McDonald’s beats back challenge to settlement with U.S. labor agency

By Daniel Wiessner

(Reuters) – McDonald’s Corp on Friday defeated a union-backed organizing group’s challenge to a settlement with a U.S. labor agency over claims that the company helped franchisees across the country suppress workers’ demonstrations calling for higher wages.

The U.S. Court of Appeals for the D.C. Circuit rejected claims by the group, Fight for $15, that the 2019 settlement was inadequate because it did not resolve the key question of whether McDonald’s could be held liable for unlawful labor practices by its franchisees.

Fight for $15 also argued that a member of the National Labor Relations Board (NLRB) who took part in approving the settlement had a conflict of interest and should have been recused. The D.C. Circuit on Friday said those claims were not properly presented to the court.

Illinois-based McDonald’s and the NLRB did not immediately respond to requests for comment. Nor did a lawyer for Fight for $15.

Demonstrations organized by Fight for $15 swept the country in 2012, with workers calling for minimum pay of $15 an hour. The group that year began filing complaints with the NLRB on behalf of McDonald’s franchise workers claiming they were fired or disciplined for participating in labor organizing.

The NLRB brought a case against McDonald’s and many franchisees in 2014. It was seen as a major test of the Obama-era NLRB’s attempt to expand the circumstances in which companies could be considered “joint employers” of franchise or contract workers, requiring them to bargain with unions and exposing them to liability for labor law violations.

McDonald’s has denied wrongdoing and maintained that it does not exercise enough control over franchises to be considered a joint employer.

The NLRB opted to settle the case after former President Donald Trump took office, disappointing unions and worker advocates. The settlement required more than two dozen McDonald’s franchisees to pay up to $50,000 to individual workers, but did not address McDonald’s liability.

Under federal labor law, the board can settle claims against businesses over the objections of unions or workers involved in a case.

(Reporting by Daniel Wiessner in New York; Editing by Alexia Garamfalvi and Mark Potter)