Oakbrook, Illinois-based McDonald’s and the office of NLRB General Counsel Peter Robb presented the settlement to an administrative judge at a hearing in New York City, according to Reuters. The settlement must be approved by the NLRB judge.
“We are very pleased to have reached settlement of the NLRB unfair labor practice proceedings involving McDonald’s USA and various McDonald’s franchisees across the country,” a McDonald’s wrote in a statement. “The settlement allows our franchisees and their employees to move forward and resolves all matters without any admission of wrongdoing.”
In 2014, the NLRB classified McDonald’s Corp. as a joint employer, a ruling the company challenged in federal court. The board’s decision at the time followed an investigation into charges that McDonald’s and the chain’s franchisees had violated the rights of employees during pro-labor rallies for higher wages for fast-food workers. Some workers who joined the rallies said they were illegally fired, punished or threatened for participating in the protests.
Angelo Amador, vice president Labor and Workforce Policy for the National Restaurant Association (NRA) protested the decision, saying at the time “…making franchisors liable for their franchisees’ employment practices and redefining individually owned franchises as ‘big business,’ NLRB would disrupt the franchisor/franchisee relationship and impede entrepreneurship and restaurants’ ability to continue to create jobs, particularly in an increasingly challenging economic environment.”
In December 2017, in a 3-2 vote, the NLRB overturned the ruling that held franchisors and other businesses liable for labor and wage violations committed by franchisees and subcontractors. At the time the NLRB said in a statement, “In all future and pending cases, two or more entities will be deemed joint employers under the National Labor Relations Act (NLRA) if there is proof that one entity has exercised control over essential employment terms of another entity’s employees (rather than merely having reserved the right to exercise control) and has done so directly and immediately (rather than indirectly) in a manner that is not limited and routine.”
McDonald’s statement regarding the settlement continued, “Additionally, current and former franchisee employees involved in the proceedings are receiving long overdue satisfaction of their claims. As it has maintained throughout this process, McDonald’s USA is not and never has been a joint employer with its franchisees. The agreement is subject to final approval by the Administrative Law Judge. While the settlement is not yet final, we believe this is major first step in ending this wasteful multi-year litigation.”