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.

Read the complete article here.

Labor Board Reverses Ruling That Helped Workers Fight Large Chains

From today’s New York Times:

The National Labor Relations Board on Thursday overturned a key Obama-era precedent that had given workers significant leverage in challenging companies like fast-food and hotel chains over labor practices.

The ruling changes the standard for holding a company responsible for labor law violations that occur at another company, like a contractor or franchisee, with which it has a relationship.

The doctrine also governs whether such a corporation would have to bargain with workers at a franchise if they unionized, or whether only the owners of the franchise would have to do so.

While most labor law experts expected the labor board, which gained a Republican majority only in late September, to overturn the board’s so-called joint-employer decision from 2015, the speed of the change came as a surprise to many.

“Frankly, it’s shocking,” said Wilma B. Liebman, a former Democratic appointee on the board who once served as its chairwoman.

The board’s 3-to-2 vote, along party lines, restores the pre-2015 standard, which deemed a fast-food corporation a joint employer only if it exercised direct and immediate control over workers at the franchise, and in a way that was not limited.

Employer groups had been agitating to undo the standard that was set under President Barack Obama almost from the moment it was decided, and they applauded the decision on Thursday.

The key question in determining whether a company, like a fast-food corporation, is a joint employer of workers employed by another company, like one of the chain’s franchisees, is the degree of control exercised by the corporation over workers at the franchise. The ruling on Thursday declared that such control must be direct.

Under the Obama-era doctrine, the fast-food corporation could be held liable for labor violations that occurred at the franchise even if the control it exerted was indirect — for example, if it required the franchisee to use software dictating certain scheduling practices — or if it had the right to exercise control over workers that it nonetheless didn’t exercise.

The reversal could have important implications for the ability of workers to win concessions from employers through collective bargaining. In many cases, a contractor or franchisee has such low profit margins that it could not afford to raise wages or improve benefits even if it wanted to.

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N.L.R.B. Ruling Holds McDonald’s, Not Just Franchisees, Liable for Worker Treatment

From today’s NYT by Steven Greenhouse:

The general counsel of the National Labor Relations Board ruled on Tuesday that McDonald’s is jointly responsible for workers at its franchisees’ restaurants, a decision that if upheld would disrupt longtime practices in the fast-food industry and ease the way for unionizing nationwide.

Richard F. Griffin Jr., the labor board’s general counsel, said that of the 181 unfair labor practice complaints filed against McDonald’s and its franchisees over the last 20 months, he found that 43 had merit on such grounds as illegally firing or threatening workers for pro-union activities.

In those cases, Mr. Griffin said he would include McDonald’s as a joint employer, a classification that could hold the fast-food company responsible for actions taken at thousands of its restaurants. Roughly 90 percent of the chain’s restaurants in the United States are franchise operations.

McDonald’s said it would contest the decision, warning that the ruling would affect not only the fast-food industry but businesses like dry cleaners and car dealerships.

Read the entire article here.