In a television commercial that’s become part of the lore surrounding
He was talking about New York, not Washington. Yet some 17 years after he suggested that alliance in a spot for the “Big ’N’ Tasty” sandwich, President Trump’s appointees are poised to deliver a high-stakes political victory for McDonald’s in one of the most important labor disputes in decades.
Labor- and management-side lawyers expect the national board that referees unionization drives to issue a crucial decision soon related to alleged illegal firings of pro-union McDonald’s workers. Trump’s appointees to the board could effectively relieve the company of responsibility. Such a victory, which eluded McDonald’s during Obama’s presidency, could help the fast-food giant close a bruising chapter in its history that imperiled its valuable brand as well as the franchise structure it’s built on. Separately, top administration officials, including acting White House Chief of Staff
Since January 2017, Trump’s administration has pursued a pro-business agenda that has eroded many protections for labor. Trump
“President Trump has made deregulation a priority across the administration, which has helped unleash unprecedented economic and job growth,” White House spokesman
There’s no evidence that Trump has personally intervened in the NLRB’s McDonald’s case. Regardless, the case stands apart—both in terms of its history and its potential repercussions.
During a messy, multi-year saga, the company became a focal point in the “Fight for $15” movement to increase pay and unionize fast-food workers, among others. As protests engulfed McDonald’s restaurants, a corporate team responded by organizing a central effort to help franchisees push back against the union, according to evidence submitted in the case. Workers eventually complained to the NLRB, alleging that the tactics franchisees used amounted to illegal retaliation for engaging in federally protected union activities. In 2014, the board’s general counsel found enough merit in the workers’ claims to issue formal complaints against a group of franchisees, complaints that also accused McDonald’s of acting as a “joint employer” with them. McDonald’s and the franchisees have denied any illegal retaliation or other unfair practices. The board has yet to rule on the complaints.
In a statement, McDonald’s Corp. called the allegations baseless. The company argues that it can’t be legally held responsible for decisions of its franchisees, who run more than 90% of McDonald’s restaurants and set their own wages and hiring practices. Worker advocates say the company exercises enough control over franchisees—and workers—to share liability for any labor violations.
Now, after five years of legal wrangling, McDonald’s may prevail. Last month, Trump’s appointed NLRB chairman—who came from a law firm that has worked for McDonald’s—
A pro-McDonald’s outcome stands to eliminate an existential threat that has hung over the chain’s low-wage, non-union business model since 2014. It would also represent a setback for the Service Employees International Union, which
“It’s going to take a lot more than a politically motivated decision on behalf of a Trump administration doing McDonald’s bidding to stop the workers of the Fight for $15,” Henry said in a statement.
The expected decision would also mean that the corporation’s moves to help resist the protests and unionization effort will have received, more or less, tacit acceptance from federal regulators. Those tactics, which were discussed by and, at times, coordinated by regional executives of the company, included gathering intelligence from a cashier who attended a union meeting as a mole, circulating names of suspected pro-union workers and coaching a franchisee on how to avoid hiring union sympathizers, according to excerpts from thousands of previously unreported documents and internal emails. The documents, which were provided to the NLRB by McDonald’s and several franchisees under a federal judge’s subpoena, reveal an inside look at how McDonald’s corporate staff members worked with franchisees on strategies to fight the union.
McDonald’s didn’t respond to specific questions about several allegations, but said in its statement that the case is “incredibly complex” and that the “evidence is vast and complicated, and requires significant context to accurately and responsibly consider.” The company took issue with Bloomberg’s summary of that evidence, saying, “What you have highlighted are selective allegations and asserted them as facts, when there has been no judicial decision or review.”
Last year, an administrative judge for the NLRB found in a ruling that the case contains “copious evidence pertinent to McDonald’s activities in order to provide resources and support for its franchisees throughout the country in response to the Fight for $15 campaign.” Specifically, Judge
The joint-employer question at the heart of the NLRB case carries profound implications. In 2015, in a different case that didn’t involve McDonald’s, the NLRB issued a ruling that would make it easier to hold companies accountable for franchisees’ mistreatment of workers. By 2017, that issue was seen as so dire—not just for McDonald’s, but for franchise operations generally—that the then-chair of the International Franchise Association
While fighting McDonald’s at the NLRB, the union has opened other fronts too, arguing the company should share any liability for a range of
Last month, amid that latest rash of allegations, the company
But in time, overseeing the company’s reversal of fortune in Washington—and preserving the liability buffer between the corporate headquarters and the franchisees—may be viewed as Easterbrook’s most lasting impact.
As its struggle with the union continued, this March McDonald’s
In its statement, the company said it has “made significant investments in our people practices to provide employees at both McDonald’s corporate-owned and franchise locations with opportunities for competitive wages, education and safe and respectful workplaces.”
Average starting pay at its corporate-owned restaurants is $10 an hour, the company said—well above the federal minimum wage of $7.25 an hour but well below the fought-for $15. The average starting wage equates to $20,800 over a year’s worth of 40-hour weeks. “While franchisees control wages in their restaurants, we believe they are similar and competitive,” the company said.
Most people remember
About 90 percent of McDonald’s 14,000 U.S. restaurants are franchises, a structure that keeps the company relatively asset-light and low-risk. The Trump administration is working on
The structure also makes it nearly impossible for workers at franchised restaurants to win the right to bargain collectively with McDonald’s executives—unless the NLRB determines that the corporation is indeed the workers’ “joint employer.” Without that, or a negotiated deal between the company and the union, any organizing effort would have to take place in pieces, franchise by franchise. The risk that the corporation could simply drop any unionized franchise would make that even harder to accomplish.
Over the years, the company has weathered its share of public relations challenges. French anti-globalization radicals bombed its restaurants. Animal-rights extremists distributed “Unhappy Meals” with a plastic chicken covered in fake blood. The 2001 book Fast Food Nation tied McDonald’s to the obesity epidemic. But the Fight for $15 movement took place on a scale the company hadn’t seen before.
Beginning in 2012, in the wake of the Occupy Wall Street demonstrations, a union-backed drive immersed McDonald’s restaurants in street protests that eventually spread globally. Protesters jammed drive-thrus, chanted in restaurants, banged on windows and stood atop tables.
Corporate executives monitored developments as managers helped orchestrate a years-long anti-union response across the U.S., according to an analysis of thousands of pages of documents filed in the national labor board’s case. In 2014, the NLRB’s general counsel alleged that the company’s subsidiary, McDonald’s USA LLC, was liable as a joint employer for a nationwide pattern of anti-union activity that included franchisees making threats, conducting surveillance, cutting work hours and firing workers who sought better pay and working conditions.
Signs of unionizing efforts began emerging in October 2012, as reflected in a memo about organizing activity that circulated via McDonald’s internal email. “Seems to be affiliation with Occupy Wall Street movement,” said the document, which was in an email from a senior director of human resources. Soon, notes about the union showed up on an internal McDonald’s “activity log.” Said one entry: “White male talking to employees about affordable housing and asking questions about pay. Repeatedly in restaurant.”
After word of an upcoming union meeting surfaced, a cashier at one New York City McDonald’s acted as a mole for the company, records show. She attended the meeting in Harlem, and by the next day, she shared her findings: About a dozen workers signed up to be union leaders, a report on the incident said.
“They said McD makes $Billions + only pay minimum wage,” the worker reported. “… Focus seems to be on young, attractive female cashiers that speak English well ….”
On Nov. 29, 2012, the Fight for $15 campaign made its first public splash with protests at fast-food restaurants across New York City as workers at McDonald’s and other chains went on strike for the day. From there, protests spread nationwide, fueled by old-school organizing and social-media messaging. At the time, McDonald’s had only a sparse social-media team and had yet to match the union in that capacity, according to two people familiar with the company’s operations.
The company created fast, effective communications channels with franchisees to discuss the union’s activities. In emails and text messages, its managers made plans to combat “the opposition” and emphasized that some messages needed to be secret.
“There is a sense of urgency regarding the gathering of this intel so that we can plan and prep the operators …,” said one email from a human resources director. “As a tip, you can text your operators regarding this message, however you have to instruct them to ERASE the message and response back to you, and you will need to do the same.” McDonald’s didn’t respond to questions about why recipients were advised to erase messages.
In addition to a cadre of labor lawyers and several public relations firms, McDonald’s worked with “union avoidance” strategists, records show. In one case, a regional executive shared with a franchisee strategies on how to identify and avoid “salts,” or people who try to get hired in order to help organize a workplace. Federal law restricts the organized avoidance of such hires.
Corporate employees circulated names of workers thought to be supporting the union. Once, in 2013, the company dispatched a “mobile security detail” to several Manhattan franchisees’ restaurants after receiving what an internal email described as “intel” about a possible Fight for $15 rally. The company told Bloomberg News that at times “security may be necessary on-site at restaurants for the safety of our property, customers and/or employees.”
More than once, a regional McDonald’s executive organized gatherings in downtown Chicago for franchisees to discuss the situation, internal emails show. Their choice of venue? A Ronald McDonald House, part of the nonprofit foundation whose stated mission is to “improve the health and well-being of children and their families.”
Since the unionization drive began, dozens of workers have filed complaints with the NLRB alleging elements of an anti-union culture in McDonald’s restaurants. Emmanuel Flores, 28, told Bloomberg he saw just such a culture firsthand at a company-owned restaurant in Monterey Park, California.
Flores said he endured months of lewd comments, sexual overtures and groping from supervisors and co-workers. Early this year, on the advice of a union organizer, he told his store manager about it.
The next day, Flores said, his shift hours were cut. Days later, during an informal staff meeting with him and other workers, the manager compared union activists to “leeches” and said “that even if we got paid $15 an hour, it wouldn’t matter because she would cut our hours,” Flores said. Flores filed complaints with California officials and the EEOC, and he was named as a witness in a retaliation complaint that the union filed with the NLRB.
Trump’s fondness for McDonald’s is no secret. During his 2016 campaign, it was part of his standard fare; one order consisted of “two Big Macs, two Fillet-O-Fish, and a chocolate malted,’’ wrote his former campaign aides
McDonald’s soon met with senior members of the new administration. In July 2017, Trump’s first labor secretary,
McDonald’s said it hosts both Democrats and Republicans for such Washington meetings. “The company traditionally invites officials from the current administration to discuss topics relevant to the business—and did the same during the Obama administration,” the company said.
Once Trump’s appointees began taking office, McDonald’s sought to end its long struggle at the NLRB. In December 2017, a lawyer for the company emailed a letter to the board’s new general counsel,
“Our request is straightforward,” said the McDonald’s letter, a copy of which was reviewed by Bloomberg News. “We ask that you use your prosecutorial discretion to end this waste of taxpayer resources and consider what your predecessor would not consider—a global resolution of the underlying unfair labor practice allegations.” The lawyer asked for a resolution that would not designate McDonald’s a “joint employer.”
Within a few months, the
The White House in effect aided McDonald’s in other ways. According to people who’ve worked in the administration, Acosta drew Mulvaney’s ire for dragging his feet on Labor Department rule changes, including making the agency’s “joint employer” standard more lenient. Colleagues thought Acosta was too concerned about provoking congressional Democrats, according to two people familiar with the situation. Trump’s aides repeatedly pressed Acosta’s staff during White House meetings about the status of the rules—and Mulvaney
Mulvaney tends to get more involved in policy than previous chiefs of staff because of his dual role as White House budget director, according to a White House official who spoke on background. When his Office of Management and Budget pushes back on an agency’s work, it’s for good reasons, the official said.
At the NLRB, Trump appointees have attempted to defang the joint-employer threat, despite encountering
Meanwhile, Robb has asked board members to overturn the judge’s rejection of his proposed McDonald’s settlement. Union advocates lodged a formal petition with the board, arguing that
On Nov. 19, the board’s Trump-appointed chairman,
Ring’s unusual “ethics recusal report” last month concluded that each NLRB member can “insist on participating” in cases even if federal ethics officials say otherwise. While the ethics officials’ decisions may be binding, they’re not “self-enforcing,” the report found. So NLRB board members can overrule them simply by disagreeing with their legal conclusions, Ring wrote. He didn’t respond to a request for comment.
The McDonald’s case has generated 21,000 pages of trial transcript, with testimony from more than 100 witnesses. Judge Esposito called it “the largest case ever adjudicated by this agency.” The prospect that the union will appeal any decision favoring McDonald’s suggests that it could go on for years to come.
For now, at least, the company has friends in the White House. In April, Mulvaney spoke at McDonald’s latest lobbying event, where the joint-employer issue was a key topic. He wore a tie the color of the golden arches.
—With assistance from
(Updates with additional comment from McDonald’s on refranchising strategy in 17th paragraph)
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