NLRB Orders Approval of McDonald’s Settlements, Avoids Joint Employer Designation

The National Labor Relations Board has ordered the approval of settlements of complaints that the Board’s General Counsel issued in 2014 under the Obama administration in which the GC had sought to hold McDonald’s liable, under a joint employer theory, for various unfair labor practices against the franchisees’ employees in connection with the Fight for $15. In so doing, the Trump Board retreated from the Obama Board GC’s assertion of joint employer status.

In 2018, the Board’s General Counsel and McDonald’s presented settlements in McDonald’s USA, LLC resolving the unfair labor practices. The settlements were denied by an administrative law judge (ALJ), who found that the settlements did not provide sufficient remedies for a joint employer finding, as had been previously sought by the General Counsel. On appeal, the Board ordered the ALJ to approve the settlements, which provided an immediate remedy for every substantive violation alleged in the complaints (i.e. that in response to employees’ advocacy for a higher wage, the employers threatened employees, promised benefits to them, interrogated them, and surveilled employee activity protected under the National Labor Relations Act).

Of particular interest, the Board addressed the joint employer issue by noting that the relief provided would be the same, other than a broader notice-posting requirement. It also stated that settlement involves compromise, and that it does not require “full remedy” in the context of a settlement. But, of more significance, the Board went on to observe that “the General Counsel’s stated purpose in filing the complaints was ‘to clarify the relationship between franchisor and franchisee’ under Board joint-employer law.” The Board noted, however, that it had generally not held franchisors and franchisees to be joint employers. Moreover, it stated that its proposed rule on joint-employer status may render this case moot, as the standards set forth in a final rule (which is anticipated in the near future) would supplant any joint-employer standards issued in this case. The actions of the Board in this case strongly reiterates its intention to retreat from the expansive interpretation of joint employer status under the Obama administration.