Labor Board Looks to Settle McDonald’s Joint Employer Case

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By Chris Opfer and Ben Penn

The National Labor Relations Board is looking to settle a high profile lawsuit against McDonald’s USA LLC in which board attorneys previously said the fast food giant should be on the hook for possible labor violations by franchisee restaurant owners.

NLRB General Counsel Peter Robb (R) Jan. 17 asked an administrative law judge to pause the case against McDonald’s and various franchisees so they can discuss settling the lawsuit, according to a copy of the motion obtained by Bloomberg Law. The board, under previous general counsel Richard Griffin (D), had argued that McDonald’s was a joint employer of franchisee workers claiming their bosses interfered with the workers’ right to organize and retaliated against them for participating in walk-outs and demonstrations.

Robb told the ALJ that the board’s lawyers are already in discussions about a “global” settlement of “all pending charges” against McDonald’s and its franchisees.

The move comes weeks after the five-member NLRB in a separate case scrapped an expanded approach to joint employment, in which the board had said a business may be considered a joint employer if it exerts only indirect control over workers. The board reverted to a stricter standard that focuses on direct control.

The McDonald’s case has been closely watched as a test of the expanded joint employer approach, but board lawyers argued that the company should be liable under the direct control test. That’s because of how the company uses technology to impose brand management standards on its franchisees.

An NLRB spokeswoman confirmed that the NLRB filed the motion to stay the proceedings. The Service Employees International Union has filed a motion opposing the NLRB’s request to pause the case.

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