McDonald’s NLRB policy is of little concern to DC Cir. (1)

McDonald’s Corp. seems likely to escape further litigation over a contested National Labor Relations Board settlement that released the fast food giant from joint liability for unfair labor practices by its franchisees.

During Friday’s oral argument before a three-judge panel of the United States Court of Appeals for the District of Columbia, two judges wiretapped by Republican presidents appeared to have no fault with NLRB officials in resolving, over the objections of an administrative law judge, a case that was initiated by the agency’s top lawyer under the Obama administration.

A DC Circuit ruling rejecting the Service Employees International Union’s attempt to reopen the case would likely end what was once seen as a potential existential threat to the franchise model. A ruling against McDonald’s could have made him responsible for the conduct of franchisees and possibly forced him to the bargaining table if a franchise restaurant had unionized.

The NLRB’s general counsel alleged in 2014 that McDonald’s jointly employed workers who had faced reprisals for participating in the $ 15 Struggle protests in search of better wages and union representation. The case has become the largest ever tried by the agency, according to the administrative judge who oversaw the 150-day trial in the case.

After the Trump administration’s NLRB general counsel took over the case, he negotiated a settlement that cost franchise restaurants about $ 170,000 in retro-pay to affected workers. McDonald’s did not incur any liability or admit any wrongdoing under the deal.

In 2019, two Republican members of the NLRB overturned an administrative judge’s order dismissing the settlement agreement in a 2-1 decision.

The SEIU and the union’s fast food workers committee challenged the DC Circuit board order. The panel of three judges responsible for the case is made up of Neomi Rao, one person appointed by Trump, Laurence Silberman, one person appointed by Reagan, and Judith Roger, a person named by Clinton.

Abuse of discretion?

McDonald’s lawyer, Pratik Shah Akin Gump Strauss Hauer & Feld LLP, defended the settlement agreement, saying the aggrieved workers would not have obtained a dime more from a full judgment against the company and its franchisees.

But the union lawyer, John west de Bredhoff & Kaiser PLLC, argued that the NLRB improperly agreed to a deal that allowed McDonald’s to get away with it unscathed despite overwhelming evidence showing it was coordinating and leading the franchisees’ anti-union tactics.

Part of the board’s flawed decision-making is that it applied the wrong standard when reviewing the decision of the judge who rejected the deal, re-evaluating it from scratch instead of one. a more deferential standard that seeks abuse of discretion, West said.

Rao asked why the board would be bound by a particular standard of review for decisions of administrative law judges.

“The council ultimately has statutory authority – the ALJs only decide affairs because they have some delegated authority from the council,” Rao said. “They have no independent authority to decide the regulations.”

Silberman said the NLRB relies on judges’ credibility determinations on testimony, but not on broader questions of law or policy.

Silberman called the Trump-era attorney general’s choice to settle the case and the board’s decision to approve the deal as one of the political preferences, which always change when partisan control l agency changes.

“Isn’t that exactly why Biden fired the attorney general,” Silberman said of the president’s sacking of the agency’s top lawyer under the Trump administration.

Ethical claims

The SEIU lawyer also argued that the board’s decision on the settlement was invalid because then NLRB member William Emanuel should have recused himself due to his former firm’s involvement. , Littler Mendelson PC, in the underlying dispute.

Littler Mendelson, the nation’s largest employer-side labor law firm, has been hired to advise McDonald’s franchisees on how to counter the Fight for $ 15 movement.

Rao and Silberman seemed cold in the face of this argument, each claiming that challenging Emanuel’s participation should have gone through an assertion that there had been a violation of due process, which the union did not raise.

Rogers, the third member of the judicial panel, appeared concerned that Emanuel may have created an appearance of impropriety by participating in the case, which would violate government ethics rules.

But NLRB attorney Joel Heller said Emanuel did not break those rules because Littler Mendelson was not representing any party in the McDonald’s case at the NLRB.

The case is Fast Food Workers’ Committee c. NLRB, DC Cir., No.20-01516, oral argument 12/10/21.

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