McDonald's USA, LLC, a joint employer, et al.

MCDONALD’S USA, LLC 63 364 NLRB No. 14 McDonald’s USA, LLC, a joint employer, et al. and Fast Food Workers Committee and Service Em- ployees International Union, CTW, CLC, et al. Cases 02–CA–093893, et al., 04–CA–125567, et al., 13–CA–106490, et al., 20–CA–132103, et al., 25–CA–114819, et al., and 31–CA–127447, et al. May 26, 2016 ORDER1 BY CHAIRMAN PEARCE AND MEMBERS MISCIMARRA AND HIROZAWA Respondent MaZT’s emergency expedited requests for special permission to appeal the December 3, 2015 rul- ings of Administrative Law Judge Lauren Esposito deny- ing MaZT’s motion for an order addressing the use and administration of Sharepoint and MaZT’s motion for modification of the Case Management Order, or in the alternative, to clarify or establish precise standards for the advance notice of witnesses and the presentation of evidence, are denied as moot for the reasons set forth below. On March 3, 2015, Administrative Law Judge Lauren Esposito issued a Case Management Order (CMO) which provides, inter alia, that the hearing in this matter will take place in three phases—the first in Manhattan, the second in Chicago, and the third in Los Angeles. The CMO distinguishes between joint-employer evidence applicable on a “corporate or nationwide basis,” all of which will be presented in Manhattan, and joint- employer and ULP evidence applicable to “each specific franchisee,” which will be presented in Manhattan, Chi- cago, or Los Angeles, respectively, depending upon the geographic location of each individual franchisee. Final- ly, in order to minimize the litigation costs of the indi- vidual franchisees, the CMO originally provided for par- ties to be able to participate in hearings remotely by vid- eoconference, if they wished, and directed the General Counsel to provide notice regarding the presentation of joint-employer evidence “sufficiently in advance” to al- low parties wishing to participate in the hearing by vide- oconference to arrange to do so.2 In an effort to facilitate the remote participation ele- ment of the CMO, the General Counsel proposed using the Agency’s videoconference and file-sharing technolo- gies. However, there were a number of difficulties in implementing these technologies in a way that would allow for real-time remote participation by interested parties. In addition, a dispute arose between Respondent 1 The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. 2 As discussed infra, the videoconferencing aspect of the CMO was eliminated by joint stipulation. MaZT and the General Counsel regarding the sufficiency of advance notice and use of joint-employer evidence under the CMO. On July 3 and November 25, 2015, respectively, Re- spondent McDonald’s USA, LLC and Respondent MaZT each filed motions with the judge related to the proposed use of the Agency’s videoconference and file-sharing technologies. On November 25, Respondent MaZT also filed a separate motion to modify the CMO to clarify or establish precise standards for the advance notice of wit- nesses and presentation of evidence related to joint- employer status, and to limit the use of joint-employer evidence introduced during the franchisee-specific phas- es of the hearing. The judge denied each of these mo- tions and the Respondents each filed requests for special permission to appeal these rulings.3 The General Coun- sel filed an opposition to each of these three requests. On March 14, 2016, the judge approved a Stipulation between McDonald’s USA, Respondent Franchisees, the Charging Parties, and the General Counsel as to Modifi- cation of the Case Management Order (Stipulation). The Stipulation, inter alia, modifies the CMO “to replace re- mote participation of counsel for respondent franchisees by videoconference with the rights to deferred objection and cross-examination [as described in the Stipulation].” (Stipulation at 1.) The Stipulation also provides that “every party agrees to withdraw any appeals it has pend- ing regarding the videoconference system as moot.” Id. In light of this Stipulation, on March 25, 2016, the Board issued a Notice to Show Cause why these three pending requests for special permission to appeal should not be dismissed as moot. On April 7, 2016, Respondent McDonald’s USA, LLC filed a response to the Notice to Show Cause stating that it agreed to withdraw its July 27, 2015 request for special permission to appeal. On April 8, 2016, Respondent MaZT filed a response to the Notice to Show Cause stat- ing that the Stipulation did not affect the issues raised in its two pending requests for special permission to appeal. On April 14, 2016, the General Counsel filed a brief in opposition to Respondent MaZT’s response, arguing that both remaining requests for special permission to appeal are moot under the terms of the Stipulation. Having duly considered these matters and for the rea- sons stated below, we find that Respondent MaZT’s two pending requests for special permission to appeal are moot. 3 Respondent McDonald’s USA, LLC filed its request for special permission to appeal on July 27, 2015. Respondent MaZT filed its requests for special permission to appeal on December 15, 2015. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 64 In its requests for special permission to appeal, Re- spondent MaZT stated concerns about notice of witness- es and use of the Agency’s file-sharing technology that were grounded, at least in part, in the difficulties of re- mote participation. As noted above, however, the Stipu- lation modified the CMO to eliminate the need for par- ties to participate in the hearings remotely via videocon- ference. Without the element of remote participation, there is no basis for the rigid advance notice requirement sought by Respondent MaZT and no need for real-time remote access to documents.4 Respondent MaZT will not be participating remotely in any aspect of the hearing and will be physically present when the General Counsel presents its case concerning MaZT. Thus, there is no validity in the concerns Respondent MaZT has raised regarding use of the Agency’s file-sharing technology. While litigation documents will continue to be made available using this technology as a convenience to the parties, if Respondent MaZT prefers, it will be able to obtain copies of the transcripts and exhibits from the court reporter (as in any other NLRB proceeding), and will have the opportunity to present objections regarding evidence in remote hearings in accordance with the Stip- ulation. In addition, we do not see any basis for Respondent MaZT’s request to further limit the use of joint-employer evidence introduced during the franchisee-specific phas- es of the hearing. In this regard, the CMO distinguishes between joint-employer evidence applicable on a “corpo- rate or nationwide basis” and joint-employer and ULP evidence applicable to “each specific franchisee.”5 The Stipulation provides further definition to this distinction. Thus, under the CMO and the Stipulation, for any fran- chisee-specific evidence offered against Respondent MaZT, counsel for MaZT will have a full opportunity to examine, object to, and/or rebut that evidence. Accordingly, for the foregoing reasons, we deny Re- spondent MaZT’s December 15, 2015 requests for spe- cial permission to appeal as moot. 4 Contrary to our dissenting colleague, we find that the CMO pro- vides for the parties to receive appropriate advance notice from the General Counsel, especially when viewed in light of the Stipulation. The Stipulation, which Respondent MaZT agreed to, eliminates the use of videoconferencing for the introduction of evidence, including wit- ness testimony. Instead, counsel for respondent franchisees who have not made an appearance on the record at the time of the introduction of evidence at issue are permitted to defer objections and cross- examination. This provides ample time for the respondent franchisees to raise objections to all testimony or exhibits relevant to the allegations concerning it and to recall any witness for cross-examination. 5 If, during the various phases of the hearing, the General Counsel seeks to introduce evidence in a manner that is contrary to the judge’s CMO or the parties’ Stipulation, any party can raise an objection with the judge during the hearing. MEMBER MISCIMARRA, concurring in part and dissenting in part. This is a consolidated proceeding involving 31 sepa- rate respondents and 61 unconnected unfair labor prac- tice (ULP) cases, and the structure of the hearing is based on unusual procedures requested by the General Counsel. I have previously expressed my view that the decisions made to date in this consolidated proceeding will result in extraordinary costs and delays,1 and the worst burdens will be imposed on the alleged discriminatees (since they will be denied relief until the completion of a lengthy multiple-city hearing and subsequent appeals that are likely to involve many more years of litigation than would be associated with separate cases) and on each of the 31 separate respondents (since most of the hearing will be devoted to matters other than each separate re- spondent’s alleged violations). The judge and my col- leagues have recognized that the size and structure of this litigation require meaningful accommodations to address substantial process-related costs and burdens on the par- ties.2 At present, the Board is considering two appeals by Respondent MaZT, Inc. (MaZT), which I address in suc- cession below. First, MaZT appeals from the judge’s refusal to clarify her Case Management Order’s requirement that the Gen- eral Counsel provide “sufficient” advance notice of wit- ness names and planned appearance dates so that each respondent can decide whether or how to participate in the hearing when particular witnesses testify. MaZT has requested that, for every week in which the General Counsel will call witnesses to testify, the General Coun- 1 The Board’s prior procedural rulings in this case outline its ex- traordinary and unprecedented nature. See Lewis Foods of 42nd Street, LLC, 362 NLRB 1084 (2015) (finding that judge properly denied McDonald’s request to have a transcript of a telephonic conference addressing scheduling and production of documents subpoenaed by the General Counsel); McDonald’s USA, LLC, 362 NLRB 1347 (2015) (finding that judge properly denied McDonald’s motion for a bill of particulars regarding General Counsel’s alternative theory of joint- employer status, about which the consolidated complaints are silent); McDonald’s USA, LLC, 363 NLRB 845 (2016) (finding that judge properly denied motions filed by McDonald’s and New York fran- chisees to sever consolidated cases based on alleged prejudice to the respondents and the alleged denial of due process); McDonald’s USA, LLC, 363 NLRB 865 (2016) (denying appeals by McDonald’s and New York franchisees challenging Case Management Order based on objec- tions to the structure of multiple-city hearings and the order in which evidence must be presented); McDonald’s USA, LLC, 363 NLRB 1363 (2016) (denying McDonald’s appeal from judge’s order that prevents McDonald’s from obtaining various subpoenaed documents relating to potential “brand protection” defense to alleged joint-employer liability). I have authored separate dissenting opinions regarding the majority’s rulings in all but one of these prior decisions, and in 362 NLRB 1347, former Member Johnson and I coauthored a dissenting opinion. 2 See fns. 5 and 6, infra, and accompanying text. MCDONALD’S USA, LLC 65 sel be required to provide the witnesses’ names and ap- pearance dates on Monday of the preceding week. In part, this request by MaZT was prompted by the fact that the Case Management Order contemplated that various respondents would participate in the hearing from remote locations, relying on videoconference and document management technologies that have proven to be unreli- able. Although my colleagues correctly note that the parties’ stipulation has dispensed with remote participa- tion, I believe it is unreasonable in a case of this size and complexity to deny MaZT’s request that all parties re- ceive one week’s advance notice from the General Coun- sel of witness names and appearance dates (with notice to be provided, regarding witnesses who testify in any given week, by the close of business on Monday of the preceding week). The denial of MaZT’s request for rea- sonable advance notice of witness names and expected appearance dates will predictably cause confusion, preju- dice and unnecessary disputes and appeals to the Board. As to the majority’s disposition of this issue,3 I respect- fully dissent. Second, in today’s Order, my colleagues reiterate that the hearing’s structure will include a discrete stage de- voted to “each specific franchisee,” during which the other 30 separate respondents will not need to partici- pate.4 This is consistent with the majority’s earlier rul- 3 Apart from the issue of advance notice of witnesses’ names and expected appearance dates, I join my colleagues in denying MaZT’s more detailed requests set forth on p. 3 of Exhibit J to MaZT, Inc.’s emergency expedited request for special permission to appeal the ad- ministrative law judge’s order denying MaZT's motion for modification of the Case Management Order, or in the alternative, to clarify or estab- lish precise standards for the advance notice of witnesses and the presentation of evidence. 4 The majority states that “the CMO distinguishes between joint- employer evidence applicable on a ‘corporate or nationwide basis’ and joint-employer and ULP evidence applicable to ‘each specific franchi- see.’ The Stipulation provides further definition to this distinction. Thus, under the CMO and the Stipulation, for any franchisee-specific evidence offered against Respondent MaZT, counsel for MaZT will have a full opportunity to examine, object to, and/or rebut that evi- dence.” The majority also states that “during the various phases of the hearing, [if] the General Counsel seeks to introduce evidence in a man- ner that is contrary to the judge’s Case Management Order or the par- ties’ Stipulation, any party can raise an objection with the judge during the hearing.” ings in this case. Thus, when upholding the consolida- tion of diverse parties and claims in this proceeding, the majority stated that “the Case Management Order pro- vides for a distinct component of the litigation as it re- lates to each individual franchisee, which helps to protect the Respondents’ . . . due process rights, as well as con- trolling the efficiency and costs of litigation for those individual businesses.”5 Likewise, when approving the Case Management Order, the majority again stated that “the Case Management Order provides for an orderly presentation of evidence that helps to protect each Re- spondent’s . . . due process rights, as well as controlling the efficiency and costs of litigation for those individual businesses.”6 In its pending request for review, MaZT seeks confirmation that joint-employer evidence adduced during one respondent’s “specific franchisee” hearing stage (in which the General Counsel has stated that the other franchisee respondents need not participate) will not be used against the other respondents. The hearing- stage structure of this proceeding contemplates that each franchisee respondent need not participate in the “specif- ic franchisee” hearing stages devoted to other respond- ents, and the majority has emphasized that the purpose of this structure is to protect the due process rights of each individual respondent.7 Thus, the Board’s earlier rulings and the disposition of MaZT’s current motion establish that any franchisee-specific joint-employer evidence in- troduced or admitted during one “specific franchisee” hearing stage cannot be used against the other respond- ents.8 On this basis, I concur with the majority’s disposi- tion of this MaZT request. 5 McDonald’s USA, LLC, 363 NLRB 845, 846 (emphasis added). 6 McDonald’s USA, LLC, 363 NLRB 865, 865 (emphasis added). 7 See fns. 5 and 6, supra. 8 In other words, joint-employer evidence introduced or admitted during one “specific franchisee” hearing stage cannot be applied by reference against any other respondents. If the General Counsel wishes to use joint-employer evidence introduced or admitted during one “spe- cific franchisee” hearing stage against other respondents, that same evidence must be proffered in each hearing stage devoted to those other respondents, where each of those respondents would have the oppor- tunity to contest its admission and cross-examine the General Counsel’s witnesses.