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

<p>In a hearing last Thursday, Administrative Law Judge Lauren Esposito listened to arguments from McDonald&#39;s Corporation attorney and the general counsel of the National Labor Relations Board on why the giant hamburger franchisor&#39;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&#39; advocates adamantly disagreed.</p>
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<p><a href="https://www.law360.com/articles/1030400/mcdonald-s-nlrb-say-joint-emplo… reported</a> that after NLRB Judge Esposito listened to the debate, she did not render a decision. Instead, she &quot;peppered&quot; the attorneys for all sides with questions about various aspects of McDonald&#39;s proposed settlement.</p>

<p>McDonald&#39;s raced on March 19, to submit its settlement agreement to the NLRB, just making the Board&#39;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 &#39;s franchisees had violated their labor rights. Under its settlement, McDonald&#39;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.</p>

<p>The charges against McDonald&#39;s were first filed in November of 2012, and, if approved, would avoid years of possible additional litigation, according to the NLRB. McDonald&#39;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.</p>

<p>Jamie Rucker, attorney representing the office of NLRB general counsel Peter Robb, opened last Thursday&#39;s hearing with the argument that the settlement &quot;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,&quot; the Law360 report stated, adding, &quot;The judge at one point asked Ruck whether the general counsel&#39;s office had reconsidered settling the case after the NLRB rescinded a controversial December ruling known as Hy-Brand, which reinstated the stricter standard for analyzing joint employer status that had been in place before the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.&quot;</p>

<p>Rucker responded that the NLRB&#39;s withdrawal of Hy-Brand had &quot;no impact&quot; on its decision to pursue a settlement with McDonald&#39;s.</p>

<p>McDonald&#39;s attorney Willis Goldsmith of Jones Day, who agreed with the NLRB general counsel&#39;s arguments favoring a settlement, &quot;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.&quot;</p>

<p>One participant objecting to the approval of the settlement was Kathy L. Krieger of James &amp; Hoffman. After presenting an array of arguments to the judge, she expressed that the effect of Hy-Brand on the current case &quot;was negligible.&quot; She said the proposed agreement &quot;allows McDonald&#39;s to bury the entirety of the violations.&quot; Krieger also noted what Judge Esposito said in her January order that McDonald&#39;s delayed presenting its case, saying the company was waiting for &quot;a changing of the guard at the NLRB.&quot;</p>

<p>McDonald&#39;s counsel, Goldsmith, responded that &quot;even though the charging parties are seeking to change the law pertaining to joint employment, they don&#39;t have the right to continuously drain the resources of McDonald&#39;s USA.&quot; He added, &quot;If they want to change the law, go to Congress. McDonald&#39;s USA is not a joint employer and will never cede that point,&quot; the law journal stated.</p>

<p>After McDonald&#39;s made its announcement that it had reached a global settlement to end the case, Judge Esposito said it hadn&#39;t been approved yet, that she would be holding a hearing on April 2.</p>

<p>At last week&#39;s hearing, Mary Joyce Carlson, attorney for Fight for $15, issued a statement after the hearing. It said the proposed settlement by McDonald&#39;s &quot;does nothing to hold the $5 billion company accountable for violating its workers&#39; rights.&quot; The statement said workers who were retaliated against for organizing &quot;deserve a ruling in their case [and] not a settlement hammered out at the last minutes in collusion with the Trump administration.&quot;</p>

<p>Law360 said &quot;the sweeping litigation against McDonald&#39;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&#39;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.)&quot;</p>

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Janet Sparks