NLRB Says McDonald’s Not Responsible For Franchise Treatment of Workers

From NPR News Online:

McDonald’s should not be held responsible for the labor practices of its franchisees, the National Labor Relations Board ruled on Thursday.

The federal agency, in charge of enforcing U.S. labor law, delivered the latest ruling in a years-long union case that sought to hold the fast food chain liable for the treatment of all workers at both corporate and franchise locations. The agency, also known as NLRB, directed a federal administrative law judge to approve a settlement that had earlier been reached between McDonald’s, its franchisees and the workers who had alleged labor-law violations.

The case was closely watched because it had potential implications for a vast array of companies that rely on franchising and contracting for work, such as janitorial services, trucking, construction and warehousing. The NLRB ruling is expected to face an appeal.

The long and bitter litigation began in 2015, when the Service Employees International Union accused McDonald’s and its franchisees of retaliating against hundreds of workers who supported the Fight For $15 labor movement. For example, workers alleged that they were assigned harder tasks or fewer hours after they attended union-backed protests demanding higher wages.

The government’s labor-law prosecutor at the time asked the judge, Lauren Esposito, to review the complaints and consider McDonald’s a “joint employer” of franchisees accused of violating labor laws.

But under a new administration, the NLRB lawyer last year abruptly proposed a settlement with the affected workers — days before the conclusion of the three-year trial. Esposito rejected the proposal, calling it “manifestly unreasonable” and “simply baffling.”

On Thursday, an NRLB panel overruled the judge and instructed her to approve the settlement deal.

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McDonald’s Announces It Will No Longer Lobby Against Minimum Wage Hikes

From today’s CNBC News Online:

McDonald’s will no longer take part in efforts to lobby against raising the minimum wage at the federal, state or local level, the fast-food giant told the National Restaurant Association Tuesday. 

Genna Gent, McDonald’s vice president of U.S. government relations, said in a letter to the association that the company believes wage increases “should be phased in and that all industries should be treated the same way.”

“The conversation about wages is an important one; it’s one we wish to advance, not impede,” Gent wrote. The fast-food chain also stated that outlets owned by the company have an average starting wage that exceeds $10 per hour while franchisees pay “likely similar” wages in their own restaurants.

A McDonald’s spokeswoman declined to comment further to CNBC. Politico was the first to report the news of the letter. 

The move from McDonald’s, one of the largest employers in the world, could boost House Democrats and their efforts to raise the minimum wage. Earlier this month, the House Committee on Education and Labor advanced a bill to raise the U.S. wage floor to $15 per hour by 2024. Currently, the minimum wage is $7.25.

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Deadline Is Today in McDonald’s Labor Case That Could Affect Millions

From today’s New York Times:

The Trump appointee charged with enforcing federal labor rights is scrambling to head off a court ruling in a case against McDonald’s that could redefine the accountability of companies for the labor practices of their franchisees.

The official, the general counsel of the National Labor Relations Board, has been exploring settlement terms with workers at the center of the board’s complaint against McDonald’s, according to lawyers involved in the case. A judge had halted the trial until Monday to give the agency a chance to do so.

If no settlement is reached and the judge were to rule against the company, the decision could have enormous implications for the franchise business model, affecting millions of workers in the fast-food industry and beyond. Corporations could be required to bargain with unionized workers at disparate franchise locations.

The National Labor Relations Board did not respond to a request for comment. A McDonald’s spokeswoman said that “settlement discussions are a normal part of any litigation process.”

The case was brought during the Obama administration, when the board was under Democratic control. Since President Trump’s election, Republican members have regained a majority, steering the board away from a pro-labor orientation.

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