An administrative law judge (ALJ) has rejected a proposed settlement by McDonald’s over a franchise employees’ lawsuit claiming they were terminated for advocating for a $15-an-hour wage.

mcdonalds-tries-to-avoid-joint-employer-labelThe ALJ — Lauren Esposito in New York — ruled that  “the proposed informal settlements are not a reasonable resolution based on the nature and scope of the violations alleged and the settlements’ limited remedial impact.”

“Fight for $15” is the name of the group for which the plaintiffs demonstrated against McDonald’s franchises starting in 2012. It is also the group behind the lawsuit.

At issue is the definition of joint employer. Throughout the lawsuit, McDonald’s has rejected the claim that, as a franchiser, it is responsible for the employment actions of its franchisees. The settlement it proposed also rejected the joint employer tag.

Now it’s back to ground zero, with the shadow of the Obama-era joint employer definition — that of “indirect control” — coming into the forefront again.  That National Labor Relations Board (NLRB) standard was set forth in its decision in a 2015 case known as Browning-Ferris, which eventually formed the basis of the McDonald’s lawsuit.

The NLRB, now in Republican hands, tried once before to rework the previous administration’s take on joint employment and return to the longstanding “direct control” definition. In December 2017, the Trump board thought it had done just that in a decision known as Hy-Brand, but it was forced to withdraw the ruling later because of a conflict of interest by one voting board member. It recently announced it would address the joint employer standard through rulemaking.

As a result of the judge’s decision, the lawsuit could be revived, but many think the NLRB general counsel will simply refer the matter to the full board for review, at which time the three Republican members could vote to overturn the ALJ. McDonald’s Corp. also said it was considering an appeal to the NLRB.

That still would not settle the issue of what comprises a joint employer relationship, so look for the NLRB to move forward with its rulemaking option, which it promised to do this summer.