McDonald’s Corp. said Monday it had reached a settlement in a major case with the National Labor Relations Boar over whether it was legally responsible for labor violations that franchised restaurants had been accused of.
The terms of the settlement were not released, but McDonald’s said it did not admit to any wrongdoing as part of the deal.
“While the settlement is not yet final, we believe this is a major first step in ending this wasteful multi-year litigation,” the company said.
McDonald’s was charged as a “joint employer” in 2014 in connection with 61 complaints of unfair labor practices at 31 of its franchise restaurants, meaning that it was equally liable for any violations. The move was unusual because the company did not own the franchisees, which were private businesses that rented out the company’s brand.
Joint employer refers to when one business can be held legally responsible for the workplace policies at another business. The McDonald’s case attracted major attention from business groups since it represented a potentially vast expansion of legal liability for franchisers.
Previously, the board had charged businesses as joint employers only when they had direct, day-to-day control over the other company’s workers. The NLRB had said that franchisers’ actions to protect their brands do not make them joint employers.
The settlement still must be approved by an NLRB judge.
Fight for $15, the union-run activist group whose filing had prompted the initial NLRB complaint against McDonald’s, said Monday it opposed the settlement.
“In a real settlement, McDonald’s would take responsibility for illegally firing and harassing workers fighting to get off food stamps and out of poverty,” Fight for $15 lawyer Micah Wissinger told Reuters. The Service Employees International Union has been financing Fight for $15.
Former NLRB General Counsel Richard Griffin, a former top lawyer for the International Union of Operating Engineers and the board official who filed the initial consolidated charge against McDonald’s, said at a 2015 American Bar Association forum that a Fight for $15-driven campaign was the “sole reason” why the agency is involved in the McDonald’s case.
The NLRB has since attempted to pull back on joint employer cases, last year reversing a major case called Browning-Ferris. However, the board vacated that decision last month after determining that one of its members should have recused himself, leaving the broader joint employee rule still in effect.
