McDonald’s Trump-Era NLRB Rules Face DC Circuit Review

McDonald’s Corp. will try to convince a Washington federal appeals court to reject a union’s offer to revive the unfair labor practices case against the fast food giant that started under the Obama administration and took hold under the Trump era.

Lawyers for McDonald’s and the National Labor Relations Board will be on the same side as they defend the settlement against a Service Employees International Union lawyer in oral argument Friday at the United States Court of Appeals for the District of Columbia Circuit . The deal resolved allegations that McDonald’s was jointly responsible with its franchisees in retaliation against workers who participated in the $ 15 Struggle protests.

The union’s challenge to the settlement – which required franchisees to pay around $ 170,000 and relieved McDonald’s of all liability as a “joint employer” – raises allegations that the involvement of a former Republican board member The administration in the case violated ethical rules and tainted the board’s decision to adopt the agreement.

If the appeals court relaunches the case, McDonald’s could once again run the risk of sharing responsibility for its franchisees’ labor law violations and potentially being forced at the bargaining table if a franchise restaurant unionizes.

The NLRB’s attorney general’s office filed charges against McDonald’s and several franchised restaurants in 2014. The case has become the largest ever tried by the agency, according to the administrative judge who presided over a 150-day trial in the case.

McDonald’s emailed Trump-era NLRB general counsel Pierre Robb about a month after taking over the agency’s legal arm, including continuing the employer’s joint case, in December 2017. The company asked Robb to use his “discretion to end this waste of taxpayer resources and consider “resolving the matter.

Robb’s deal was rejected by administrative judge Lauren Esposito in June 2018, suggesting that McDonald’s “deliberately delayed” the case until the NLRB was under Republican control. She called Robb’s decision to seek a settlement just before the hearing closed as “incomprehensible.”

But two Republican board members overturned Esposito in a 2-1 decision in December 2019, saying the terms were reasonable and ordering the judge to accept the settlement deal. Lauren McFerran, then the only Democrat on the board and now its chairman, expressed his dissent.

The appeal of the council’s decision by the SEIU will be brought before a three-judge panel of the DC circuit composed of Neomi Rao, one person appointed by Trump, Laurence Silberman, one person appointed by Reagan, and Judith Roger, a person named by Clinton.

Arbitrary and unethical?

The SEIU and the union’s fast food workers committee argued in a brief that the NLRB lacked substantial evidence – and violated its own procedures and precedents – when it quashed Esposito.

The board, for example, incorrectly applied a higher legal standard than it should have when reviewing Esposito’s decision, reassessing his decision from scratch rather than reviewing it for abuse of power. , the union said.

“This is arbitrary and capricious reasoning that the Court should not accept,” the SEIU said in the brief.

The union also claimed that former NLRB member William Emanuel should have recused himself because his former company, Littler Mendelson PC, was representing McDonald’s and its franchisees in the case.

Emanuel’s tenure on the board was marked by his inappropriate participation in a December 2017 decision that tightened the legal standard for determining whether a company is a joint employer of workers at another company. The NLRB withdrew this tainted decision in February 2018 and turned to developing advice and comment rules to publish employer-friendly regulations for joint work in February 2020.

In September 2020, the NLRB rejected the union’s request to reopen the case to examine new evidence showing that Emanuel should have withdrawn from the joint McDonald’s employer case.

Even if the DC Circuit does not find that Emanuel tainted the decision on the McDonald’s rulebook, it should at least send the matter back to the board of directors for it to consider new evidence of Emanuel’s involvement. the union said.

McDonald’s and NLRB agree

The NLRB defended Emanuel’s involvement in the case, noting in a brief that his former firm did not represent any of the parties in the pending litigation.

“Member Emanuel explained why he, in consultation with the ethics officer of the board’s designated agency, decided not to recuse himself,” the board said.

While McDonald’s argued in a brief that Emanuel’s participation entailed ethical requirements, the company said the DC Circuit did not have the jurisdiction to look into the matter. The union failed to meet a procedural requirement to raise the issue on appeal, and the court cannot consider an individual member’s choice to participate, the company argued.

The NLRB also said it acted within its “broad discretion” to approve the settlement agreement, which accomplished much of what winning the case would have done.

The board was under no obligation to review Esposito’s settlement decision with deference, McDonald’s argued. To require otherwise “would confuse” the appellate court’s standard of deference for reviewing NLRB decisions, the company said.

“If this Court were to adopt the petitioners’ argument, appellate courts would be forced to assess whether the Council abused its discretion in finding that the ALJ abused its discretion,” McDonald’s said.

But regardless, the NLRB’s analysis of the judge’s decision aligns with the review of abuse of discretion, the company said.

SEIU attorney Micah Wissinger of Levy Ratner PC and McDonald’s attorney Pratik Shah of Akin Gump Strauss Hauer & Feld LLP declined to comment. The NLRB did not respond to requests for comment.

The case is Fast Food Restaurant Workers Committee, et al v. NLRB, DC Cir., No.20-01516, oral argument 12/10/21.

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