BREAKING NEWS: A settlement has been reached with McDonald’s stipulating as part of the agreement that it is not a joint employer. An administrative law judge (ALJ) must now approve the deal, which lawyers for the plaintiffs vow to fight.
In a case that could have wide-ranging implications for America’s largest franchisers, McDonald’s Corp. is set to go back to court over allegations of workplace retaliation and wrongful termination at some franchise operations. At stake is the question of whether the corporation is a “joint employer” responsible for the actions of its individual franchisees.
The case was halted when National Labor Relations Board (NLRB) General Counsel Peter Robb asked the judge for a delay because the definition of joint employer had once again changed, this time in favorable terms to McDonald’s and other franchisers.
In an Obama-era NLRB ruling in the case known as Browning-Ferris, the definition of joint employer was changed from one of direct control to one of indirect control. Under the direct control definition, McDonald’s could argue that it was clearly not a joint employer responsible for localized employment decisions. Under the indirect control definition, that argument loses weight.
The Trump-era NLRB sought to change the definition back to indirect control in a case known as Hy-Brand, but the board later had to reverse itself when its own inspector general said the decision was tainted by the voting presence of one board member whose firm had worked on Browning-Ferris. Thus, indirect control is once again the ruling definition.
McDonald’s and the NLRB have been rushing to seek settlements with the plaintiff workers so as to ward off the possibility of the indirect control definition’s being enshrined in law. The case can resume any day now that the two-month delay has passed.