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Labor Board Rules In Favor Of McDonald's In Union Case By Franchise Workers

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The National Labor Relations Board ruled in favor of McDonald's in a long-running case filed by workers who accused the fast-food giant of retaliation after they tried to unionize.

The lawsuit, filed by 20 employees against McDonald's and some of its franchise operators in 2015.

Service Employees International Union or SEIU and Fast Food Workers Committee alleged that workers who participated in strikes supporting the Fight for $15 labor movement were punished with reduced working hours or suspension, or assigned harder tasks.

The lawsuit was seeking a ruling that would consider McDonald's a 'joint employer' with its franchisees and thus hold the company liable if its franchisees violated labor laws.

McDonald's has about 14,000 restaurants in the U.S., and more than 90 percent of these are owned and operated by franchisees. The fast-food chain has argued that franchisees are independent businesses and are responsible for their own employees.

If McDonald's were to be considered a joint employer, the company could potentially face more litigation. The case was also being closely followed due to the potential impact of the ruling on several other companies that depend on franchising for work.

The NLRB said it has instructed an administrative law judge to approve settlements reached earlier between McDonald's, its franchisees and the workers.

As part of the settlement, McDonald's franchisees must set up a $250,000 settlement fund and pay $171,636 to the workers.

In 2018, McDonald's and the NLRB's General Counsel attempted to settle the complaints with the workers. However, the judge overseeing the case, Lauren Esposito, rejected the proposal.

On Thursday, an NLRB panel overruled and instructed the judge to approve the settlement deal.

In response to the NLRB ruling, McDonald's said the settlement allows the company's franchisees and employees to move forward, and resolves all matters without any admission of wrongdoing.

However, the SEIU and the Fight for $15 said they would forcefully appeal the ruling.

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