McDonald’s Joint Employer Appeal Has Been Denied by the NLRB

An appeal of a joint employer settlement favoring McDonald’s Corp. was denied late Wednesday by the National Labor Relations Board, which has been accused by the Democratic House Chair of the Committee on Education and Labor of hiding documents that could prove misconduct by the labor board.

The committee is looking for documentation surrounding a December ruling in which the board voted that McDonald’s should not be held liable for violations committed by franchisees. The case was a major win for franchisors and resulted in a $171,636 payout from McDonald’s franchisees to workers. The lawsuit was filed by nearly two dozen workers who felt they were targeted because of attempts to unionize.

Now, the ethics of board member William Emanuel are in question. During the court proceedings, he was asked by the workers’ lawyers to remove himself from the case because he worked for a law firm that assisted McDonald’s franchisees in seeking legal advice in response to protests by employees. 

On Wednesday, the board denied the workers' attempt to revisit the December ruling, stating they "have not identified any material error or demonstrated extraordinary circumstances warranting reconsideration."

The workers plan to appeal the decision in federal court. 

"[Wednesday's] ruling is not surprising in the least for a board that has been doing McDonald’s bidding ever since President Trump took office," Micah Wissinger, attorney for the McDonald's workers, said in a statement ... In the meantime, we’re confident Congress will get to the bottom of the shenanigans between the Trump administration and McDonald’s and we’re eager to see what [Tuesday's] subpoenas turn up."

The committee is also investigating Emanuel’s involvement in the board’s February decision to clarify the joint employer rule. The updated rule said a business “must possess and exercise substantial direct and immediate control over one or more essential terms and conditions of employment of another employer’s employees.” The definition substantially shields franchisors from being held liable for labor violations committed by franchisees. 

This new appeal comes just a week after a federal judge decided to overturn the Trump Administration’s December redefinition of “joint employer.” That rule, passed by a board that includes three Trump appointees and one Democrat, overturned an Obama-era decision in 2015 that declared a franchisor only needed to have indirect control or reserve the right to control to qualify as a joint employer, even if the control was never exercised. The Trump administration has worked to narrow a joint employer’s responsibility in such cases.

Committee Chairman Rep. Robert Scott said in a letter that the board’s refusal to hand over certain documents indicates it has something to hide. He also noted that the McDonald’s case and joint employer rulemaking are “likely gained by a defective process.”

“The Committee is left to conclude that the NLRB’s sole motivation for refusing to produce requested documents is to cover up misconduct,” Scott wrote in the letter. In response, the board claims Emanuel’s participation in either case didn’t violate ethical standards. 

Edwin Egee, spokesman for the board, responded in a statement, “To the contrary, the Board has protocols in place to ensure that Members do not violate their ethical obligations. Those protocols were not violated in either the Joint Employer Rulemaking or McDonald’s.”

As the Joint Employer saga continues to frustrate the franchise community, the International Franchise Association (IFA) and other groups have pushed to stop this constant back and forth by having Congress set a definition as law, which would prevent a rewrite of the definition every time control of the White House should shift from one political party to another.