NLRB

by Michael Scimone, Associate, Outten & Golden LLP.

Last Tuesday, the National Labor Relations Board’s (“NLRB”) General Counsel announced that his office would prosecute McDonald’s USA, LLC for unfair labor practices committed by its franchisees (i.e., the individual restaurants not owned by the corporation, which is most of them).  That means that the NLRB may hold McDonald’s liable if its nominally “independent” franchisees interfere with or retaliate against workers who try to form unions, strike, or demand better pay or working conditions. 

The GC’s move is an effort to apply common sense to an all-too-common legal dodge.  McDonald’s claims that its franchisees are free to make their own decisions about labor matters.  But that’s hardly true in practice.  Fast food franchisors like McDonald’s have enormous leverage over their franchisees.  McDonald’s computers track franchisees’ sales and labor costs, monitor employee schedules, and calculate how much labor the stores need.  And McDonald’s is famous for controlling just about everything else in its restaurants – where they buy supplies, how they cook their food, and how they advertise the brand.  It even owns the restaurants themselves.  What’s left for the franchisee to control?  Is it realistic to imagine that a franchisee could bargain over wages, schedules, or health and safety without McDonald’s at the table?

The franchisor-franchisee smokescreen allows McDonald’s to avoid responsibility for a range of labor abuses, from anti-union interference to wage theft.  McDonald’s workers have filed multiple lawsuits seeking to hold McDonald’s, along with its franchisees, responsible for ripping off workers by making them work off the clock and stealing their already-low wages.  McDonald’s, of course, denies all responsibility.

by Jeremy Leaming

Republican obstructionists in the Senate have strived to hobble or make wholly inoperative the National Labor Relations Board, which is charged with protecting the rights of workers, including the right to form unions and engage in collective bargaining. That effort got a boost by the rightward leaning U.S. Court of Appeals for the District of Columbia Circuit, which ruled earlier this year that President Obama’s recess appointments to the five-member board were unconstitutional.

Today, the U.S. Supreme Court, an increasingly pro-business Court itself, decided to wade into the issue and determine whether the D.C. Circuit got it right in the case, National Labor Relations Board v. Noel Canning. “The specific issue is the scope of the Constitution’s grant of presidential power to put an official temporarily into office without Senate approval – a power that arises when the Senate is not on hand to review that appointment,” writes SCOTUSblog’s Lyle Denniston. “Answering that question could require the Court to define when the Senate, in a legal sense, goes into recess.”

The D.C. Circuit’s opinion in January found that the president ran afoul of Article II, Section 2, which grants the executive the “power to fill up all vacancies that may happen during the recess of the Senate, by granting commissions which shall expire at the end of their next session.” For more than a hundred years presidents have made recess appointments to fill executive branch and judicial vacancies that Congress has refused to provide advice and consent on. But the D.C. Circuit panel, made up of Republican appointees, narrowly defined when Congress was in recess, thereby invalidating Obama's recess appointments.

The president, however, argued that the Senate was bent on blocking his nominations to the NLRB and that it was long past time to make the agency operational. Not surprisingly a group of Republicans lodged a brief with the high court calling on it to let the D.C. Circuit opinion stand.

The Constitutional Accountability Center, however, lodged a brief urging the justices to take the case and reverse. The CAC’s brief says the D.C. Circuit opinion greatly weakened the recess appointments power by claiming it can only be used “during recesses that occur between enumerated sessions of Congress, and not during any intra-session break.”

Denniston notes that while the justices may focus on the constitutional questions raised in the case, “the outcome has real potential for giving either the Senate of the White House real tactical advantages in the ongoing confirmation wars. It could give a resistant Senate a chance to nearly take away the president’s recess appointment authority, or it could give the White House a way to get around filibuster-driven obstruction of nominees.”

As Sen. Elizabeth Warren (D-Mass.) noted at the 2013 ACS National Convention, the Supreme Court has grown increasingly friendly to big business concerns, with the Chamber of Commerce continuing to rack up wins before the high court. The Chamber and other business interests will surely be pushing for a Supreme Court opinion that would narrow the scope of the president’s recess appointments power, especially since the case involves a Board it views as a hurdle to their interests.