NLRB is settling McDonald's joint employer case

It's back to square 1.

The NLRB's case against McDonald's (begun in November 2012) was intended to be the poster child for a new legal standard for determining when a franchisor was a "joint employer" with its franchisees. Yesterday McDonald's and the NLRB's General Counsel reached a settlement. If that's approved by the administrative law judge, then everything goes back to square 1.

Although McDonald's will not admit liability, the settlement is designed to provide 100% of back pay to the workers involved.

Meanwhile, the NLRB's legal standard for finding a joint employer is a bit up in the air. Hy-Brand Industrial Contractors (NLRB 12/14/2017) [Decision] overruled Browning-Ferris Industries, 362 NLRB No. 186 (2015) and returned to the pre-Browning Ferris standard that governed joint-employer liability. But wait! The Board vacated Hy-Brand on February 26 [PDF] because Member William Emanuel had a conflict of interest. So Browning-Ferris is still with us. But not to worry. Once the Republicans regain the majority they lost in December 2017 [which I expect to occur within a month], we will go back to the pre-Browning Ferris standard. And employers will rejoice.

Here is the NLRB press release:

"New York, NY — Yesterday, McDonald's USA, LLC and its franchisees submitted to Administrative Law Judge Lauren Esposito settlement agreements that had been negotiated by the Counsel for the General Counsel of the National Labor Relations Board. Drafts of the agreements were previously presented to counsel for charging parties for review and comment.

"McDonald’s USA, LLC asked Judge Esposito to approve the proposed settlement agreements, which are intended to provide 100% of backpay for the alleged discriminatees and represent a full remedy for all unfair labor practice cases pending before Judge Esposito, including those that were previously severed from the litigation.

"These settlements represent a full remedy for the employees who have waited since the first charges were filed in November of 2012 and, if approved, would avoid years of possible additional litigation.

"McDonald’s USA, LLC has 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 agreements."

More commentary on this:

I’m lovin’ it: McDonald’s settles joint employer case with NLRB by Jon Hyman.

Did McDonald's just dodge the joint employer bullet? by Philip Miles.