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McDonald’s Labor Board Ruling Attacked on Ethics Grounds

Jan. 7, 2020, 7:59 PM

The union-allied Fight for $15 organization wants the National Labor Relations Board to reconsider a ruling for McDonald’s Corp. in one of the board’s most closely watched disputes of the decade.

The group, representing McDonald’s franchise workers who said they were retaliated against for participating in Fight for $15 demonstrations, asked the agency Jan. 7 to reconsider its ruling approving a settlement in the case. Fight for $15 lawyers said the board made “multiple material errors” and argued that Member William Emanuel (R) should have sat out the decision. They cited an internal agency document first reported by Bloomberg Law indicating Emanuel initially was slated to recuse himself from the matter because of a conflict of interest.

Emanuel joined a two-member Republican majority that ordered an administrative law judge to approve a $170,000 settlement between McDonald’s franchisees and the workers. That agreement would resolve the case without deciding the central legal question: whether McDonald’s is a “joint employer” of workers at restaurants owned by franchisees, and is therefore liable for the alleged labor violations.

Emanuel’s former law firm previously advised McDonald’s on how to handle the Fight for $15 demonstrations. The NLRB, in a footnote explaining Emanuel’s decision to participate in the case, said the firm did not represent the company in the litigation before the board.

Fight for $15 specifically urged the board to admit Emanuel’s “Supplemental Recusal List” into the NLRB case record, arguing that the document was “unavailable and undiscovered” before the final hearing ended in April 2018. The move suggests the group likely will raise the question of whether Emanuel’s participation improperly tainted the case in an eventual federal appeal.

“The union’s motion today only seeks to create additional delay into this already prolonged proceeding, which is contrary to the best interests of all parties and especially the involved franchisee employees who, under the approved agreement, would receive long overdue satisfaction of their claims,” McDonald’s said in a statement provided to Bloomberg Law. “As we have maintained throughout this process, McDonald’s and its franchisees are not joint employers, as has been the conclusion of every court that has ever considered the issue.”

The five-member NLRB currently has two open seats. Former Member Lauren McFerran, then the board’s only Democratic member, dissented from the Dec. 12 decision. Chairman John Ring (R), whose former law firm also advised McDonald’s on Fight for $15 activity, didn’t participate in the ruling.

The NLRB didn’t immediately respond to requests for comment.

Fight for $15: NLRB Misapplied Law

Ethics rules for presidential appointees require recusal in the event of an actual or perceived conflict of interest.

Republican members wrote in the McDonald’s decision that Emanuel consulted with the agency’s designated ethics official and decided recusal wasn’t necessary. He concluded that a reasonable person who understood the circumstances wouldn’t question his impartiality.

The board issued a comprehensive ethics report in November, meant at least in part to resolve conflicts questions from another case involving Emanuel. NLRB Chairman John Ring (R) concluded generally in the report that members can override the advice of the NLRB’s designated ethics officer in the “unusual circumstances” that the member disagrees with the officer’s position on recusal.

Fight for $15 representatives said in their latest motion that the board misapplied federal labor law in approving the settlement, and should reconsider the case entirely. They also want to know why Emanuel was apparently set to recuse himself initially, but then decided to participate in the case.

“Emanuel should’ve never participated in this decision, that’s the big point of out motion for reconsideration and to reopen the case,” said Micah Wissinger, one of the attorneys on Fight for $15’s litigation team. Wissinger is a partner at Levy Ratner, P.C. in New York.

The NLRB in its ethics report said that members’ recusal lists are sometimes updated without their knowledge. Management-side attorneys have also come to Emanuel’s defense, saying ethics officials “weaponized” the rules to avoid case decisions where they had political disagreements.

Fight for $15 lawyers argued in their motion that new protocols outlined in the ethics report shouldn’t be relied on to deny their petition because their recusal requests “had been pending for over a year when the Report issued.”

“The required outcome upon reconsideration of the December 12, 2019 ruling is Member Emanuel’s recusal from this case,” they said.

To contact the reporter on this story: Hassan A. Kanu in Washington at hkanu@bloomberglaw.com

To contact the editor responsible for this story: Chris Opfer at copfer@bloomberglaw.com

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