Dive Brief:
- A National Labor Relations Board (NLRB) administrative law judge has rejected a settlement between the agency and McDonald's that would have resolved a high-profile joint-employment lawsuit, according to various media reports.
- The terms of the settlement weren't previously disclosed, but the fast-food company maintained that it is not, and never was, a joint employer of its franchisees' workers. The lawsuit, initiated during the Obama administration, stemmed from franchise employees' claim they were fired for advocating for a $15 per hour minimum wage.
- The agreement seemed unlikely to resolve the case, the judge said, adding 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."
Dive Insight:
The McDonald's case is an important piece in the ongoing joint-employment debate. President Trump's NLRB has been working to undo the employee-friendly Browning-Ferris standard, so far without success. Most recently, it announced that it will address the issue via rulemaking "by this summer."
Browning-Ferris put franchising and similar arrangements in jeopardy, and the McDonald's case had the potential to serve as a test. NLRB likely wanted to avoid that option, Bloomberg reported, preferring to settle the case and set a new standard another way.
The parties have multiple options but, according to several experts, the general counsel's office most likely will appeal the decision to the Board; the republican members have a majority, as well as an interest in resolving the suit via settlement to pave the way for the rulemaking.
