The National Relations Labor Board Dec. 12 instructed an administrative law judge to approve settlements resolving complaints against McDonald’s USA LLC, McDonald’s Restaurants of Illinois Inc. and 29 franchisees, based on violations allegedly committed by McDonald’s Restaurants of Illinois and the franchisees.
The settlements do not impose joint and several liability on McDonald’s USA LLC as a joint employer; however, McDonald’s USA is obligated to support the remedies agreed to by McDonald’s Restaurants of Illinois and the franchisees.
The decision signals that the agency is “unlikely to hold franchisers and companies that rely on contracted labor liable for labor law violations at their subsidiaries’ workplaces without strong evidence that the parent company directly controls the workers involved,” Bloomberg Law reported.
The case. The complaints allege that, in response to Fight for $15 activity, a nationwide organizing campaign by fast food workers for higher wages, McDonald’s Restaurants of Illinois and 29 Franchisees violated the National Labor Relations Act by threatening employees, promising benefits to them, interrogating them, and surveilling their protected activity.
The complaints additionally allege three employees were unlawfully terminated and 17 others were suspended, saw their hours reduced or sent home early, all in retaliation for their union and other protected concerted activity. Although the complaints do not allege that McDonald’s independently violated the NLRA, they allege that McDonald’s “possessed and/or exercised” sufficient control over the labor relations policies of the franchisees that it is a joint employer with the franchisees and, as such, can be held jointly and severally liable for unfair labor practices committed by the franchisees.
The settlement. The NLRB general counsel and McDonald’s reached settlements that provide full back pay for allegations requiring a monetary remedy; front or premium pay to the three workers who were discharged, each of whom waived reinstatement; restoration of hours and other working conditions; rescission of alleged unlawful rules; expungement of discipline and discharges; and notice posting at the franchisees’ restaurants and mailing of the notice to former employees.
An NLRB administrative law judge had denied the motions to approve the settlement agreements. On special appeal, the board vacated the judge’s order, instructing the judge to approve the settlement agreements. The majority found that the settlement agreements provide a full remedy to all affected employees.
The decision can be found here.