of the National Labor Relations Board on why the giant hamburger franchisor's settlement agreement should be approved to let it off the hook of being a joint employer with its franchisees on labor violations. But workers' advocates adamantly disagreed.

Law360 reported that after NLRB Judge Esposito listened to the debate, she did not render a decision. Instead, she "peppered" the attorneys for all sides with questions about various aspects of McDonald's proposed settlement.

McDonald's raced on March 19, to submit its settlement agreement to the NLRB, just making the Board's deadline. The agreement committed to paying a range of roughly $20 to $50,000 to several dozen workers who alleged that the fast food chain 's franchisees had violated their labor rights. Under its settlement, McDonald's and its franchisees would not have to admit any liability. The company also agreed to support the settlement by taking responsibility for the establishment of a $250,000 settlement fund, which would be used to distribute unused funds back to franchisees after a certain period.

The charges against McDonald's were first filed in November of 2012, and, if approved, would avoid years of possible additional litigation, according to the NLRB. McDonald's 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 agreement.

Jamie Rucker, attorney representing the office of NLRB general counsel Peter Robb, opened last Thursday's hearing with the argument that the settlement "is reasonable and should be approved in part because it offers prompt resolution of unfair labor practice charges while conserving agency resources, as opposed to prolonged litigation," the Law360 report stated, adding, "The judge at one point asked Ruck whether the general counsel's office had reconsidered settling the case after the NLRB rescinded a controversial December ruling known as Hy-Brand, which reinstated the stricter standard for analyzing joint employer status that had been in place before the NLRB loosened it in its 2015 Browning-Ferris decision."

Rucker responded that the NLRB's withdrawal of Hy-Brand had "no impact" on its decision to pursue a settlement with McDonald's.

McDonald's attorney Willis Goldsmith of Jones Day, who agreed with the NLRB general counsel's arguments favoring a settlement, "noted toward the end of the approximately three-hour hearing that the company had actually approached board attorneys to broach the idea of a settlement before the Hy-Brand decision was issued."

One participant objecting to the approval of the settlement was Kathy L. Krieger of James & Hoffman. After presenting an array of arguments to the judge, she expressed that the effect of Hy-Brand on the current case "was negligible." She said the proposed agreement "allows McDonald's to bury the entirety of the violations." Krieger also noted what Judge Esposito said in her January order that McDonald's delayed presenting its case, saying the company was waiting for "a changing of the guard at the NLRB."

McDonald's counsel, Goldsmith, responded that "even though the charging parties are seeking to change the law pertaining to joint employment, they don't have the right to continuously drain the resources of McDonald's USA." He added, "If they want to change the law, go to Congress. McDonald's USA is not a joint employer and will never cede that point," the law journal stated.

After McDonald's made its announcement that it had reached a global settlement to end the case, Judge Esposito said it hadn't been approved yet, that she would be holding a hearing on April 2.

At last week's hearing, Mary Joyce Carlson, attorney for Fight for $15, issued a statement after the hearing. It said the proposed settlement by McDonald's "does nothing to hold the $5 billion company accountable for violating its workers' rights." The statement said workers who were retaliated against for organizing "deserve a ruling in their case [and] not a settlement hammered out at the last minutes in collusion with the Trump administration."

Law360 said "the sweeping litigation against McDonald's stemmed from a 2014 directive by then-NLRB General Counsel Richard Griffin authorizing dozens of unfair labor practices complaints based on charges brought by McDonald's workers who were retaliated against by participating in nationwide protests organized by Fight for $15 campaign, which is backed by the SEIU (Service Employees International Union.)"

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