Big brands like McDonald's need to be held more accountable for the things franchisees do in their name.
— Jason Clampet
The National Labor Relations Board is ignoring its own guidelines and rushing to settle a major workplace action involving McDonald’s Corp., lawyers for employees involved in the litigation alleged. If the workers win at trial, the case could have a profound effect on how major corporations are held liable for workplace wrongdoing.
The action before the NLRB stems from claims by McDonald’s franchise employees who said they were fired in retaliation for joining a national effort to obtain a $15 hourly wage, the so-called Fight For $15 movement. McDonald’s has both denied any wrongdoing and said it shouldn’t be held responsible for the actions of individual franchises.
In January, a trial in the matter was nearing completion when it was suspended at agency request. The NLRB told the judge it would seek to settle the case, in part because an unrelated agency ruling in December undercut the claims against McDonald’s Corp. Last month, though, the NLRB inspector general said the December decision was tainted by one board member’s conflict, causing the agency to set it aside.
With the stay ending Monday, trial in the McDonald’s case is slated to resume this week.
Faced with a potential landmark decision in favor of franchise employees, NLRB lawyers have secured a deal with McDonald’s Corp. and are now racing to settle employee claims by Monday, attorneys for the workers contend. In doing so, the lawyers claim NLRB officials are wrongfully circumventing them and going straight to the workers with take-it-or-leave-it offers.
“It’s just a massive, last-minute scramble—board agents tripping over themselves to get settlements,” said Micah Wissinger, an attorney for the Fast Food Workers Organizing Committee, a union-backed group. Senator Elizabeth Warren of Massachusetts said Saturday that a rush to settle the case is “an insult to every working American.”
“Donald Trump’s NLRB is trying to railroad workers into terrible settlements and let corporations violating labor laws off the hook,” the Democrat said in an emailed statement.
The NLRB and McDonald’s didn’t immediately respond to requests for comment.
“These workers have waited years, and all of the sudden they have to make a decision in ten minutes.”
A decision for the McDonald’s workers, who come from dozens of McDonald’s franchises across the country, could be cited as precedent in future lawsuits seeking to reach the deep pockets of multinationals whose franchises and units engage in workplace wrongdoing. Such a ruling—that McDonald’s Corp. is a “joint employer” with enough power over its franchises to share legal responsibility for violations of worker rights—would in turn spur increased litigation costs for companies.
Wissinger alleged in an interview that NLRB lawyers are soliciting workers to accept deals on the spot or within hours, without sufficient opportunity to review final terms with the labor group’s attorney, and in some cases without the workers fully understanding they are waiving their right to get their job back. “These workers have waited years, and all of the sudden they have to make a decision in ten minutes because the general counsel wants to help McDonald’s kill its case before Monday,” he said.
In 2012, the NLRB under the Obama administration began probing allegations by workers at franchised McDonald’s restaurants that they were fired for their participation in Service Employees International Union-backed labor and wage protests. In 2015, an NLRB ruling in an unrelated case provided agency lawyers with stronger legal grounds to win claims against McDonald’s Corp., not just the franchisees.
In a 3-2 vote, the NLRB’s Democratic majority in Browning-Ferris made it easier for a company to be considered a joint employer of workers who are paid by someone else. Business groups were outraged.
When the agency trial in the McDonald’s case began in 2016, an attorney for the fast food company argued that Dick Griffin, the Obama-appointed NLRB general counsel and former union lawyer, was attempting to drive “a wedge between McDonald’s and its franchisees by forcing a massive piece of litigation” over allegations many of which could have been settled “in a fifteen minute phone call.”
The trial dragged on through 2017 as the makeup of the NLRB became majority Republican under the Trump administration. Then in December, the NLRB used another case, named Hy-Brand, to reverse Browning-Ferris, also by a 3-2 vote. The NLRB’s new general counsel, management-side attorney Peter Robb, cited Hy-Brand to delay the McDonald’s trial so he could pursue a settlement.
On Feb. 27, the tables turned yet again. The NLRB, under increasing pressure from Democrats on Capitol Hill, voted to throw out Hy-Brand after its inspector general found board member William Emanuel, a Republican appointee, shouldn’t have participated in the case because his law firm represented a company in Browning-Ferris. Since then, congressional Democrats have urged hearings on the conflict-of-interest allegations and demanded that trial in the McDonald’s case be resumed.
“There’s optics that suggest that they’re putting more weight on rapidly finishing this case up.”
With trial in the case set to resume as early as Monday, lawyers for the McDonald’s employees claim Robb and his staff are offering settlements to avoid completion of the litigation. Robb, a former management-side attorney, worked in the 1980’s as part of the Reagan administration effort to dissolve the air traffic controllers union. He was lead attorney in a controversial case that resulted in the firing of thousands of striking workers and the decertification of the Professional Air Traffic Controllers Organization. Labor historians called it a critical turning point in the American labor movement, and the beginning of decades of decline in union membership and wage stagnation.
“The PATCO case was probably the most important labor conflict of the last part of the 20th century,” Joseph McCartin, a professor at Georgetown University, told Bloomberg BNA.
As NLRB general counsel, Robb has almost unlimited discretion to settle cases, said University of Wyoming law professor and former agency attorney Michael Duff. He can even do so without the support of the workers or organizations who brought the allegations, Duff said. However, the approach being described by the Fast Food Workers Organizing Committee would be a departure from standard practice, he added. “I can’t remember a time when we didn’t give charging parties a week to look over a settlement agreement,” said Duff, who worked at the labor board under Presidents Bill Clinton and George W. Bush. “You want to be clear that everybody understands what’s going on.”
“To our knowledge not a single worker who is owed any backpay has seen any figures, any of the calculations.”
The handling of the McDonald’s case raises broader questions about the labor board’s approach under Trump, said former NLRB attorney Jeffrey Hirsch, a law professor at the University of North Carolina.
“There’s optics that suggest that they’re putting more weight on rapidly finishing this case up than they are on ensuring that the workers discriminated against are actually getting a full and fair hearing as to what they think is a fair settlement,” Hirsch said. “The question, is why are you rushing it?”
Wissinger, the fast food workers group lawyer, said that, over the past several days, employees have been contacted directly by the NLRB lawyers without notice to him or other attorneys working on their behalf. NLRB case handling rules state that agency lawyers must adhere to general standards of ethical conduct, which include dealing with the legal representatives of claimants and organizations that filed the original claims, and provide claimants with sufficient time and information to make an educated decision on settlement offers, particularly when they include a waiver of job reinstatement.
“To our knowledge not a single worker who is owed any backpay has seen any figures, any of the calculations” when approached by NLRB lawyers with a McDonald’s settlememt offer, Wissinger said.
“A worker here in New York received a phone call, ‘$50,000, would that be OK?’” she was asked, according to Wissinger. “She wasn’t even really clear about the waiver. She doesn’t know how much of that $50,000 is truly her backpay award and how much of it is a walkaway premium.” She eventually signed off on the agreement without knowing she had just forfeited her job, Wissinger said.
“You’ve got a group of courageous workers who have waited and testified and stood by this case to try to hold McDonald’s accountable,” Wissinger said. “And now they’re just getting kneecapped.”
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