September 23, 2018

Push to Settle McDonald’s Case, a Threat to Franchise Model

McDonald’s argued in a motion that the terms were far more substantial than anything the government was likely to win in court. It noted that the settlement would save years of litigation, during which time workers would receive no monetary relief.

Micah Wissinger, a lawyer for the Service Employees International Union and affiliated groups, which helped bring the charges against McDonald’s and has been an advocate for the workers, called the proposal a sham.

“In a real settlement, McDonald’s would take responsibility for illegally firing and harassing workers fighting to get off food stamps and out of poverty,” Mr. Wissinger said in a statement after Monday’s court appearance.

The judge, Lauren Esposito, told the lawyers that she would schedule a hearing on the proposed settlement so they could air their arguments, and said the agreement would not be valid without her approval.

Nonetheless, some workers have already received portions of the specified payments, according to email correspondence between an official of the National Labor Relations Board and a union lawyer.

The board did not respond to a request for comment.

A central question in the trial is whether McDonald’s is a so-called joint employer of workers directly employed by its franchisees. A parent company is considered a joint employer if it controls their working conditions, although the legal criteria for determining control in this context has shifted in recent years.

A finding that McDonald’s is a joint employer would make the company liable for labor-law violations committed by its franchisees, and would require it to bargain with restaurant workers who unionized.

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The workers in the case asserted that their bosses at McDonald’s restaurants had disciplined them, retaliated against them and in some cases fired them for taking part in protests beginning in 2012 in which they demanded a $15 hourly wage and a union.

The general counsel of the National Labor Relations Board, at the time an appointee of President Barack Obama, investigated their charges and issued complaints against McDonald’s and its franchisees in 2014. A trial began in 2015 and continued into this year.

But in January, the labor board’s new general counsel, appointed by Mr. Trump, was granted a 60-day stay in the case — which expired Monday — to pursue settlement talks.

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The general counsel, Peter B. Robb, argued that two labor board decisions in December, one of which changed the legal standard for determining joint employment, might have weakened aspects of the case against McDonald’s and made a settlement more likely.

In his request for a stay, Mr. Robb said a settlement could “facilitate far more prompt and immediate remedial relief for the employees impacted by the alleged unfair labor practices.”

Before the December decision by the board, a parent company like McDonald’s could be considered a joint employer if it exerted indirect control over workers at a franchisee, or if it had the right to exercise control over workers that it nonetheless did not exercise.

After the board’s decision in December, a company had to have direct and immediate control over workers to be considered a joint employer.

At the time he sought a stay, labor groups argued that Mr. Robb’s logic was specious because the board’s case against McDonald’s did not hinge on which definition of joint employment applied.

Lawyers for the Service Employees International Union argued that even if the general counsel preferred to seek a settlement, it made no sense to stop the trial, which was only days from concluding, in order to do so.

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In a court filing, they argued that stopping the trial would give McDonald’s an advantage by preventing union lawyers from cross-examining a key witness, and that it fostered “a game of hide-the-ball.”

Then, last month, one of Mr. Robb’s primary arguments for a pause in the trial was upended when the labor board, on a procedural question, reversed its December decision narrowing the definition of a joint employer. At that point, the joint employer definition reverted to what it had been earlier in the trial.

Several Democratic senators, including Elizabeth Warren of Massachusetts and Cory Booker of New Jersey, stated in a March 7 letter that the board’s reversal “eliminates whatever support may have existed for your efforts to settle the McDonald’s case so near to the trial’s close.” They urged Mr. Robb to “swiftly resume and finish the trial.”

But Mr. Robb’s office pressed ahead with its efforts to reach a settlement. Last week, lawyers from the labor board’s regional offices abruptly reached out to several former McDonald’s workers involved in the case. In one instance, a labor board lawyer called a worker and asked if she “was ok with $50k” for back pay as part of the settlement, according to an email between the board and Mr. Wissinger, one of the union lawyers. The offer was conditional on the worker’s waiving her right to be reinstated in her old job.

Mr. Wissinger said that the calls created the impression that workers needed to accept the offers before they consulted with him or his colleagues or anyone else, and that at least two did.

“It was a done deal by the time we found out,” Mr. Wissinger said. “They were completely cutting us out of the process.”

Jennifer Abruzzo, who served as deputy general counsel of the labor board until 2017, said settlement discussions that excluded lawyers who backed the workers were a break with custom.

“That’s unusual,” Ms. Abruzzo said. “The charging party is the one that the regions typically go to. And the charging party in this instance is the S.E.I.U.”

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Article source: https://www.nytimes.com/2018/03/19/business/economy/mcdonalds-labor.html?partner=rss&emc=rss

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