August 17, 2018

August 17, 2018

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August 16, 2018

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August 15, 2018

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NLRB Judge Rejects Proposed Settlement In McDonald’s Joint Employer Case

On July 17, 2018, a National Labor Relations Board (“Board”) Administrative Law Judge (“ALJ”) rejected a proposed settlement that would have concluded the  closely-watched consolidated unfair labor practice case against McDonald’s USA, LLC (“McDonald’s”), which has been ongoing for over three years.  The matter has drawn the interest of labor watchers, as the case hinges primarily on whether McDonald’s is a “joint employer” with its franchisees. 

In a prior blog post, we discussed Board General Counsel Peter Robb’s proposed settlement with McDonald’s and the impact of the proposed settlement moving forward, especially regarding its impact on employers that rely on the traditional franchise model.  We cautioned, however, that the proposed settlement still had to be ratified by an Administrative Law Judge (“ALJ”).

It was not.  ALJ Lauren Esposito rejected the settlement, reasoning it was not a “reasonable resolution based on the nature and scope of the violations alleged.”  Additionally, the ALJ found that the proposed settlement lacked “certain fundamental elements” and contained “limited remedial impact” that would not fully resolve the dispute.  ALJ Esposito’s decision further emphasizes that any future settlement proposal must impose some liability against McDonald’s, rather than solely against its franchisees.

Now,  McDonald’s and General Counsel Robb must determine  whether to abandon settlement discussions and prepare for what could be protracted litigation; resume settlement discussions in line with ALJ Esposito’s decision; or appeal the decision to the Board.

© Polsinelli PC, Polsinelli LLP in California

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About this Author

Henry Thomas, Employment Litigation, Benefits, Polsinelli Law Firm, Kansas City
Associate

As an associate in the firm’s Labor and Employment practice, Henry Thomas recognizes that employers face an ever-changing regulatory environment, which, if not addressed properly, has the potential to lead to legal entanglements that can impact productivity and profitability. Henry works with Polsinelli’s national team of labor and employment attorneys to provide counsel, and when needed, aggressive defense. 

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