The long awaited McDonald’s trial in National Labor Relations Board joint employer case begins today. In RealClearPolicy, I discuss the less-than-transparent proceedings leading up to the trial.
In December 2014, NLRB General Counsel Richard Griffin consolidated dozens of unfair labor practice charges against McDonald’s franchisees and named McDonald’s USA, LLC, as a joint employer responsible for alleged labor-law violations of privately owned franchises all across the country.
Since the mega-consolidation and over a year’s time, the NLRB has still failed to adequately explain to McDonald’s or the public the legal reasoning behind naming the fast-food company a joint employer.
In summary, “The NLRB has sided with its own general counsel, saying he does not have to provide a bill of particulars to McDonald's USA. This would have required the general counsel to explain his rationale for naming McDonald's a joint employer and give the company the knowledge it needed to adequately defend itself at trial.”
Despite not revealing it legal reasoning behind the agency’s charges, the NLRB demanded McDonald’s release hundreds of thousands of documents about its business operations. The hypocrisy does not end there. For the public to learn of the original charges against McDonald’s, a FOIA request must be submitted. In addition, sources say, a FOIA request is required to obtain the transcript of today’s trial.
The lack of transparency is far from the only intrigue arising from the case.
The NLRB is responsible for resolving nearly all private-sector labor relation disputes. But it has become increasingly clear that the McDonald’s case takes priority and is using up an overwhelmingly large share of the NLRB’s limited resources.
The McDonald’s case docket on the NLRB website has well over 600 entries. It composes a laundry list of motions, subpoena requests, appeals, and charges. As anyone can expect, a case spanning several years and this much activity is extremely expensive. McDonald’s said that it has cost more than one million dollars just to comply with the NLRB’s excessive discovery requests. Imagine how many NLRB man hours it takes to go through hundreds of thousands of documents, and that is just a small portion of the work for the case.
Reality has sunk in. The NLRB realizes its excessive expenditures in this single case, which is more akin to a fishing expedition, means cost savings measures need to be taken elsewhere.
To that end, yesterday, the NLRB released a memo to regional directors that the agency is facing a “significant budget deficit” for the rest of the year. It directs personnel to make cost saving changes where possible. For example, print paper double-sided and single-spaced, limit travel expenses and per diems.
But most significant, the NLRB urges staff to settle disputes quickly because doing so can deliver “significant savings of agency staff and budget resources.” A “special importance at this time of budget uncertainty.”
As Steven Bernstein, a partner at Fisher & Phillips, told the National Law Journal, the memo “reads like an auto dealership that’s highly motivated to move cars off the lot at the end of the month.” Bernstein goes on to recommend that “for lawyers contemplating a settlement, now is maybe a time to be more aggressive.”
The cost of the NLRB’s case against McDonald’s is unknown, and so are the reasons behind its budget troubles (the memo doesn’t say). What is known is that the McDonald’s case has been expensive. It has spanned years and countless hours of staff time. Despite the time and money spent, the agency cannot even thoroughly explain how or why McDonald’s is a joint employer.
The NLRB cannot even claim that they using a bulk of its resources to find relief for these workers. Employee turnover at McDonald’s is over 100 percent, meaning it is highly unlikely any of the McDonald’s franchisee employees still work at the restaurants. Most have likely moved on and wouldn’t even want to be reinstated.
Congress constructed the NLRB to act as a neutral arbiter in labor disputes that represents the public interest. Now the agency is using its prosecuting powers to punish political opponents and prop up its allies.
It may even be implementing cost-savings measures—urging staff to enter into settlements—which could have detrimental impacts on workers around the country, to prosecute a long held target of labor unions. The agency is supposed to enforce the National Labor Relations Act for all workers, not just employees involved in the union-funded “Fight for $15.”