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On the Alert

NLRB-McDonald's settlement
ducks joint employer issue

Fast Food Workers Committee v. NLRB (DC Cir 04/22/2022)
Sent to Custom Alerts™ subscribers on 04/23/2022

The Fast Food Workers Committee and Service Employees International Union sought review of the NLRB’s approval of the settlement agreements between the Board’s General Counsel on the one hand, and McDonald’s and a group of McDonald’s franchisees on the other.

The unions' primary concern was the agreements’ failure to determine whether McDonald’s is a joint employer with its franchisees.

The DC Circuit upheld the Board, saying the Board reasonably concluded that the benefits of the settlement agreements outweighed the value of continued litigation over the joint employer issue.

The NLRB's General Counsel issued complaints alleging the franchisees violated the NLRA by threatening employees and unlawfully retaliating against them for protected union activity.

Importantly, the complaints alleged McDonald's could be held jointly and severally liable as a joint employer, even though it was not alleged that McDonald's independently violated the Act.

General Counsel, McDonald's, and the franchisees entered into settlement agreements that did not treat McDonald's as a joint employer.

The Board concluded that the absence of a joint employer finding for McDonald’s did not make the settlements inappropriate. The Board observed that the settlements placed a number of obligations on McDonald’s, even if McDonald’s was not treated as a joint employer: The 10 franchisees whose alleged violations resulted in lost earnings would pay 100% of the backpay owed to the alleged discriminatees, plus interest; those 10 franchisees would each contribute to a $250,000 Settlement Fund that would compensate discriminatees if a franchisee committed the same type of violation within nine months of the settlement’s approval.

Although the settlements did not treat McDonald’s as a joint employer, they did require McDonald’s to take certain actions to support the settlements. If a franchisee did not comply, McDonald’s would mail a notice to the employees of the franchisee stating that the franchisee violated the Act and the settlement, and that McDonald’s disavows the conduct. McDonald’s was also required to collect money for the Settlement Fund from the franchisees and deposit it with the Board.

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