SEIU Resists McDonald’s Settlement

Mar 26, 2018 - 3:45pm

Executive Director, Labor Policy

bloomberg_mcdonalds_flags_800px.jpg

McDonald's flags waving above a store.
Photo credit: J.B. Reed/Bloomberg.

A significant case at the National Labor Relations Board (NLRB) involving the McDonald’s Corporation has taken a new turn that could lead to a settlement that may be pretty worrisome for the Service Employees International Union (SEIU). 

The NLRB’s General Counsel and McDonald’s told an administrative law judge on March 19 that they had agreed on the terms of the settlement.  The agreement reportedly included a provision that would avoid labeling McDonald’s Corporation as a joint employer of workers at independent franchise restaurants operating under the company’s brand. 

That provision would affirm McDonald’s legal separation from its franchises and lessen the likelihood that the company would be held liable for alleged violations of labor law at franchises, which are typically owned by small businesses. Such a result would undermine the SEIU’s multi-year campaign against McDonald’s for which the union has “invested” millions of dollars.

As observers of labor policy know, the SEIU has been the driving force (and principal funder) of a front group—the so-called worker center Fight for $15—that has targeted McDonald’s since 2012. In the ensuing years, the Fight for $15 has waged a campaign ostensibly to pressure McDonald’s into forcing its franchises to pay an inflated minimum wage of $15 per hour. The real prize for the SEIU, though, was the prospect of forcing those franchises to accept unionization, which would potentially provide the union with tens of millions of dollars in additional revenue from dues and initiation fees—hence the SEIU’s investment.

The campaign against McDonald’s included the typical activities associated with union organizing drives, such as raucous demonstrations full of street-theater and protests outside of McDonalds’ shareholder conventions. Likewise, it also included using the levers of government to apply pressure, and sympathetic officials in the Obama NLRB were happy assist.

The Fight for $15 filed dozens of complaints on behalf of workers at McDonald’s franchises in 2012, and the NLRB General Counsel at the time, Richard Griffin, gladly prosecuted the case in the hopes of declaring McDonald’s to be a joint employer of the workers in question.  For their part, the NLRB Board members eased the way for such a finding by radically altering the legal standard for joint employment in the deeply flawed 2015 Browning-Ferris decision. 

Despite those efforts, the McDonald’s case slowly meandered through the NLRB’s adjudication process past the end of the Obama administration.  Meanwhile, Richard Griffin’s term expired in November 2017, and he was replaced shortly thereafter by Peter Robb, who seemingly does not share Griffin’s zeal for distorting the law.

The news that Robb had reached a settlement with McDonald’s signals to many that he does not intend to employ Griffin’s expansive—and legally dubious—theory of joint employment.  Not the least among those who noticed was the SEIU and its allies, which predictably issued fraught statements objecting to the settlement. 

In a statement, the NLRB said the settlement “would avoid years of possible additional litigation” and deliver a “full remedy” for the employees in the cases.  Of course, that outcome is of little use to the SEIU, which has failed to sign up new members in its extensive campaign.  Unfortunately for the union, if the settlement goes through, it may soon realize that its multi-million dollar investment didn’t pay the dividends it had hoped for.

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Executive Director, Labor Policy