Understanding the NLRB and how it works

Controversial decisions affecting restaurants, and restaurant franchisors in particular, have drawn the industry’s attention to the National Labor Relations Board. The independent agency’s roots extend back to the Great Depression, yet its structure, workings and mandate remain a mystery to many in the restaurant business, making the monumental actions of recent months all the more surprising and perplexing.

Here in Q&A form is a primer on the Board and how it functions.

What is the NLRB?

The agency has the mission of protecting labor from employer practices and policies that impinge on employees’ right to organize and bargain collectively. Workers or representatives who feel they’re being hampered can file a complaint in any one of 32 regional offices.

How does it work?

The actual board is only one component of the NLRB.

Complaints deemed legitimate by a regional office are brought before an administrative judge for the complainant’s area. The administrative judge decides on the validity of facts in a case, in effect weighing the evidence and applying the law—a judge, jury and cross-examining court official in one person.

In the recent landmark case against McDonald’s, Administrative Judge Lauren Esposito heard arguments that some McDonald’s employees had been the targets of retaliation from chain franchisees for participating in the union-backed Fight for $15 campaign to raise wages.

She agreed with the assertion that McDonald’s Corp., the franchisor, should be included in the scope of the complaint because the rules and procedures set for franchisees in effect made the franchisor a “joint employer.” In essence, she asserted, it shares in the responsibility for franchisee’s recruitment, employment and termination policies.

So why do they call it the NLRB?

The heart of the agency is the actual Board, a five-person panel consisting of a chairman and four members. It acts in effect as an appeals court, adjudging challenges to the rulings of the administrative judges. If employers feel the judges erred, they bring their gripe to the board.

This week, the Board denied McDonald’s Corp.’s assertions that Judge Esposito had erred in January in affirming the franchisor could be held accountable for the Fight for $15 complaints.

Who makes the case for the other side?

A general counsel, appointed by the President of the United States and acting independently of the Board, serves as a prosecutor in bringing a complaint against an employer and arguing on behalf of labor.

In the landmark action against McDonald’s, for instance, General Counsel Richard Griffin contended that the franchisor should be a co-defendant in the complaints brought by McDonald’s crewmembers.  He sent a shudder through the restaurant industry by notifying McDonald’s Corp. back in December that he regarded the company as a joint employer, subject to the complaint, and would treat it as such in pursuing the matter on behalf of franchisees’ employees.

One of McDonald’s arguments before Judge Esposito was that it couldn’t refute Griffin’s joint-employer assertion because it wasn’t based on facts; there is no definition of what a joint employer is. Esposito did not agree, and the Board thought likewise.

Can the Board’s decisions be overturned?

Yes. McDonald’s could seek a reversal from the U.S. Courts of Appeals and pursue an appeal all the way to the Supreme Court.

How does someone get on the Board?

The members are appointed by the president for a five-year term (as opposed to a four-year term for the general counsel.) The appointees are usually specialists in labor law or union operations, and are often bottlenecked in Senate confirmation hearings because their backgrounds can be controversial.

For instance, President Obama once nominated Craig Becker, the assistant general counsel of the Service Employees Union International, for a seat. The president eventually withdrew the nomination.

Are employers represented on the Board?

No. The current Board consists exclusively of lawyers who are there presumably because of their experience in labor law.

A union connection is much more common. General Counsel Griffin, for instance, was formerly general counsel for the International Union of Operating Engineers and a past member of the AFL-CIO’s board.

What are the next likely steps in the McDonald’s matter?

The complaints against the franchisor and its franchisees will likely move forward for adjudication before Judge Esposito. Many observers expect McDonald’s to appeal any unfavorable decisions, all the way to the Supreme Court.


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