Today’s News & Commentary — December 13, 2019


Published December 13th, 2019 - 12.13.1921


Yesterday, the National Labor Relations Board (NLRB) directed an Administrative Law Judge to approve a series of proposed settlement agreements proffered by McDonald’s in a long-running dispute over unfair labor practices committed by its franchisees—a dispute that centers on the degree to which the company can be held accountable for those violations as a “joint employer.” The decision is the latest development in a case that charges McDonald’s with helping organize and enable its franchisees to push back against the “Fight for $15” movement. The alleged unfair labor practices include threatening and discharging employees who had engaged in protected activity in support of Fight for $15 and the various unionization measures that attended the movement. The judge below had concluded that the settlement agreements were unreasonable in light of the allegations levied against the company, specifically noting that McDonald’s obligations under the agreement did not approximate the remedial effect of a joint-employer finding. The settlement agreements do not impose joint and several liability on McDonald’s as a joint employer of the franchises in question.

The three-member Board decision was a split one—Trump appointees William Emanuel and Marvin Kaplan voted in favor of the settlement agreements, while Lauren McFerran dissented. Member McFerran agreed with the judge’s order finding the settlement agreements unreasonable, while emphasizing the context in which the settlements were offered. The original complaints against McDonald’s and the franchisees were issued in 2014. In 2015, the NLRB announced its decision in Browning-Ferris, broadening the “joint employer” test to allow consideration of whether the alleged joint employer exercised indirect control or had some reserved authority to exercise control over the employees in question. As McFerran points out in her dissent, this standard spelled bad news for McDonald’s. While Trump’s NLRB attempted to overturn Browning-Ferris in the 2017 Hy-Brand case, the latter decision was vacated in late February 2018, after it was decided that Member Emanuel should have been disqualified from hearing the case. Then came the proposed settlements, submitted by McDonald’s with the support of current General Counsel Peter Robb in March 2018, despite the years-long accumulation of evidence suggesting that McDonald’s played a substantial role in directing its franchisees on how to respond to the Fight for $15 movement. The settlement offers came days before the case was set to close—a move on the part of the General Counsel which Administrative Law Judge Lauren Esposito called “simply baffling.”

Journalists with Bloomberg reported on the decision yesterday, noting how difficult it is not to read the opinion as anything other than a tacit acceptance of the way that McDonald’s coordinated its franchisees’ responses to the Fight for $15 movement. As the article notes (and the decision discusses briefly in a footnote), the charging parties had filed a motion for Chairman John F. Ring and Member Emanuel to recuse themselves from the case. The movants argued that Emanuel’s recusal was justified based on his private sector work for one of the law firms that McDonald’s consulted with during its battle with Fight for $15 organizers. That motion was denied. As for the future of the “joint employer” test, the NLRB has resorted to the rulemaking process to accomplish what it failed to do in Hy-Brand. You can read some of our previous commentary on that rule here and here.

The Eastern Atlantic States Regional Council of Carpenters has released a report alleging systemic labor law violations across several Virginia construction projects associated with Amazon’s new “HQ2” project in that state. The union claims that various parties supervising and providing workers for the construction projects—projects which include temporary housing, a warehouse, and data centers—have been misclassifying workers at the sites as individual contractors. The allegations also include stories from workers who were told to cash their paychecks at particular locations with particular brokers, who would then take a fee out of those workers’ wages. The extent to which Amazon knew about these allegations is unclear. Virginia is a right-to-work state, and, despite the Democratic Party’s recent electoral success in the state, opposition from Governor Ralph Northam looks to be one of the biggest hurdles to changing that reality.

Politico has a feature on Sara Nelson, president of the Association of Flight Attendants, who is considering a run to succeed Richard Trumka of the AFL-CIO, who is expected to step aside in late 2021. Nelson was in the national spotlight earlier this year when she called for a general strike in response to the Trump administration’s recalcitrance during the federal government shutdown.

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