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

368 NLRB No. 134 NOTICE: This opinion is subject to formal revision before publication in the bound volumes of NLRB decisions. Readers are requested to notify the Ex- ecutive Secretary, National Labor Relations Board, Washington, D.C. 20570, of any typographical or other formal errors so that corrections can be included in the bound volumes. 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. December 12, 2019 ORDER REMANDING BY MEMBERS MCFERRAN, KAPLAN, AND EMANUEL On July 17, 2018, Administrative Law Judge Lauren Esposito issued an order denying the General Counsel’s and McDonald’s USA, LLC’s (McDonald’s) motions to approve settlement agreements in the above captioned cases. The General Counsel and McDonald’s each filed a request for special permission to appeal and an appeal of the judge’s order, the Franchisees filed briefs in support of 1 Franchisee Jo-Dan MadAlisse LTD, LLC filed a brief in support of McDonald’s appeal. Franchisees RMC Enterprises LLC; RMC Loop Enterprises; Lofton & Lofton Management V, Inc.; Wright Management, Inc.; Nornat, Inc.; and Faith Corporation of Indianapolis filed a single brief in support of McDonald’s appeal. Franchisees Karavites Restau- rant 26, Inc.; Karavites Restaurant 11102, LLC; Karavites Restaurant 5895, Inc.; Karavites Restaurant 6676, Inc.; V. Oviedo, Inc.; Taylor & Malone Management, SevenMcD, Inc.; Topaz Management, Inc.; Mashayo, Inc.; and K. Mark Enterprises, LLC filed a single brief in sup- port of McDonald’s appeal. Franchisees AJD, Inc.; Lewis Foods of 42nd Street, LLC; 18884 Food Corporation; 14 East 47th Street, LLC; John C Food Corp.; 1531 Fulton St., LLC; McConner Street Holding LLC’s store located at 2142 Third Avenue; McConner Street Holding LLC’s store located at 2049 Broadway; Mic-Eastchester, LLC’s store located at 341 Fifth Avenue; and Bruce C. Limited Partnership’s store located at 4259 Broadway filed a single brief in support of McDonald’s appeal. Franchisees MaZT, Inc.; Sanders-Clark & Co., Inc.; D. Bailey Manage- ment Co.; and 2Mangas, Inc. filed a single brief in support of McDon- ald’s and the General Counsel’s appeals. The HR Policy Association and the Restaurant Law Center each filed a motion to file an amicus brief and a proposed brief. We grant the mo- tions and accept the briefs for filing. 2 The Charging Parties filed a motion to recuse Chairman Ring and Member Emanuel. McDonald’s filed an opposition, and the Charging Parties filed a response. The Coalition for a Democratic Workplace; American Hotel & Lodging Association; Associated Builders and Con- tractors; Chamber of Commerce of the United States of America; HR Policy Association; Independent Electrical Contractors, Inc.; Interna- tional Foodservice Distributors Association; International Franchise As- sociation; the National Association of Manufacturers; National Associa- tion of Wholesaler-Distributors; National Federation of Independent Business; National Retail Federation; Restaurant Law Center; Retail In- dustry Leaders Association and the Society for Human Resource Man- agement filed a joint amicus letter supporting McDonald’s. Professor Richard W. Painter filed a letter brief supporting the Charging Parties, McDonald’s filed an opposition to Painter’s letter, and Painter filed a response. The Charging Parties then filed a motion to strike McDonald’s response for containing personal attacks on Painter, and McDonald’s filed a response. We deny the motion to strike, as the matter complained the appeals,1 the Charging Parties filed a brief in opposi- tion, and the General Counsel and McDonald’s each filed a reply brief. The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. Having duly considered the matter, we have decided to grant the requests for permission to file a special appeal, grant the appeals, vacate the judge’s order, and remand with instructions to approve the settlement agreements. For the reasons set forth below, we find, contrary to the judge, that the standard set forth in Independent Stave Co., 287 NLRB 740 (1987), warrants approval of the settle- ment agreements.2 I. FACTS The relevant factual background is set forth in full in the judge’s order and briefly summarized here. On December 19, 2014, the Regional Directors for Regions 2, 4, 13, 20, 25, and 31 issued six separate complaints against McDon- ald’s, McDonald’s Restaurants of Illinois, Inc., and of does not affect our ultimate decision. T.E. Elevator Corp., 291 NLRB 1184, 1184 fn. 4 (1988). The motion to recuse Chairman Ring is moot. Chairman Ring took no part in the consideration of this case. Member Emanuel has considered the motion and has determined, in consultation with the Board’s Designated Agency Ethics Official, not to recuse himself. The motion, which is based on Member Emanuel’s for- mer affiliation with the law firms of Littler Mendelson and Jones Day, seeks recusal under Executive Order 13770 (the “Trump Ethics Pledge”) and the Standards of Ethical Conduct for Executive Branch employees codified at 5 C.F.R. 2635.502. Recusal is not necessary here under either standard. Under par. 6 of the Trump Ethics Pledge, Member Emanuel may not participate for the first 2 years of his term in cases in which his former firm, Littler Mendelson, represents a party, or in which one of his former clients is or represents a party. No party to this case is a former client of Member Emanuel. The Charging Parties assert that Littler Mendelson provided legal advice to the Respondents in connection with the “Fight for $15” campaign before the unfair labor practice proceeding was initi- ated. In the circumstances here, however, that does not make Littler Mendelson the representative of a party to this case for the purpose of par. 6 of the Pledge because Littler Mendelson has not represented the Respondents during any phase of the administrative unfair labor practice proceeding, including before the Region, the administrative law judge, or on the various motions filed to date with the Board. With respect to Jones Day, which is counsel of record for Respondent McDonald’s USA, Member Emanuel’s employment ended in 2004 and is therefore outside the scope of paragraph 6 of the Pledge. See Executive Order 13770 at Sec. 1 ¶6 & Sec. 2(j). Nor is recusal necessary under the Standards of Ethical Conduct. No person with whom Member Emanuel has a covered relationship within the meaning of 5 CFR § 2635.502 is or represents a party to this case. Member Emanuel no longer has a covered relationship with Jones Day or Littler Mendelson, and in any event Littler Mendelson does not represent a party to this case. Finally, Member Emanuel does not believe that his former affiliation with either law firm would, under the factual, legal, and temporal circumstances here, “cause a reasonable person with knowledge of the relevant facts to question his impartiality.” 5 C.F.R. § 2635.502(a)(1). DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 2 various franchisees located in New York, New York;3 Philadelphia, Pennsylvania;4 Chicago, Illinois;5 Indianap- olis, Indiana;6 Sacramento, California;7 and Los Angeles, California.8 The complaints allege that, in response to Fight for $15 activity, a nationwide organizing campaign by fast food workers for higher wages, McDonald’s Res- taurants of Illinois and 29 Franchisees violated Section 8(a)(1) of the Act by threatening employees, promising benefits to them, interrogating them, and surveilling their protected activity.9 The complaints additionally allege that McDonald’s Restaurants of Illinois and 9 Franchisees violated Section 8(a)(3) and (1) of the Act by unlawfully discharging 3 employees and suspending, reducing work hours of, or sending home early 17 others, all in retaliation for their union and other protected concerted activity. Alt- hough the complaints do not allege that McDonald’s inde- pendently violated the Act, they allege that McDonald’s “possessed and/or exercised” sufficient control over the labor relations policies of the Franchisees that it is a joint employer with the Franchisees and, as such, can be held jointly and severally liable for unfair labor practices com- mitted by the Franchisees. The cases were consolidated for a hearing in Region 2. The hearing opened on March 30, 2015, before Judge Es- posito and then proceeded for the next several years, fo- cused primarily on McDonald’s alleged status as a joint employer and punctuated with multiple special appeals to the Board and frequent procedural disputes. To expedite the litigation, on October 12, 2016, the judge severed the Region 13, 20, 25, and 31 cases and placed them in abey- ance, pending a decision from the Board in the Region 2 and 4 cases.10 The judge also ruled that, at the conclusion of the Region 2 and 4 cases, the parties in the severed cases would have an opportunity to submit deferred objections to evidence introduced in the Region 2 and 4 cases, and 3 The New York franchisees include AJD, Inc.; Lewis Foods of 42nd Street, LLC, 18884 Food Corp.; 14 East 47th Street, LLC; John C Food Corp.; 840 Atlantic Avenue, LLC; 1531 Fulton Street, LLC; McConner Street Holding, LLC; MIC-Eastchester, LLC; and Bruce C. Limited Part- nership. 4 Jo-Dan Madalisse, Ltd., LLC (Jo-Dan) is the sole Philadelphia fran- chisee involved in this proceeding. 5 The Chicago franchisees include Karavites Restaurants 11102, LLC; Karavites Restaurants 26, Inc.; RMC Loop Enterprises, LLC; Wright Management, Inc.; V. Oviedo, Inc.; McDonald’s Restaurants of Illinois, Inc.; Lofton & Lofton Management V, Inc.; K. Mark Enter- prises, LLC; Nornat, Inc.; Karavites Restaurants 5895, Inc.; Taylor & Malone Management; RMC Enterprises, LLC; Karavites Restaurant 6676, LLC; and Topaz Management, Inc. McDonald’s Restaurants of Illinois is wholly owned and operated by McDonald’s. 6 Faith Corp. of Indianapolis is the sole Indianapolis Franchisee in- volved in this proceeding. 7 MaZT, Inc. is the sole Sacramento franchisee involved in this pro- ceeding. the entire record in those cases would be admitted into ev- idence in the severed cases. On January 19, 2018, the judge granted the General Counsel’s motion to stay the hearing for 60 days to discuss “a global settlement of all pending NLRB charges” and to evaluate the impact of the Board’s decisions in Hy- Brand Industrial Contractors, Ltd.,11 and The Boeing Co.12 The judge questioned the timing of the requested stay because the parties were within days of closing the record in the Region 2 and 4 cases. Specifically, McDon- ald’s had only two more witnesses to present, including an expert witness in support of its defense that the Charging Parties were engaged in an attack on the McDonald’s brand. She nevertheless found the stay warranted, given the prospect of a universal settlement. When the hearing resumed on March 19, 2018, the Gen- eral Counsel and McDonald's presented a series of infor- mal settlement agreements resolving all of the cases. Each of the 30 proposed settlement agreements addresses the allegations against a single Franchisee and is executed by that Franchisee, McDonald’s, and the General Counsel. The settlement agreements provide 100 percent of back- pay for allegations requiring a monetary remedy; front or premium pay to the three alleged discriminatees who were discharged, each of whom has waived reinstatement; res- toration of hours and other working conditions; rescission of alleged unlawful rules; expungement of discipline and discharges; and notice posting at the Franchisees’ restau- rants and mailing of the notice to former employees. Although the settlement agreements do not impose joint and several liability on McDonald’s as a joint employer, they do impose certain obligations on McDonald’s to sup- port the remedies to which the Franchisees agreed. Spe- cifically, upon notice from the Regional Director of an un- cured breach by a Franchisee, the settlement agreements require McDonald’s to mail a Special Notice to the 8 The Los Angeles Franchisees include D. Bailey Management Com- pany; 2Mangas, Inc.; and Sanders-Clark & Co., Inc. For ease of reference, we use the term “Franchisee(s)” to refer to all of the Respondent restaurants, unless the context warrants differentiating between the Franchisees and McDonald’s Restaurants of Illinois. 9 The complaints allege a total of 181 violations of the Act. 10 In her October 12, 2016 Order Severing Cases and Approving Stip- ulation, the judge opined that “hearing all of the consolidated cases to- gether is impossible,” and that, with the cases consolidated, the record would not close “for years,” and a decision with respect to joint-em- ployer status would not be made “until well into the next decade.” 11 365 NLRB No. 156 (2017) (overruling BFI Newby Island Recy- clery, 362 NLRB 1599 (2015) (Browning-Ferris), enfd. in part and re- manded, 911 F.3d 1195 (D.C. Cir. 2018)), vacated 366 NLRB No. 26 (2018). 12 365 NLRB No. 154 (2017) (overruling “reasonably construed” prong of Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004)). MCDONALD’S USA, LLC 3 defaulting Franchisee’s current employees. The Special Notice states that, by the conduct described in the Special Notice, the defaulting Franchisee has violated the Act and is not in compliance with a settlement agreement. The Special Notice additionally states that McDonald’s “disa- vows” the conduct “[s]olely in its role as a party to the [s]ettlement [a]greement,” and that its issuance of the Spe- cial Notice does not constitute an admission of joint-em- ployer status. The 10 Franchisees alleged in the consolidated com- plaints to have committed violations resulting in backpay liability must also contribute to a Settlement Fund totaling $250,000 to benefit potential discriminatees entitled to a monetary remedy as a result of a breach of a settlement agreement. McDonald’s is required to collect the funds from the Franchisees and deposit them with the Board. Disbursement is triggered once McDonald’s is required to issue a Special Notice because a Franchisee, within 9 months of approval of its settlement agreement, has breached it by committing a violation, e.g., a discharge, a reduction in hours, or a suspension, identical to the viola- tion alleged against that Franchisee in the consolidated complaints. An alleged discriminatee entitled to a disbursement from the Settlement Fund because of a qualifying dis- charge or reduction in hours may choose to waive rein- statement or restoration of hours in exchange for 500 hours or 200 hours of premium pay, respectively. If the alleged discriminatee waives reinstatement or restoration of hours, the relevant charges will be dismissed. If the alleged discriminatee chooses not to waive reinstatement or restoration of hours, the General Counsel may issue a complaint and pursue default proceedings against the Franchisee—but not McDonald’s—for breaching the set- tlement agreement. Similarly, an alleged discriminatee entitled to a disbursement due to a qualifying suspension will receive backpay “in lieu of any other remedies,” and the relevant charges will be dismissed. The settlement agreements further provide that in the event of noncompliance by a Franchisee, or a Franchisee and McDonald’s, within 9 months of their approval, the Regional Director may reissue the relevant complaint al- legations and file a motion for default judgment against either the Franchisee (in the event of a default by the Fran- chisee alone) or against both the Franchisee and McDon- ald’s (in the event of a default by both). The only issue that may be raised in the default proceedings is whether there was a default on the terms of the settlement agree- ment. The General Counsel and McDonald’s each filed a mo- tion requesting that the judge approve the settlement agreements and dismiss the consolidated complaints. The Charging Parties opposed approval. II. JUDGE’S ORDER AND POSITIONS OF THE PARTIES On July 17, 2018, following the exchange of briefs and an oral argument, the judge issued an Order Denying Mo- tions to Approve Settlement Agreements. Evaluating the four factors set forth in Independent Stave, the judge found that they did not overall favor approval of the set- tlement agreements. Specifically, she concluded that fac- tor one (the parties’ mixed support for the settlement agreements) was inconclusive and that factors three (the lack of fraud, coercion, or duress) and four (no history of recidivism) favored adopting them. Nonetheless, the judge found that factor two (the rea- sonableness of the settlement agreements in light of the nature of the violations alleged, the risks of litigation, and the stage of litigation) strongly militates against approval. The judge concluded that McDonald’s obligations under the settlement agreements “do not in any way approximate the remedial effect” of a joint-employer finding, which the General Counsel had sought to obtain throughout the liti- gation. The judge additionally found the settlement agree- ments deficient because they are informal and require a complicated default process to enforce; they require with- drawal of the consolidated complaints before compliance has been effectuated; they do not require the Franchisees to post the notice electronically; they do not include suc- cessors and assigns language; and, in the judge’s view, they are not likely to definitively resolve these cases. In their briefs in support of their special appeals, the General Counsel and McDonald’s argue that the Board should approve the settlement agreements because they provide an immediate remedy for every substantive viola- tion alleged in the consolidated complaints, while avoid- ing the cost and uncertainty of litigation. Moreover, they contend that, in finding that the settlement agreements are unreasonable because they do not approximate the reme- dial effect of a finding of joint-employer status, the judge applied the “full remedy” standard that the Board rejected in UPMC, 365 NLRB No. 153, slip op. at 4 (2017) (calling full-remedy “an ill-advised standard less likely to effectu- ate the purposes and policies of the Act than the Board’s longstanding approach embodied in Independent Stave”). The General Counsel and McDonald’s also assert that the form and provisions of the settlement agreements comport with Board policy governing informal settlements. The Franchisees agree with and adopt McDonald’s ar- guments. They emphasize that they are small businesses with limited resources that have become unjustifiably em- broiled in costly and time-consuming litigation over mat- ters that have nothing to do with the mostly minor unfair labor practice charges against them, but instead relate to DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 4 the previous General Counsel’s desire to establish McDonald’s as a joint employer. The Franchisees in the severed cases further contend that rejecting the settlement agreements would place a uniquely heavy burden on them because the unfair labor practice allegations in their cases will not be heard until after the Board issues a decision in the Region 2 and 4 cases, which may take years. They assert that, in the meantime, as memories fade and wit- nesses become unavailable, neither they nor the alleged discriminatees will have access to a fair hearing given the passage of time. In their opposition brief, the Charging Parties contend that the judge carefully analyzed the facts and applicable law and correctly determined that the settlement agree- ments do not warrant approval under the factors set forth in Independent Stave. The Charging Parties also argue that the settlement agreements fail, as an initial threshold mat- ter, because there was no “meeting of the minds” regarding McDonald’s obligations under the settlement agree- ments.13 III. ANALYSIS AND CONCLUSIONS The Board’s longstanding policy is to “encourag[e] the peaceful, nonlitigious resolution of disputes.” E.g., UPMC, 365 NLRB No. 153, slip op. at 3 (quoting Inde- pendent Stave, 287 NLRB at 741). As we reiterated in UPMC, in determining whether to approve a settlement agreement, we will examine all the surrounding circumstances includ- ing, but not limited to, (1) whether the charging party(ies), the respondent(s), and any of the individual 13 The Restaurant Law Center and HR Policy Association’s amicus briefs support McDonald’s and the General Counsel’s arguments. The Restaurant Law Center additionally contends that the Board should defer to the General Counsel’s prosecutorial authority under Sec. 3(d) of the Act in evaluating his decision to reprioritize the goals of this litigation. 14 We emphasize that granting this special appeal on an interlocutory basis, rather than considering the judge’s order on exceptions at the con- clusion of litigation, will save the parties from expending the very re- sources on litigation that the settlement agreements are intended to con- serve. 15 Contrary to our dissenting colleague, approval of an informal set- tlement agreement is always within the discretion of the Board. Inde- pendent Stave, 287 NLRB at 741 (“[U]pon a motion of one or both of the parties to defer to a settlement agreement in lieu of further proceedings upon a complaint, the Board, after considering any objection raised by the General Counsel, will determine in its own discretion, ‘whether under the circumstances of the case, it will effectuate the purposes and policies of the Act to give effect to any waiver or settlement of charges of unfair labor practices.’”) (emphasis added); see also Flint Iceland Arenas, 325 NLRB 318, 319 (1998) (full-Board decision granting special appeal to review judge’s approval of a settlement agreement and revoking ap- proval of the agreement because it failed to satisfy the Independent Stave factors); International Shipping Agency Inc., 24–CA–091723, 2015 WL 1802717 (Apr. 20, 2015). Here, although the judge gave “meaningful consideration” to the immediate relief for the affected employees pro- vided for in the settlement agreements, the judge nonetheless rejected discriminatee(s) have agreed to be bound, and the posi- tion taken by the General Counsel regarding the settle- ment; (2) whether the settlement is reasonable in light of the nature of the violations alleged, the risks inherent in litigation, and the stage of the litigation; (3) whether there has been any fraud, coercion, or duress by any of the parties in reaching the settlement; and (4) whether the respondent has engaged in a history of violations of the Act or has breached previous settlement agreements resolving unfair labor practice disputes. Id., slip op. at 4 (quoting Independent Stave, 287 NLRB at 743). As we have long observed—and as the judge acknowl- edged in her decision —“in determining whether to approve settlement agreements, ‘the discretion of the Board is recog- nized as broad.’” Id., slip op. at 3 (quoting Farmers Co-oper- ative Gin Assn., 168 NLRB 367, 367 (1967)). Applying that broad discretion to our review of the judge’s decision, we believe that the settlement agree- ments are reasonable under Independent Stave and war- rant approval. Contrary to the judge, we find that the set- tlement agreements effectuate the Act because they rem- edy every violation alleged in the consolidated com- plaints. Moreover, we conclude that further litigation would impose a substantial burden on the parties, without a significant probability of prevailing on the complaint’s joint-employer allegation.14 Accordingly, we grant the re- quests for special permission to appeal, grant the appeals, vacate the judge’s order, and remand the case to the judge with instructions to approve the settlement agreements.15 them, in large part because they failed to resolve the joint-employer issue litigated in this case. Specifically, the judge noted that the General Counsel’s stated purpose in initiating this case was to obtain a finding of joint-employer liability that would update the Board’s joint-employer case law and “‘clarify the relationship between franchisor and franchi- see’ in the context of Board law regarding joint employer status.” How- ever, the judge issued her order on July 17, 2018—2 months before the Board issued its Notice of Proposed Rulemaking regarding The Standard for Determining Joint-Employer Status, 83 Fed. Reg. 46,681, on Septem- ber 14, 2018. This rulemaking proposes to change future Board law re- garding joint-employer status, regardless of how this case would have ultimately concluded in the absence of settlement. For that reason, where a part of the judge’s rationale in rejecting the settlement agreements is no longer applicable because of a proposed rulemaking, we find it only appropriate for us to exercise our own discretion in deciding whether to approve the settlement agreements, notwithstanding the traditional dis- cretion afforded to a judge to rule on informal settlement agreements reached during a hearing. Moreover, the potential adverse impact on all parties of delay and expense from further litigation in a unique case such as this, which already ranks among the lengthiest and most complex pro- ceedings in Board history—for the judge to update and clarify the case law on a matter that is now the subject of a proposed rulemaking—fur- ther demonstrates why it is appropriate for the Board to rule on the pro- priety of the settlement agreements now rather than in a subsequent re- view on exceptions to the judge’s eventual decision. MCDONALD’S USA, LLC 5 A. Independent Stave Factors One, Three, and Four are Inconclusive or Favor Approval. Here, the judge correctly found that the first factor (the position of the parties) is inconclusive, in view of the Gen- eral Counsel’s and the Respondents’ support for the set- tlement agreements16 and the Charging Parties’ strong op- position. That said, albeit not determinative, we observe that the General Counsel’s support for the settlement agreements is an important consideration, especially when he yields on prosecuting an aspect of the complaint to vin- dicate other public rights.17 Next, the judge correctly found that the third factor (fraud, coercion, or duress by any of the parties) and fourth factor (history of recidivism by the Respondents) weigh in favor of approval of the set- tlement agreements. There is no evidence that fraud, co- ercion, or duress were involved in the negotiation of the settlement agreements or that the Respondents have a pro- clivity to violate the Act. B. The Settlements Are Reasonable Under Independent Stave Factor Two. The second Independent Stave factor requires us to ex- amine whether the settlement agreements are reasonable in light of the nature of the violations alleged, the risks inherent in litigation, and the stage of the litigation. The judge found that this second factor “strongly militates” against approval of the settlement agreements. We disa- gree. 1. Nature of the violations alleged. As noted above, the consolidated complaints allege that the Franchisees committed a variety of unfair labor prac- tices under Section 8(a)(1) and (3) of the Act, including three discharges, suspensions, reductions of hours, sur- veillance, threats, promises of benefits, and interrogation, among others. In evaluating the second factor of the In- dependent Stave test, the most important consideration is that the settlement agreements would provide an immedi- ate remedy for all 181 violations alleged in the 16 We disagree with the judge that there was no meeting of the minds between the General Counsel and Respondent on the settlements’ oper- ation and therefore do not find that such a disparity militates against ap- proval. 17 Our dissenting colleague’s contention that the General Counsel’s position should be of less importance than the Charging Parties’, essen- tially because the General Counsel approves of the agreement, is unsup- portable, and simply reflects her policy position on the joint-employer standard rather than the legal standard for analyzing the agreements. 18 The General Counsel stipulated in his original motion to the judge to approve the settlement agreements that the parties have already satis- fied most of their obligations under the agreements, including the surren- der of all backpay funds to the Regions, which have been placed in es- crow pending Board approval of the settlement agreements. Thus, our dissenting colleague’s concern about enforceability of the agreed-upon consolidated complaints. Thus, under the settlement agreements, the Franchisees would remedy the harm to the victims of the alleged 8(a)(3) violations by paying them full backpay and expunging all references to the alleged violations from their records. The Franchisees have also agreed to pay premium pay to the three discriminatees whom they allegedly unlawfully discharged, in return for those discriminatees’ waiver of reinstatement.18 The set- tlement agreements would further require the Franchisees to take additional action to remedy the alleged Section 8(a)(1) violations: restore employment conditions; rescind the alleged unlawful rules; and post notices for 60 days and mail them to former employees. These provisions would remedy all of the conduct alleged as unlawful under Section 8(a)(1) and (3), inform current and former em- ployees about their Section 7 rights, and provide assur- ances that the Franchisees will not interfere with those rights in the future. The settlement agreements also impose certain obliga- tions on McDonald’s in place of the remedial guarantee of joint and several liability as a joint employer. Upon notice from the Regional Director of a Franchisee’s uncured breach, McDonald’s would be required to mail a Special Notice to the affected employees (with the full notice at- tached if it had not been previously distributed by the Franchisee, as the General Counsel and McDonald’s have since clarified) advising them that, by the conduct de- scribed, the Franchisee has violated the Act and is not in compliance with a settlement agreement. McDonald’s is- suance of the Special Notice would also trigger disburse- ment from the Settlement Fund if a Franchisee commits the same type of discrimination alleged against it in the consolidated complaints and causes an employee to suffer a monetary loss. Thus, while not identical to the joint and several liability that would have been ordered if McDon- ald’s were found to be a joint employer, the settlement agreements place responsibility on McDonald’s to secure both the notice and monetary remedies for the 181 alleged violations.19 remedies is misplaced. Further, her conjecture about what could happen in the hypothetical scenario that a closed or sold Franchisee commits an identical 8(a)(3) violation within 9 months is an inadequate basis for re- jecting the agreements, because the Franchisees have not been shown to be recidivist offenders predisposed to commit violations of the Act. 19 Contrary to the judge’s finding, McDonald’s Special Notice does not contain a nonadmissions clause in the traditional sense. See Potts- ville Bleaching Co., 301 NLRB 1095, 1095 fn. 7 (1991) (defining a “non- admissions clause” as “any language which suggests that the respond- ent’s conduct may have been lawful”). The Special Notice only includes a clause in which McDonald’s disclaims being a joint employer or agent of its Franchisees. Although it effectively asserts that McDonald’s did not violate the Act, unlike a nonadmissions clause it does not suggest that the Franchisee’s conduct as alleged in the complaint was lawful. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 6 Even though the settlement agreements remedy every alleged violation, the judge found them unreasonable, pri- marily because they “do not in any way approximate the remedial effect of a finding of joint employer status.” We understand the judge’s and our colleague’s concerns about the settlement agreements’ failure, if McDonald’s were a joint employer, to hold McDonald’s jointly and severally liable for the remedial provisions of the settlement agree- ments, especially after the extensive litigation on the joint- employer issue. However, we do not believe that pre- cludes approval. From the employees’ point of view, the remedy they will receive under the settlement agreements is essentially identical to that which they would have re- ceived if the General Counsel’s joint-employer theory had prevailed, except for a broader notice-posting require- ment. This is especially true given that the complaint does not allege that McDonald’s independently committed any unfair labor practice itself. Despite the significant agency time and resources expended in making a joint-employer showing, the General Counsel reasonably adjusted litiga- tion priorities and sought to settle the complaint in return for a remedy for all of the alleged violations by the pur- ported wrongdoers.20 Indeed, as we just reiterated in UPMC, it is well estab- lished that approval of settlement agreements under Inde- pendent Stave does not require that the remedies provided by the settlement be coextensive with the remedies that the Board would order if the General Counsel were to prevail on all complaint allegations. UPMC, 365 NLRB No. 153, slip op. at 4; Independent Stave, 287 NLRB at 743. If we were to reject the informal settlements solely because McDonald’s refused to guarantee compliance with the re- medial provisions as a joint employer, we would essen- tially be reinstating the “full remedy” rule we abandoned in UPMC.21 That, we decline to do, especially here where We also do not agree with the Charging Parties that the settlement agreements incentivize the Franchisees to skip posting the full Notice, thereby requiring McDonald’s to distribute the Special Notice. Failing to post the full Notice would subject the Franchisees to default proceed- ings and a Board order, which would itself require the Franchisees to post the full Notice. Thus, affected employees would receive two No- tices: the Special Notice from McDonald’s (which contains a copy of the full Notice) and, upon completion of default proceedings against the Franchisee, the full Notice, which the Franchisee would be required to post at the relevant restaurant(s) and mail to former employees. 20 Although the Board retains sole discretion to accept a settlement after a hearing opens, we note that the General Counsel’s role requires him to exercise his prosecutorial judgment, even after the hearing com- mences, “to determine whether a complaint can be successfully prose- cuted and, if he thinks not, to drop it,” Local 282 Teamsters v. NLRB, 339 F.2d 795, 799 (2d Cir.1964), subject to the Board’s ultimate approval, of course. Compare NLRB v. UFCW Local 23, 484 U.S. 112, 126 (1987) (recognizing the General Counsel’s authority, prior to hearing, to dismiss a complaint in favor of an informal settlement). the General Counsel favors the settlement agreements. Thus, the judge’s extensive discussion of the benefits of joint-employer liability and her criticism of McDonald’s unwillingness to agree to joint-employer liability are not determinative. All settlements entail compromise, and the parties made concessions to arrive at a remedy for all affected employ- ees. To preclude the resolution of Board litigation, on rea- sonable terms, simply because a proposed settlement does not mirror the remedy that could be achieved through suc- cessful litigation would undermine the Board’s interest in “encouraging voluntary dispute resolution, promoting in- dustrial peace, conserving the resources of the Board, and serving the public interest.” UPMC, 365 NLRB No. 153, slip op. at 4 (quoting Independent Stave, 287 NLRB at 743). We therefore conclude that the judge erred in find- ing that the nature of the allegations militates against ap- proval. 2. Risks inherent in litigation and the stage of litigation. Approval is also favored because there is a substantial risk that the litigation will not clarify joint-employer law as the General Counsel originally intended and the litiga- tion is still far from final resolution. The judge incorrectly found otherwise. First, it is beyond dispute that these cases present novel and complex issues with unusual litigation risk. As the judge explained, the General Counsel’s “stated purpose” in issuing a complaint alleging McDonald’s joint-em- ployer status was “to clarify the relationship between fran- chisor and franchisee” under Board joint-employer law. But we are unaware of any prior decisions finding McDonald’s to be a joint employer under any standard.22 Similarly, the Board has generally not held franchisors to be joint employers with their franchisees.23 Even under 21 The judge’s extensive reliance on UPMC is misplaced. While UPMC does present some surface similarities, it was by no means as complex as the current litigation, which involves 181 unfair labor prac- tice allegations, six consolidated complaints, almost three dozen re- spondents, a joint-employer allegation involving all of them, and a na- tionwide litigation effort. It is true that the Board found UPMC’s consent settlement of a single-employer allegation by a remedial guarantee a rea- sonable settlement. That, however, does not require the Board to find the different settlements here unreasonable, given the different commit- ment of agency resources, different procedural posture, different risk of litigation, and other distinguishing factors that we address herein. 22 See, e.g., Evans v. McDonald’s Corp., 936 F.2d 1087, 1089-1090 (10th Cir. 1991); Ochoa v. McDonald’s Corp., 133 F. Supp. 3d 1228, 1241 (N.D. Cal. 2015); Alberter v. McDonald’s Corp., 70 F. Supp. 2d 1138, 1145 (D. Nev. 1999); Kennedy v. McDonald’s Corp., 610 F. Supp. 203, 205 (S.D.W.Va. 1985). 23 See, e.g., S. G. Tilden, Inc., 172 NLRB 752, 753 (1968) (finding that franchisor was not a joint employer, even though the franchise agree- ment dictated “many elements of the business relationship,” because the franchisor did not “exercise direct control over the labor relations of [the MCDONALD’S USA, LLC 7 the joint-employer standard articulated in Browning-Fer- ris, there is no guarantee that McDonald’s would be found to be a joint employer with its Franchisees, and the Board in that case explicitly disclaimed an intent to address the joint-employer standard in the context of the relationship between a franchisor and a franchisee. Browning-Ferris, 362 NLRB 1599, 1618 fn. 120.24 It is therefore far from certain that this litigation would achieve the General Counsel’s original goals regarding McDonald’s alleged joint-employer status. Moreover, the Board’s recent notice of proposed rule- making regarding the standard for determining joint-em- ployer status,25 which issued after the judge’s order, may render moot the utility of using this case as a vehicle to develop joint-employer law. The proposed rule specifi- cally addresses elements of the franchisor/franchisee rela- tionship.26 As the General Counsel points out, if the Board implements a new joint-employer standard through rule- making, it will likely supplant any standard arising from the litigation of these cases. As a result, a decision regard- ing joint-employer status may have limited precedential value.27 Because of the foregoing, we balance the benefits of settlement against the value of continued litigation dif- ferently from the judge.28 The judge also erred in finding that the stage of the liti- gation disfavored approval. We acknowledge that this case involved Herculean efforts to structure the litigation, a myriad of procedural rulings, a highly contentious mo- tions practice before the judge and the Board, and over 150 hearing days over almost three years. The judge was also correct that the parties’ cases-in-chief were on the verge of closing. But after the record closed, the judge would need to issue a recommended decision and order. Even if franchisee]” and “the requirement that the franchisees observe . . .stand- ards set by [the franchisor] was merely to keep the quality and goodwill of the [franchisor’s] name from being eroded”). 24 In fact, the United States Court of Appeals for the D.C. Circuit only affirmed the facial validity of that standard in part. Browning Ferris In- dustries of California, Inc. v. NLRB, 911 F.3d 1195 (D.C. Cir. 2018). The court approved “the Board’s articulation of the joint-employer test as including consideration of both an employer’s reserved right to control and its indirect control over employees’ terms and conditions of employ- ment.” Id. at 1200. It expressly did not pass on whether either of those factors could be dispositive and it also found, that in applying the indi- rect-control factor, the Board failed to confine its analysis to indirect con- trol over the essential terms and conditions of employment. Id. The court accordingly remanded that aspect of the decision to the Board for it to explain and apply its test consistent with common-law limitations. Id. Browning-Ferris thus left open the question of whether the Board should continue to exempt franchisors from joint-employer status to the extent their control over employee working conditions is related to their legitimate interest in protecting the quality of their product or brand. See, e.g., Love’s Barbeque Restaurant No. 62, 245 NLRB 78, 120 (1978) (no joint-employer finding where franchisees were required to prepare and the judge found the alleged violations, there would likely be a lengthy appellate process to the Board and the court of appeals, with the result uncertain. At best, even if the General Counsel were to prevail in all aspects of the liti- gation before the Board and the court of appeals, years might elapse before notices were posted and the employ- ees obtained backpay and reinstatement. And this does not take into consideration the severed cases from Chi- cago, Indianapolis, Sacramento, and Los Angeles that are currently being held in abeyance. In these circumstances, it does not appear that any over- riding public interest would be served by forcing the Gen- eral Counsel and the Respondents to continue litigating these cases. The settlement agreements provide a full remedy to the affected employees, eliminate the risk of losing, and save the parties from expending additional re- sources on the remainder of the hearing and the appellate process. The immediate remedy provided by the settle- ment agreements better protects employees’ Section 7 rights and ameliorates any lingering coercive effects of the alleged unfair labor practices than would the same rem- edy, coupled with joint and several liability, after the Board and appellate process is exhausted. As the Supreme Court has observed, “[i]n labor disputes, as in other kinds of litigation, even a bad settlement may be more advanta- geous in the long run than a good lawsuit.” Air Line Pilots Assn., Int'l v. O'Neill, 499 U.S. 65, 81 (1991). 3. The judge’s concerns over the form of the settlements are unfounded. As discussed above, the judge objected to several as- pects of the settlement agreements that, in her opinion, fur- ther justified finding the settlement agreements deficient. Specifically, she criticized the settlements because: (a) cook food a certain way because, inter alia, the franchisor established the requirements to “keep the quality and good will of [its] name from being eroded”) (quoting S.G. Tilden, above), enfd. in rel. part sub nom. Kall- mann v. NLRB, 640 F.2d 1094 (9th Cir. 1981). 25 83 Fed. Reg. 46,681. 26 83 Fed. Reg. 46,697 (examples 5 & 6). 27 Compare Pueblo Sheet Metal Workers, Inc., 292 NLRB 855, 855 fn. 3 (1989) (finding that the judge properly withdrew a complaint due to changes in intervening law). 28 We find that our colleague’s contention that the General Counsel is principally driven by a desire to “avoid” any finding on the joint-em- ployer issue must be measured against her own insistence on obtaining a ruling on the matter. However, in neither instance would an eventual finding by the judge, based on the facts of this particular case, impact the Board’s determination in notice-and-comment rulemaking as to the ap- propriate test of joint-employer status that would prospectively apply. Our colleague also improperly diminishes the possibility that, irrespec- tive of the joint-employer issue, the General Counsel may have reasona- bly decided that settlements in a case involving complex and novel is- sues, where violation findings are in no way assured, would be the best use of agency resources, especially where the negotiated settlement agreements provide a remedy for every alleged violation. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 8 they are informal, not formal; (b) they require withdrawal of the consolidated complaints before compliance has been effectuated; (c) they do not require the Franchisees to post the notice electronically or include successors and assigns language; and (d) they are not likely to definitively resolve these cases. We find these concerns insufficient to warrant denying approval to the settlements. a. The judge found a formal, rather than an informal, settlement necessary because the hearing had already opened.29 As the General Counsel correctly points out, however, the Board’s Rules and Regulations contemplate the possibility of approving informal settlement agree- ments even after a hearing has begun.30 Informal settlement agreements are ubiquitous in Board practice because they are effective. If a respondent breaches an informal settlement agreement containing a default judgment provision, it is subject to immediate de- fault proceedings and has waived the right to challenge the underlying complaint allegations on the merits. Im- portantly, informal settlement agreements have a strong track record of conclusively resolving unfair labor prac- tice disputes. In Fiscal Years 2017 and 2018, parties en- tered into 1472 and 1401 informal settlements, respec- tively.31 In those same fiscal years, according to records maintained by the Office of the Executive Secretary, the Board considered motions seeking default judgment for breach of an informal settlement agreement in only 6 and 12 cases, respectively. These settlements stick; respond- ents know that failing to comply with informal settlements is at their own peril. The judge also concluded that a formal settlement is warranted because the Respondents are “repeat offenders” under General Counsel Memorandum 18-03, Report on the Midwinter Meeting of the ABA Practice and Proce- dure Under the National Labor Relations Act Committee of the Labor and Employment Section. But General 29 A formal settlement provides for entry of a Board order, typically subject to uncontested summary enforcement in the court of appeals, di- recting the respondent to comply with the settlement’s terms. See Board’s Rules and Regulations Sec. 101.9(b). Once judicially enforced, a party breaches the settlement at risk of contempt of court. By contrast, in an informal settlement, the parties typically agree to enforce the terms of their agreement through default judgment proceedings. If respondent breaches the settlement, the Regional Director may reissue the with- drawn complaint, and respondent has waived its right to contest the mer- its of the settlement unfair labor practice allegations, providing for an expedited Board order running against it. Id., at Sec. 101.9(d). 30 See Sec. 101.9(d)(1) of the Board’s Rules and Regulations (“If the settlement occurs after the opening of the hearing and before issuance of the administrative law judge’s decision and there is an all-party informal settlement, the request for withdrawal of the complaint must be submit- ted to the administrative law judge for approval.”). See also NLRB Di- vision of Judge’s Bench Book Sec. 9–410 (“Either type of settlement may be utilized at any time after a charge has been filed, although nor- mally informal settlement agreements are not accepted after the case has Counsel Memorandum 18-03 is not an official statement of agency policy. Rather, it is simply a memorandum transmitting to the Regions a letter from the General Counsel to the American Bar Association explaining his approach to case handling matters. Moreover, by its own terms, General Counsel Memorandum 18-03 states that progressive formality in settlement is typical “[i]n situa- tions where a charged party has been found by the Region to have violated the Act in the past.”32 The judge found many of the Franchisees to be “repeat offenders” solely because a single entity owned several franchises alleged to have committed unfair labor practices in this case. The judge, however, did not cite any prior informal settlement agreements “in the past” involving the Franchisees that warranted the use of a formal settlement now. General Counsel Memorandum 18-03 is therefore inapposite. b. The judge was also troubled that the settlements re- quired the General Counsel to move for withdrawal of the consolidated complaints within 10 days after their ap- proval. The judge stated that “given the unprecedented and enormous resources expended in connection with this case[,] . . . an informal settlement which provides for the anomalous withdrawal of the Consolidated Complaint in 10 days without full compliance is manifestly unreasona- ble.”33 However, because of the unusual complexity of the consolidated complaints in this case, we believe that withdrawal of the complaints before compliance has been effectuated is appropriate. Failure to withdraw the consolidated complaints would tether the Franchisees together throughout compliance, and, as the General Counsel explains, a breach of one set- tlement agreement would therefore be a default on all of the allegations in the complaints with which it was con- solidated, thereby implicating other Franchisees and McDonald’s. By withdrawing the consolidated com- plaints, each Region can police each settlement been heard and the Board has issued a cease-and-desist and affirmative order based on the record.”). 31 Letter from the NLRB to the ABA Practice and Procedure Under the National Labor Relations Act Committee of the Labor and Employ- ment Section at 2 (Feb. 25, 2019), available at www.ameri- canbar.org/content/dam/aba/events/labor_law/2019/MWM/pp- papers/nlrb-response-to-committee-letter.pdf. 32 See General Counsel Memorandum 18-03 (“In situations where a charged party has been found by the Region to have violated the Act in the past, Regions typically will progressively increase the formality of agreements and may decline to agree to inclusion of a nonadmissions clause, or decline to agree to an informal settlement, instead insisting on a formal stipulation. Whether to agree to any given settlement or not is left to the discretion of the Regional Director.”). 33 See also NLRB Casehandling Manual (Part One), Unfair Labor Practice Proceedings, Sec. 10154.4 (directing that, when a settlement is reached after a hearing opens, the General Counsel should move for an indefinite adjournment and only seek withdrawal “[a]fter compliance has been effected”). MCDONALD’S USA, LLC 9 individually. Further, even after withdrawal of the con- solidated complaints, the settlements’ default judgment provisions will ensure that the Respondents refrain from engaging in unlawful activity and from evading their af- firmative obligations under the settlements. As previously noted, each settlement provides that, in the event of a breach within 9 months after approval, the Regional Di- rector may reinstate the relevant complaint allegations and move for default judgment and a court order against the Franchisee or, if applicable, the Franchisee and McDon- ald’s. Even after the default provision expires, the Board remains capable of effectuating a remedy if a Franchisee fails to honor the terms of the settlement agreement.34 c. We additionally find that the lack of electronic post- ing and the omission of the traditional language binding “officers, agents, successors, and assigns” do not warrant rejection of the settlement agreements. Electronic posting is frequently absent from even formal settlement agree- ments, and the Board has approved settlement agreements that lack notice posting entirely.35 Moreover, at this point in the proceedings, there is no evidence that the Respond- ents regularly communicate with employees electroni- cally. The settlement agreements ensure that a paper copy of the notice, in which the Franchisee promises to refrain from unlawful activity and explains the actions taken to remedy its alleged bad acts, will be posted at each of the Franchisee restaurants where unfair labor practices were allegedly committed. In addition, former employees of the Franchisee at those restaurants will receive a paper copy of the notice in the mail. Similarly, successors and assigns language is typically absent from informal settlement agreements. We share the concerns of the judge and the Charging Parties regarding the reported changes in ownership at several Franchisee restaurants. However, these concerns are ameliorated by the General Counsel’s assurances that the Franchisees have already complied with most of their obligations un- der the settlement agreements, including their monetary obligations. d. Next, we find that the judge erred by rejecting the settlement agreements because they are not likely to 34 That is, if a Franchisee engages in post-settlement conduct that is alleged either to violate the Act or the terms of a settlement agreement, the Board may not only consider the new allegations, but may also rein- state the relevant charges and complaint allegations that were withdrawn pursuant to the settlement agreements. See Wallace Corp. v. NLRB, 323 U.S. 248, 254–255 (1944) (approving the Board’s policy of setting aside settlement agreements “where subsequent events have demonstrated that efforts at adjustment have failed to accomplish their purpose, or where there has been a subsequent unfair labor practice”); Nations Rent, Inc., 339 NLRB 830, 831 (2003) (reaffirming Board’s longstanding position that a settlement agreement may be set aside and unfair labor practices found based on pre-settlement conduct if there has been a failure to com- ply with the provisions of the settlement agreement). conclusively resolve these cases. In so finding, the judge relied on what she perceived as “the parties’ propensity for additional litigation”; the “complicated default process” in the settlements under which the Respondents would be permitted to contest an allegation that a settlement agree- ments was breached; and the “substantial and troubling level of confusion” regarding McDonald’s obligations un- der the settlement agreements, which the judge found “raise[s] significant doubt as to whether there was a genu- ine meeting of the minds.” We believe these settlement agreements are likely to conclusively end this litigation. As explained above, in- formal settlements are a time-tested and effective tool in settling cases, with an extremely low default rate. Alt- hough we understand why the judge would be skeptical after the difficult and contentious litigation below, there is no indication that any of the parties have acted in bad faith or that they have entered into the settlement agreements without a good-faith intent to comply with their terms. As for the judge’s concern that the default provision would permit the Respondents to contest an allegation that a settlement agreement was breached, we note that the Board has held that it would be a denial of due process to issue a default judgment for noncompliance with a settle- ment agreement without giving the charged party notice and an opportunity to be heard regarding the alleged non- compliance.36 On a practical note, we believe that the de- fault provisions actually conserve resources because the only issue that the Respondents are permitted to contest under the default provisions is whether the settlement agreement was in fact breached. Finally, the record does not support the judge’s deter- mination that there was no meeting of the minds. It is true that certain statements made at the hearing by the General Counsel and McDonald’s regarding McDonald’s obligations under the Special Notice and Settlement Fund provisions appear to conflict. Considered as a whole, however, their subsequent statements and briefs to the judge—as well as their clarification in pleadings to 35 See, e.g., McKenzie-Willamette Medical Center, 361 NLRB 54, 56 (2014) (approving settlement agreement that lacks notice posting); Long- shoremen ILA Local 1814 (Amstar Sugar), 301 NLRB 764, 765 (1991) (approving settlement agreement that lacks notice posting because the purposes of the Act are best served by settlement “even at the cost of public vindication of the unfair labor practice”); Independent Stave, 287 NLRB at 743 (same). 36 ConAgra Foods, Inc., 365 NLRB No. 102, slip op. at 3 (2017). In fact, the standard default language set forth in the Board’s Casehandling Manual expressly provides that the charged party shall be permitted to contest an allegation of noncompliance. See NLRB Casehandling Man- ual (Part One), Unfair Labor Practice Proceedings, Sec. 10146.7(b). DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 10 the Board37—demonstrate a coherent and consistent un- derstanding of their obligations under the settlement agreements. IV. CONCLUSION In summary, we find that, in denying approval of the settlement agreements, the judge misapplied the standard set forth in Independent Stave. Applying that standard, we find that the first factor is inconclusive and factors two, three, and four favor approval. Thus, we conclude that the settlement agreements serve the policies underlying the Act as well as the Board’s longstanding policy encourag- ing the amicable resolution of disputes. Accordingly, IT IS ORDERED that the appeals are granted, the admin- istrative law judge’s order is vacated, and the judge is di- rected to approve the settlement agreements. IT IS FURTHER ORDERED that the proceeding is remanded to the judge for further appropriate action consistent with this Order. Dated, Washington, D.C. December 12, 2019 ______________________________________ Marvin E. Kaplan, Member ________________________________________ William J. Emanuel Member (SEAL) NATIONAL LABOR RELATIONS BOARD 37 We are not persuaded by the Charging Parties’ argument in their opposition brief that there was no “meeting of the minds” because the General Counsel opined in his brief that in the event a Franchisee fails to post the full Notice, McDonald’s is required to enclose the full Notice along with the Special Notice it mails to the Franchisee’s employees. The General Counsel acknowledged in his reply brief that the settlement agreements do not expressly require McDonald’s to “enclose” the full Notice, but he contends that is “the most reasonable interpretation of what would be required” if a Franchisee failed to post the full Notice. Moreover, McDonald’s has stated that it agrees with the General Coun- sel’s interpretation. See Jam Productions, Ltd., 367 NLRB No. 30, slip op. at 2—3 fn. 7 (2018) (rejecting the judge’s conclusion that the parties’ settlement agreement was ambiguous and that there was no “meeting of the minds” because the settlement was silent on its face regarding sen- iority rights and the General Counsel had opined after the settlement was signed that seniority rights were implicitly reserved in the settlement). 1 The Charging Parties have filed a motion seeking the recusal of Member Emanuel. He has chosen to participate in the Board’s decision, for reasons he has explained there, following consultation with the Board’s Designated Agency Ethics Official (DAEO). I interpret the Charging Parties’ motion as directed to Member Emanuel individually, not to the Board itself. For that reason, and because I dissent from the Board’s decision in any case, I do not address the motion. As I have previously noted, the Board’s rules—in contrast to those of certain other MEMBER MCFERRAN, dissenting.1 The National Labor Relations Board is “not required to . . . give effect to all settlements reached by the parties to a dispute,” because the Board’s “‘function is to be per- formed in the public interest and not in vindication of pri- vate rights.’”2 At the urging of the current General Coun- sel, the majority today disposes of a mammoth and im- portant joint-employer case under the National Labor Re- lations Act—before it requires the Board to apply a prec- edent that both the majority and the current General Coun- sel have tried unsuccessfully to repudiate. Reversing the administrative law judge, the majority approves a series of informal settlement agreements (omitting a Board order) that do not impose joint and several liability on McDon- ald’s as a joint employer and that prevent a complete evi- dentiary record from being developed here. The major- ity’s decision is based on application of the wrong stand- ard of review, and it reaches a result that plainly does not “effectuate the purposes and policies” of the National La- bor Relations Act.3 This case is best understood in the context of the Board’s recent efforts to address joint-employer doctrine. In the 2015 Browning-Ferris decision, the Board rejected an improperly narrow joint-employer standard and adopted a new approach, consistent with common-law principles and better suited to achieve the goals of labor law in the current economy.4 That decision has been largely upheld by the District of Columbia Circuit.5 A new Board majority, however, first overruled Browning- Ferris in the ultimately vacated Hy-Brand decision6 and then issued a notice of proposed rulemaking intended to supplant the new joint-employer standard.7 The current administrative agencies—do not address the question of disqualification of a Board member by the Board as a body, and the Board’s practice in that regard has varied over the years. Hy-Brand Industrial Contractors, Ltd., 366 NLRB No. 93, slip op. at 5 fn. 4 (2018) (concurring opinion) (collecting cases). I believe that the Board should adopt such a rule. See National Labor Relations Board, Ethics Recusal Report (Nov. 19, 2019) (Statement of Member McFerran), available at www.nlrb.gov/re- ports/other-agency-reports/ethics-recusal-report. 2 Independent Stave Co., 287 NLRB 740, 741 (1987), quoting Rob- inson Freight Lines, 117 NLRB 1483, 1485 (1957). 3 Independent Stave, supra, 287 NLRB at 741. 4 BFI Newby Island Recyclery, 362 NLRB 1599 (2015). 5 Browning-Ferris Industries of California, Inc. v. NLRB, 911 F.3d 1195 (D.C. Cir. 2018). 6 Hy-Brand Industrial Contractors, Ltd., 365 NLRB No. 156 (2017), vacated 366 NLRB No. 26 (2018). With Member Pearce, I dissented from the original decision. 365 NLRB No. 156, slip op. at 35 (dissenting opinion). 7 National Labor Relations Board, The Standard for Determining Joint-Employer Status, Notice of Proposed Rulemaking, 83 Fed. Reg. 46681 (Sept. 14, 2018). I dissented. Id. at 46687 (dissenting view). I pointed out, among other things, that it was ill-advised for the Board to proceed with rulemaking until it had the benefit of the District of Colum- bia Circuit’s decision in Browning-Ferris, supra, which issued only after MCDONALD’S USA, LLC 11 General Counsel, meanwhile, has been unrelenting (if so far unsuccessful) in his own attacks on Browning-Ferris. He has defended the vacated Hy-Brand decision,8 has sub- mitted a comment in the current rulemaking insisting that the majority’s proposed joint-employer standard is itself too broad,9 and has argued on remand the District of Co- lumbia Circuit’s Browning-Ferris decision was wrong.10 The General Counsel’s effort to settle this case over the objection of the Charging Parties is part of the same course of conduct, as is the majority’s approval of the settlements. Administrative Law Judge Esposito, who has handled this epic proceeding with extraordinary skill and determi- nation, rejected the settlements. She persuasively ex- plained why in a detailed decision. Consistent with prec- edent, the Board is required to review the judge’s decision for abuse of discretion,11 but the majority does not apply the proper standard of review. If it did, the outcome here would be different. Plainly, the judge did not abuse her discretion in rejecting the proposed settlements, based on her application of the established Independent Stave crite- ria.12 Her decision was not merely proper, it was correct. The proposed settlements are unreasonable. As the judge observed, the settlements’ “unusual and complicated form and enforcement mechanisms, coupled with the parties’ evident confusion and history of antagonism, virtually guarantee that the settlements will not definitively end the case,” and on their own terms, the settlements are flawed. The heart of this proceeding is the allegation that McDon- ald’s is a joint employer with certain franchisees. A find- ing of joint-employer status, of course, would have im- portant collateral consequences for McDonald’s, in both unfair labor practice proceedings involving its franchisees and in possible representation cases, if workers employed at McDonald’s franchisees sought to organize. The the notice of proposed rulemaking. The proposal cannot be reconciled with the court’s decision largely upholding the Board’s Browning-Ferris decision. 8 See Hy-Brand, supra, 366 NLRB No. 93, slip op. at 1 (noting Gen- eral Counsel’s position); id., slip op. at 3–4 (concurring opinion) (ad- dressing General Counsel’s arguments); General Counsel’s Response to Motion for Reconsideration of the Board’s Order Vacating Decision and Order (April 5, 2018). 9 General Counsel’s Comment (Dec. 10, 2018), RIN 3142-AA13. 10 Counsel for the General Counsel’s Statement of Position in Re- sponse to the Remand of the D.C. Circuit, BFI Newby Island Recyclery, Case No. 32–CA-–-160759 (2019). 11 See, e.g., Pueblo Sheet Metal Workers, Inc., 292 NLRB 855, 855 fn. 3 (1989) (denying special appeal to review administrative law judge’s decision to permit General Counsel to withdraw complaint, because judge “did not act arbitrarily or capriciously or otherwise abuse his dis- cretion”). 12 Independent Stave, supra. Independent Stave was decided by the Board on summary judgment. 287 NLRB. at 740. It did not involve Board review of an administrative law judge’s decision. prospect of such consequences makes this a case with very high stakes. The General Counsel, however, has folded, despite the fact that (in the judge’s words) he “adduced a significant quantum of evidence . . . that McDonald’s and the Fran- chisee Respondents engaged in a coordinated effort to ef- fectuate a ‘mutual interest in warding off union represen- tation’ of employees” at the franchisees’ locations, yet the “circumscribed involvement of McDonald’s in the . . . [proposed] remedies does not begin to approximate the re- medial effect of a finding of joint employer status.” The judge described the decision of General Counsel Robb to pursue settlement just before the hearing record closed as “simply baffling,” noting that the case is indisputably gov- erned by the Browning-Ferris standard, which is even more favorable to the General Counsel than the joint-em- ployer standard in place when the case began. Put simply, it appears clear that the General Counsel is settling the case after years of effort on the eve of its culmination, de- spite a strong record, because he is desperate to ensure he does not prevail. Now the majority arbitrarily puts the Board’s stamp of approval on the General Counsel’s actions. Today’s deci- sion, unfortunately, continues a pattern in which the Board permits employers to avoid determinations of their status under the Act by purported settlement (including mis- named “consent settlement agreements” actually opposed by both the General Counsel and the charging party),13 while illustrating a double standard for resolving cases without reaching the merits.14 Because I cannot condone this course of action, I dissent. I. A brief review of the history of this proceeding—which the administrative law judge has described as the “largest case ever adjudicated” by the Board—is in order. 13 See UPMC, 365 NLRB No. 153 (2017) (approving “consent set- tlement agreement” opposed by both General Counsel and charging party, in lieu of deciding single-employer status). I dissented there, as did Member Pearce. See id., slip op. at 11, 16 (dissenting opinions). 14 Compare this decision with a recent decision in which the majority refused to permit a union to withdraw its unfair labor practice charge in part, in order to allow the General Counsel (who had switched positions) to pursue the reversal of Board precedent (with the support of the re- spondent employer). 800 River Road Operating Co., LLC, 368 NLRB No. 60 (2019). There, said the majority, the case “presented the Board with an opportunity to address significant issues of law under the Na- tional Labor Relations Act.” Id., slip op. at 1. This case certainly raises such issues, and—in contrast to 800 River Road—it presents a live con- troversy, assuming the case were prosecuted in good faith by the General Counsel. The difference, of course, is that while in River Road, the ma- jority requires a vehicle to reverse precedent, here it wishes to avoid hav- ing to apply precedent with which it disagrees. (I dissented in 800 River Road because the issue was moot.) DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 12 The respondent employers are McDonald’s, a McDon- ald’s subsidiary, and several McDonald’s franchisees. The complaints in these consolidated cases—which involve nationwide allegations of unfair labor practices in re- sponse to a fast-food workers’ organizing campaign, “Fight for $15”—were issued in December 2014 by then- General Counsel Richard Griffin. These are serious alle- gations. They involve a calculated, coordinated response to employees’ protected activity. The complaints allege that ten franchisees violated Section 8(a)(3) and (1) by dis- charging three discriminatees, suspending 17 others, re- ducing employees’ work hours, or sending employees home early. Other franchisees allegedly violated Section 8(a)(1) by threatening employees, promising them bene- fits, and interrogating and surveilling them. McDonald’s is alleged to have possessed or exercised sufficient control over these franchisees to be a joint employer with them.15 The hearing opened in March 2015 before Judge Espos- ito and, as the majority observes, “proceeded for the next several years, focused primarily on McDonald’s status as a joint employer.” This was, the judge observed, the “longest hearing the agency has ever conducted.” During the course of the hearing, the Board decided Browning- Ferris in August 2015, broadening the joint-employer standard; General Counsel Griffin’s term ended in Octo- ber 2017; Griffin was succeeded by General Counsel Peter Robb in November 2017; a new Board majority reversed Browning-Ferris in December 2017 in the original Hy- Brand decision;16 and Hy-Brand was vacated—and the Browning-Ferris joint-employer standard reinstated—in February 2018.17 The settlement agreements at issue now were presented to the administrative law judge on March 19, 2018, just days before the years-long hearing was set to close—and soon after it became clear that Browning-Ferris remained controlling law. By that point, as Judge Esposito has pointed out, the General Counsel had “adduced a veritable deluge of evidence regarding McDonald’s response to the Fight for $15 campaign, some of which implicates the Franchise Respondents’ conduct.” The judge’s decision details that evidence, including among other things: (1) evidence that “McDonald’s response to the Fight for $15 campaign was formulated and implemented from its cor- porate headquarters, with notifications of upcoming cam- paign activities, summaries of events, and suggested poli- cies developed and distributed by” a high-level official; (2) evidence that McDonald’s specifically created corpo- rate positions “to focus on responding to the Fight for $15 15 As the administrative law judge noted, since the beginning of the case, the General Counsel has “contended that McDonald’s coordinated and directed the activities of its franchisees’ response to the Fight for $15 campaign, which included the violations of the Act alleged here.” campaign; (3) evidence of “communication with McDon- ald’s franchisees regarding impending, ongoing, and com- pleted campaign activities;” (4) evidence “regarding legal training, organized by McDonald’s, provided by attorneys to franchise owners and managers at franchise owner-op- erator organizations, which specifically addressed labor relations issues;” (5) evidence regarding “McDonald’s in- volvement in the retention of labor consultants by Fran- chisee Respondents; and (6) evidence regarding “McDon- ald’s involvement in No Solicitation and No Loitering pol- icies for use by its franchisees.” The settlement agreements here are “informal” in Board parlance: they do not include the issuance of a judicially- enforceable Board remedial order against the Respond- ents. The settlements impose no liability of any kind on McDonald’s, nor can they be used as evidence of joint- employer status. McDonald’s has made no financial con- tribution to the settlements, it appears. Among the key el- ements of the settlements is a requirement that Franchisee Respondents pay backpay to employees who were dis- charged or had their hours reduced unlawfully. The Fran- chisees must also restore working conditions, rescind un- lawful rules, post notices, and mail notices to former em- ployees. If a Franchisee defaults within nine months of approval of the settlement, the Regional Director may issue a so- called ‘Merits Complaint’ against that individual franchi- see. Should the breach remain uncured after 14 days, the Regional Director will provide McDonald’s with special notices for McDonald’s to mail to the breaching Franchi- see’s employees. However, these notices state that McDonald’s only disavows the conduct as a party to the settlement and that the notice does not constitute admis- sion of joint employer status. Some of the settlements also create a Settlement Fund comprising money that McDonald’s collects from the Franchisees (with no contributions from McDonald’s) and deposits with the Board. McDonald’s has no financial role in compensating discriminatees. This money will be used to pay an eligible employee entitled to a remedy as a result of a Franchisee’s uncured breach of a settlement within nine months of the settlements’ approval. Liability for Set- tlement Fund payments, however, is very narrowly de- fined. To be liable, a Franchisee must commit a violation that is identical to that alleged in the consolidated com- plaint; liability is not triggered if, for example, a Franchi- see was alleged to have reduced an employee’s hours in retaliation for protected activity, but subsequently 16 365 NLRB No. 156. 17 366 NLRB No. 26. MCDONALD’S USA, LLC 13 discharges that employee (or another employee) instead. Similarly, if the consolidated complaint alleged a Franchi- see violated the Act, but that violation was not one result- ing in backpay liability, the Franchisee will not be liable under the Settlement Fund.18 Contrary to standard Board practice, the settlements re- quire the General Counsel to withdraw the consolidated complaint within 10 days after approval of the settlements. Thus, if there is a subsequent failure to abide by the agree- ments, the usual practice of seeking default judgment on the existing and long-litigated complaint would not be available. Rather, in the event of default by a Franchisee or McDonald’s within nine months after approval of the agreements, the Regional Director would notify McDon- ald’s and the Franchisee of the breach and give the Fran- chisee 14 days to cure. If it does not do so, the Regional Director would have to bring a new “Merits Complaint” against that Franchisee alone. There would be no joint- employer allegations pertaining to McDonald’s. The Gen- eral Counsel would then file a motion for default judgment against the Franchisee on the allegations of the new Merits Complaint. II. Judge Esposito rejected the settlements, applying the standard set out in Independent Stave, and expressing a variety of concerns (detailed below) about the form of the 18 If the subsequent uncured breach does qualify for the Settlement Fund, an employee may choose backpay from the Fund and reinstate- ment or, in the alternative, waive reinstatement and receive backpay plus an extra payment from the Fund (equal to 500 hours of pay in cases of discharge; 200 hours in cases of reduction of hours). This latter waiver would also mean dismissal of the unfair labor practice charges against the Franchisee. 19 See, e.g., ABM Onsite Services-West, Inc. v. NLRB, 849 F.3d 1137, 1146–1147 (D.C. Cir. 2017). Furthermore, the Board’s well-established practice is that a two-member panel majority, such as the one here, will not reverse Board precedent, because it does not comprise a majority of the Board’s five statutory members. See Hacienda Resort Hotel & Ca- sino, 355 NLRB 742, 743 & fn. 1 (2010) (concurring opinion of Chair- man Liebman and Member Pearce) (collecting cases). 20 292 NLRB at 855 fn. 3. See generally Sheet Metal Workers Local 28 (American Elgen), 306 NLRB 981, 982 (1992) (once evidence is in- troduced at hearing, dismissal of complaint “takes on the character of an adjudication” and is matter within “discretionary authority” of adminis- trative law judge, not General Counsel). The majority cites Independent Stave for the view that “approval of an informal settlement agreement is always within the discretion of the Board.” My colleagues rely on the Board’s statement there that “upon a motion of one or both of the parties to defer to a settlement agreement in lieu of further proceedings upon a complaint, the Board, after consider- ing any objection raised by the General Counsel, will determine in its own discretion, ‘whether under the circumstances of the case, it will ef- fectuate the purposes and policies of the Act to give effect to any waiver or settlement of charges of unfair labor practices.’” Independent Stave, 287 NLRB at 741. But the majority takes this quote out of context. Ex- amined closely, it cannot bear the weight the majority gives it. First, In- dependent Stave involved a motion for summary judgement made to the settlement, its enforceability, the level of resources al- ready expended in the case, and the likelihood of future litigation, among other issues. The majority now con- cludes that the judge “misapplied the standard set forth in Independent Stave,” vacates the judge’s order, and directs the judge to approve the settlement agreements. The ma- jority’s conclusion is based on what is effectively de novo review of the judge’s decision. The majority asserts that the Board has broad discretion to determine whether to ap- prove settlement agreements and then states that it “appl[ies] that broad discretion to [its] review of the judge’s decision.” In fact, however, our precedent makes clear that the Board reviews an administrative law judge’s decision to approve or reject a settlement for abuse of dis- cretion. Whatever discretion the Board may have in this area, it is not free to ignore its own precedent.19 As I will explain, Judge Esposito most certainly did not abuse her discretion here. Abuse of discretion is the proper standard of review, as the Board’s 1989 decision in Pueblo Sheet Metal Workers, supra, illustrates.20 Indeed, just a few months ago, my col- leagues in the majority applied that standard to endorse a judge’s approval of a consent order over the objection of the General Counsel.21 There is no shortage of similar cases applying the abuse of discretion standard with re- spect to a judge’s decision as to a settlement.22 Board. In that circumstance, the Board exercises its own discretion. Where, in contrast, the Board reviews the decision of an administrative law judge, it is the judge whose discretion is at issue. Second, the ma- jority cites no cases supporting a de novo standard of review for evalu- ating a judge’s ruling on a settlement. For example, in Flint Iceland Are- nas, 325 NLRB 318 (1998), the Board analyzed the Independent Stave factors and revoked the settlement without explaining what standard of review it was applying. The Board’s unexplained decision does not sanc- tion the apparently de novo standard of review that the majority applies here. The same is true for International Shipping Agency Inc., 24–CA– 091723, 2015 WL 1802717. By contrast, the cases I cite below expressly apply an abuse of discretion standard. Finally, even if the majority had identified Board cases applying some other standard of review, that would at most show an inconsistency in the Board’s law on this question. In such cases, the Board must choose between the relevant lines of prec- edent and explain the reasons for its choice. ABM Onsite Services v. NLRB, 849 F.3d 1137, 1146 (D.C. Cir. 2017) (“[T]he requirement that an agency provide reasoned explanation for its action demands that it display awareness that it is changing position . . . [t]hus, when the Board fails to explain—or even acknowledge—its deviation from established precedent, its decision will be vacated as arbitrary and capricious.”) (in- ternal citations omitted); E.I DuPont De Nemours v. NLRB, 682 F.3d 65, 67 (D.C. Cir. 2012) (“We will uphold a decision of the Board unless it…departed from its precedent without providing a reasoned justifica- tion for doing so.”). The majority has not done so. 21 Bodega Latina Corp., d/b/a El Super, 2019 WL 2435789, No. 28— CA—170463 (June 10, 2019). 22 See, e.g., Apex Tool Group, LLC, 2017 WL 2963206, No. 09–CA– 176346 (July 7, 2017) (denying General Counsel’s appeal of judge’s ap- proval of settlement); Kiss Electric, LLC, 2017 WL 279421, No. 04–CA– 164351 (June 27, 2017) (denying General Counsel’s appeal of judge’s DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 14 The well-established abuse of discretion standard is also a sensible one, considering the respective functions of ad- ministrative law judges and the Board. When it comes to deciding whether to approve or reject a settlement, the judge is in a better position than the Board to apply the Independent Stave factors: she has presided over the case from the beginning and is intimately familiar with the rec- ord evidence and the procedural history—every aspect of the litigation, in other words. Deferential review is thus appropriate. That is obviously true with respect to this uniquely long and complicated proceeding. There should be no question that Judge Esposito knows this case better than we do. In a case involving a Regional Director’s refusal to ac- cept an informal settlement, notwithstanding the Board’s policy to encourage settlements, the Board adopted the judge’s finding that there was no abuse of discretion, i.e., discretion “exercised to an end or purpose not justified by and clearly against reason and evidence.”23 Here, Judge Esposito had the discretion to approve or reject the settle- ments, and her decision to reject them was not “clearly against reason and evidence.” To the contrary, the judge’s decision was correct. III. There is no dispute that Judge Esposito applied the cor- rect legal standard for determining whether to approve a settlement, the Independent Stave test, which “examines all the surrounding circumstances, including but not lim- ited to”: (1) whether the charging party, the respondent, and any of the individual discriminatees have agreed to be bound, and the position taken by the General Counsel regarding the settlement; (2) whether the settlement is reasonable in light of the nature of the violations alleged, the risks inherent in liti- gation, and the stage of the litigation; (3) whether there has been any fraud, coercion or duress by any other parties in reaching the settlement; and approval of settlement); Ports America Outer Harbor, LLC, 2016 WL 6833983, No. 32–CA–110280 (Nov. 18, 2016) (denying charging party’s appeal of judge’s approval of settlement); Children’s Law Center of Los Angeles, 2016 WL 6441583, No. 21–CA–165280 (denying charging party’s appeal of judge’s approval of settlement); Enclosure Suppliers, LLC, 2011 WL 2837659, No. 09–CA–46169 (July 14, 2011) (granting Acting General Counsel’s appeal of order approving consent order). See also Henke v. NLRB, 182 F.3d 917 (6th Cir. 1999) (unpublished) (reject- ing argument that administrative law judge abused discretion in approv- ing informal settlement). (4) whether the respondent has engaged in a history of violations of the Act or has breached previous settlement agreements resolving unfair labor practice disputes. 287 NLRB at 743.24 The “surrounding circumstances” here, of course, include the importance of the joint-employer issue to the development of the law and to the employers and em- ployees involved here, the massive size of the proceeding, and the current General Counsel’s demonstrated hostility to- ward the governing Browning-Ferris standard. These cir- cumstances, of course, weigh strongly against permitting the premature termination of the case just before the hearing was set to close. The judge’s focus was on Independent Stave Factor 2, the reasonableness of the settlements, and as I will explain, she reasonably (and, indeed, correctly) exercised her discretion to find that the settlements were not reasonable and to give that factor decisive weight. But a proper understand- ing of this case first requires examining the position of the parties and, in particular, the posture of the current General Counsel. A. The majority agrees with the judge—if equivocally— that Independent Stave Factor 1, the position of the parties, is “inconclusive” here, given the Charging Parties’ “strong opposition” to the settlements. It observes, nevertheless, that the “General Counsel’s support for the settlement agreements is an important consideration, especially when he yields on prosecuting an aspect of the complaint to vin- dicate other public rights.” If anything, the opposition of the Charging Parties25 is entitled to greater weight here, given the overwhelming evidence here that the current General Counsel has been and remains opposed to the suc- cessful prosecution of this case to establish the joint-em- ployer status of McDonald’s under controlling Board law, the Browning-Ferris standard. The complaint in this case—issued by then-General Counsel Griffin—alleges that McDonald’s is a joint em- ployer with the franchisees. As explained, General Coun- sel Robb, who inherited the case, has attacked the Brown- ing-Ferris standard at every opportunity: in opposing the Board’s decision to vacate Hy-Brand, which had improp- erly overruled Browning-Ferris; in submitting a comment to the Board in connection with its rulemaking proposal to 23 San Francisco Local Joint Executive Board of Culinary Workers, 196 NLRB 633, 634 (1972). 24 The Independent Stave Board took care to point out that it was not “provid[ing] an exhaustive list of all the factors which may become rel- evant in individual cases.” 287 NLRB at 743. 25 There are 20 alleged discriminatees affected by these settlement agreements. Of these, only the three who were discharged have expressly agreed to the terms of the settlements by executing a waiver of reinstate- ment and agreeing to receive front pay in lieu of that reinstatement along with any backpay owed. MCDONALD’S USA, LLC 15 repudiate the Browning-Ferris standard; and in urging the Board, on remand, to reject the decision of the District of Columbia Circuit largely upholding Browning-Ferris. It seems clear, then, that the proposed settlements here re- flect less the General Counsel’s good-faith efforts to en- force Board law and more the desire to avoid the applica- tion and development of existing law in an important case—and so to advance a policy view contrary to Board law.26 The majority describes the General Counsel’s effort to end this case as “yield[ing] on prosecuting an aspect of the complaint to vindicate other public rights.” But it should be clear that the current General Counsel has never been committed to prosecuting the core aspect of the complaint here: the allegation that McDonald’s is a joint employer. The settlements with McDonald’s, of course, now explic- itly align the General Counsel and the company in a com- mon effort to avoid any possibility of a joint-employer finding by the Board. The settlements that the majority ap- proves today achieve that goal: they do not include a joint- employer admission and they omit any remedial conse- quences for McDonald’s that would come with a joint-em- ployer finding. In this context, the opposition of the Charging Parties—whose unfair labor practice charges were a prerequisite for this litigation—is entitled to great weight. They oppose the supposed trade-off made here by the General Counsel. In these circumstances, their oppo- sition to the settlement—and their commitment to pursu- ing enforcement of current law—suggests a greater com- mitment to the public interest. B. In rejecting the proposed settlements, however, Judge Esposito did not treat them as suspect for the reasons that I have suggested. She carefully determined that the settle- ments failed to pass muster under Independent Stave Fac- tor 2, which asks “whether the settlement is reasonable in light of the nature of the violations alleged, the risks in- herent in litigation, and the stage of the litigation.”27 As I 26 The General Counsel has publicly expressed his desire to severely limit joint-employer status. In his rulemaking comment to the Board, the General Counsel not only agreed with the proposal to overturn Brown- ing-Ferris, but also argued that the Board’s proposed rule did not go nearly far enough. The General Counsel argued for a Board rule that would require the purported joint employer to “control all listed essential terms and conditions of employment factors,” including determination of wages, benefits, hiring/firing, and discipline, supervision, and direc- tion of employees. General Counsel’s Comment at 8–9. In the General Counsel’s view, a joint employer finding should be “rare.” At no point in the Board’s history has it followed such a restrictive approach. The General Counsel’s policy view is reflected as well in his brief to the Board, following the District of Columbia Circuit’s 2018 remand of Browning-Ferris. There, he argued that the court had exceeded its au- thority and that the Board should “reverse the error” it made in Brown- ing-Ferris and “make clear that only a joint employer standard based on will explain, that determination was correct—not an abuse of discretion. Indeed, there is a strong public interest in ensuring that the important issues here are litigated to con- clusion, not disposed of as if only private rights were in- volved. 1. Given the centrality of McDonald’s alleged status as a joint employer to the case, it would be a mistake not to focus on that issue as a crucial aspect of the “nature of the violations alleged.” As Judge Esposito observed, the “General Counsel’s stated purpose in initiating this case was obtaining ‘a finding that McDonald’s . . . was jointly and severally liable for all of the alleged unfair labor prac- tices . . . because of its status as a [j]oint [e]mployer of the affected workers,’ and ‘to clarify the relationship between franchisor and franchisee’ in the context of Board law re- garding joint employer status.” Indeed, the “vast majority of the evidence and the hearing presentation was directed to the joint employer issue.” The judge was thus correct in relying on the indisputable fact that the “circumscribed involvement of McDonald’s in the informal Settlement Agreements’ remedies does not begin to approximate the remedial effect of a finding of joint employer status.” She accurately described this aspect of the settlement as “pal- try and ineffective given the scope of the allegations, the resources necessary in order to present the case, and the case’s ultimate purpose.” Citing Board precedent,28 Judge Esposito explained that the settlements do not make McDonald’s jointly and sev- erally liable and, in fact, lack any guarantee of the Fran- chisee Respondents’ performance:29 Had [the] General Counsel established that McDonald’s was a joint employer with the Respondent Franchisees, McDonald’s would have been “jointly and severally re- sponsible for remedying” any unfair labor practices the Respondent Franchisees committed…. [The] General Counsel represented … that the objective in initiating this case was establishing McDonald’s joint and several substantial direct and immediate control is workable.” General Counsel’s Statement of Position in Response to the Remand at 8. 27 287 NLRB at 743. 28 See, e.g., Adams & Assos., Inc., 363 NLRB No. 193, slip op. at 1, 7 (2016), enfd. 871 F.3d 358 (5th Cir. 2017). 29 The judge rejected the Respondents’ assertion that a guarantee was infeasible or inappropriate. She cited two reasons: (1) the Franchise Agreements provide McDonald’s with sufficient authority over the Fran- chisees’ operations to guarantee their performance; and (2) under the terms of the settlements, McDonald’s would have the authority to deter- mine “whether and when” money from the Settlement Fund would be provided to employees of the Franchisees in the event of an uncured breach of a settlement, an authority that “contradict[ed] its contention that it lacks the legal or business capacity to guarantee the Franchisee Respondents’ performance.” DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 16 liability… [The] General Counsel further stated that the Special Notice and Settlement Fund components of the Settlement Agreements were specifically intended in lieu of a finding of joint employer status…. Thus, McDonald’s remedial obligations in lieu of joint and several liability are apparently limited to mailing out of a Special Notice if a Franchisee Respondent fails to rem- edy a violation of a Settlement Agreement within 14 days after notification, and to collecting and providing to Regional Directors monies comprising the Settlement Fund to remedy a limited universe of possible future vi- olations. . . . Here there is no guarantee by McDonald’s of the Franchisee Respondent[s’] performance whatso- ever. . . . The Special Notice states that McDonald’s disavows the franchisee’s conduct “[s]olely in its role as a party to the set- tlement” without admitting joint-employer status. And while McDonald’s is to collect funds from the franchisees for the Settlement Fund, it is not required to contribute to the settle- ment fund or otherwise ensure compensation for discrimi- natees. Were the case prosecuted to a joint-employer finding, discriminatees would have a full guarantee that McDonald’s would also be held responsible for any failures to comply by the franchisees. For example, the franchisees are required to pay 100 percent of backpay for allegations requiring a mon- etary remedy as well as premium pay to those discriminatees who were discharged. Franchisees must also restore prior working conditions, rescind unlawful rules, and expunge dis- ciplines and discharges. Under a joint-employer finding, McDonalds itself would also be responsible for ensuring that these remedial measures were completed as required.30 In sum, McDonald’s responsibilities under the settlement agree- ments are minimal, as compared to the consequences of a joint-employer finding. The majority understates matters when it acknowledges only that the settlement agreements are “not identical to the joint and several liability that would have been ordered if McDonald’s were found to be a joint employer.” Even so, the majority states it “understand[s] the judge’s con- cerns about the settlement agreements’ failure, if McDon- ald’s were a joint employer, to hold McDonald’s jointly and severally liable for the remedial provisions of the set- tlement agreements, especially after the extensive litiga- tion on the joint employer issue.” Still, the majority “does not believe that precludes approval,” citing employees’ 30 See, e.g., SOS Staffing Services, 331 NLRB 815, 815–816 (2000). 31 Independent Stave, supra, 287 NLRB at 741. 32 As the judge noted, for example, “[i]f distribution of the Special Notice and disbursement from the Settlement Fund are both solely func- tions of McDonald’s discretion, McDonald’s ‘support’ for the remedies here is utterly illusory.” presumed perspective on the settlement and suggesting that the General Counsel “reasonably adjusted litigation priorities.” The majority’s discussion, however, obscures crucial points. First, the question presented is not whether the judge was required to reject the settlements, but whether she abused her discretion in doing so. Second, focusing on the settlements’ benefits to employees ignores both the oppo- sition of the Charging Parties to the settlements and the fact that the Board’s “function is to be performed in the public interest and not in vindication of private rights.”31 Third, as discussed, the limited responsibility assumed by McDonald’s responsibility undercuts the value of the set- tlements even as to the identified employees. Contrary to the majority’s assertion that the remedy employees would receive under the settlement agreement is “essentially identical to that which they would have received if the General Counsel’s joint employer theory had prevailed,” there are significant differences given that joint and sev- eral liability is not imposed on McDonald’s.32 Finally, the General Counsel’s role in the settlements is hardly a mere matter of “adjust[ing] litigation priorities” in a garden-va- riety case. As explained, it reflects part of a determined attack on existing Board law— by the official with exclu- sive authority to prosecute unfair labor practice cases un- der the Act—in support of a policy view that has never before been endorsed by the Board. Accepting the settle- ments deprives the Board of the opportunity to decide novel and important joint-employer issues, involving em- ployers across the nation, on a full evidentiary record. It leaves the joint-employer status of McDonald’s unre- solved, despite years of litigation.33 2. The judge also appropriately considered the “risks in- herent in litigation” and the “stage of the litigation,” as In- dependent Stave contemplates. Here, both considerations implicate very unusual circumstances. First, it is almost impossible to conclude that the current General Counsel’s decision to pursue settlement here re- flects his assessment of the risk of losing – as opposed to the risk of winning. Given the General Counsel’s demon- strated hostility to the Browning-Ferris joint-employer standard, rather, it seems clear that his overriding aim is to avoid presenting the Board with an opportunity to apply that decision in an important case. 33 The majority errs in characterizing the substance of the judge’s evaluation of the settlements. While the judge considered the failure to resolve McDonald’s joint employer status in her analysis, this was far from her only consideration. As I note below, the settlements fall short under the other Independent Stave factors, given problems with their form, their inability to conclusively resolve the dispute between the par- ties, and consideration of the stage of litigation and the risks involved. MCDONALD’S USA, LLC 17 Second, the stage of the litigation at which settlement was reached—just before the hearing record was com- pleted and the case was submitted to the judge—reinforces this conclusion. The judge described the General Coun- sel’s timing as “simply baffling,” pointing specifically to the fact that settlement efforts preempted the testimony of McDonald’s expert on “brand protection,” which assert- edly privileged its intervention in the affairs of fran- chisees. The inescapable inference is that the General Counsel (not just McDonald’s) was concerned that this ex- pert testimony would offer little support for McDonald’s position. Pursuing settlement at this point, the judge ob- served, was “incomprehensible.”34 The judge was correct, then, when she observed that approval of the settlements, when presented, “would not conserve the significant agency resources expended over the course of three years to create a record on the joint employer issue” and “while there would certainly be exceptions and appeals available in this matter, the work involved would be less onerous and demand fewer resources than the lengthy, arduous trial presentation necessary to create the record thus far.” Given the primary purpose of the litigation—as identi- fied by the General Counsel—the judge reasonably con- cluded that litigation risk did not justify terminating the case when and how the General Counsel and McDonald’s proposed. The majority rejects this conclusion, stating that the case presents “novel and complex issues with un- usual litigation risk.” Even under the Browning-Ferris standard, my colleagues say, “there is no guarantee that McDonald’s would be a found to be a joint employer,” and it is “far from certain that this litigation would achieve the General Counsel’s original goals.” The majority also points to the Board’s pending joint-employer rulemaking as likely to “supplant any standard arising from the litiga- tion of these cases.” Thus, says the majority, it “balance[s] the benefits of settlement against the value of continued litigation differently from the judge.” That the majority strikes a different balance here, however, does not 34 The judge also pointed to the “General Counsel’s machinations in- volving” the Board’s Browning-Ferris and Hy-Brand decisions as “equally perplexing,” because they threatened to hinder—rather than help—his prosecution of this case. 35 The majority’s assertion that the pending rulemaking would mean “a decision regarding joint employer status may have limited preceden- tial value” incorrectly implies that any forthcoming rulemaking will moot any joint employer finding in any case. To the contrary, even after a joint-employer rule is issued, that rule will still have to be applied to the facts of a specific case to determine the employer’s status, including future cases involving McDonald’s. It is not, therefore, a pointless task to look at McDonald’s relationships now. 36 Sec. 101.9(b)(1) of the Board’s Rules and Regulations provide that “[a]fter issuance of a complaint, the Agency favors a formal settlement agreement” with a remedial order. demonstrate the judge abused her discretion, the appropri- ate standard of review. It is certainly true that this case presents “novel and complex issues.” But that is precisely why the case should be litigated to conclusion and then decided by the Board. The Board’s pending rulemaking, in turn, is no proper sub- stitute for adjudicating this case – even putting aside the majority’s erroneous decision to pursue rulemaking in the first place and to repudiate the Browning-Ferris standard largely upheld by the District of Columbia Circuit. The record in the rulemaking may be less developed than the record in this case. And a final rule—assuming it survives judicial review after what surely will be years of litiga- tion—is unlikely to definitively resolve the joint-employer status of any particular statutory employer, including McDonald’s.35 C. Finally, in rejecting the settlement agreements, the judge properly pointed to significant shortcomings in their form. Here, she noted that the Board favors a formal set- tlement after the issuance of a complaint, not the informal settlement offered at the late stage of litigation in this case.36 She also found that requiring the General Counsel to withdraw the consolidated complaint before compli- ance could be established was contrary to standard Board practice. The settlement agreements lacked the Board’s standard language binding a respondent’s successors and assigns (a concern when four of the original ten Franchi- see Respondents or Charged Party locations in New York City have changed ownership and one appears to have ceased operations entirely). The judge found that it did not appear that the settlement would conclusively resolve these cases, particularly given the contentiousness of the parties, the complex provisions of the default and Settlement Fund, and the lack of clarity regarding the impact of notification procedures on the de- fault process. When added to the contradicting represen- tations regarding obligations and processes under the set- tlement agreements,37 the judge determined that the 37 The judge identified several contradictory representations. For ex- ample, the General Counsel initially indicated that if a Franchisee failed to cure an alleged breach of the settlement agreement, it falls to McDon- ald’s to remedy or implement the remedy that the Franchisee failed to carry out. However, on a later date the General Counsel indicated that McDonald’s would only have to mail out a Special Notice, not carry out the remedy in full. In addition, the General Counsel’s characterization in a posthearing brief of McDonald’s as having discretionary authority regarding Settlement Fund disbursements contradicted earlier statements from the parties that the disbursements were mandatory in the context of the default process. These contradictions suggest that the obligations imposed on the Franchisees and McDonald’s, as well as the way in which they are to execute those obligations, are less than clear. In such a large case involv- ing a number of Regions, the concern grows. Notwithstanding and DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 18 Settlement Fund as well as the fundamental question of whether a respondent had defaulted would likely engender further litigation. Contrary to the majority, the judge’s reliance on these considerations does not justify reversal here, particularly under the abuse of discretion standard. 1. As explained, an informal settlement does not incorpo- rate a Board order, ultimately enforceable through con- tempt proceedings in the federal courts of appeals. Here, the judge correctly pointed to the Board’s rules, which expressly state that “[a]fter the issuance of a complaint, the Agency favors a formal settlement.”38 The Board has acted in accordance with this stated preference, endors- ing a judge’s decision to reject an informal settlement.39 The majority does not and cannot deny that the Board fa- vors formal settlements in cases like this one, where a complaint has been issued—much less a case that was nearly litigated to completion before the administrative law judge. Rather, the majority says that the Board’s rules “contemplate the possibility of approving informal settlement agreements after a hearing has begun.” But the cited rule refers to an “all-party informal settlement,” and here, of course, the Charging Parties objected: the in- formal settlements did not include them.40 In any case, that the Board might permit informal settlements in these circumstances does not mean that it favors them – in ex- plicit contrast to formal settlements. There is no basis for faulting Judge Esposito in this respect. 2. Nor was the judge wrong to give weight to the fact that the settlements require the General Counsel to withdraw the consolidated complaints before compliance with the settlements has been effectuated. Specifically, as the judge accurately stated, under the settlements, the “General Counsel must “move for an order approving withdrawal of the Consolidated Complaints ‘no later than ten days’ after approval.” Under the Board’s standard practice, when a settlement is reached after the opening of the hearing, the General Counsel should move for an indefinite adjournment and independent of the arguments my colleagues make in rejecting the asser- tion that there was no meeting of the minds here, the judge’s observations highlight at the very least the uncertainty inherent in what the settlement agreements demand from whom, and what constitutes satisfaction of those obligations. 38 Board’s Rules and Regulations, Sec. 109(b)(1) (emphasis added). 39 See, e.g., Hunter Outdoor Products, 176 NLRB 449, 463-464 (1969). 40 Sec. 109(d)(1) of the Board’s Rules and Regulations provides: If the settlement occurs after the opening of the hearing and before is- suance of the administrative law judge’s decision and there is an all- party informal settlement, the request for withdrawal of the complaint should withdraw the complaint only “[a]fter compliance has been effected.”41 As the judge noted, the General Counsel offered no explanation here for deviating from standard practice. At this stage, it is impossible to know whether McDonald’s or the Franchisees have complied with the terms of the settlements, particularly as the obli- gations are ongoing after settlement approval. This is es- pecially concerning given that the separate settlement agreements will involve compliance across six Regions and will be enforced “in five different venues throughout the country.” In the event of noncompliance, the General Counsel will have to refile a new complaint, starting the litigation anew. This is a waste of Agency resources, par- ticularly given the length of time, the hours of staff work, and the enormous expense of the litigation to date. Espe- cially given the complexity of determining precise com- pliance under the settlement agreements, the judge did not abuse her discretion to find the withdrawal of the com- plaint weighed against approval of the settlements. The majority argues that failure to withdraw the consol- idated complaint would “tether the Franchisees together throughout compliance” so that “a breach of one settle- ment agreement would therefore be a default on all of the allegations in the complaints with which it was consoli- dated.” This is incorrect. If one Franchisee breaches its settlement agreement, the remaining non-breaching Fran- chisees need not automatically also be found in default. Nor would a breach of one provision amount to a breach on all provisions of each of the consolidated complaints. The majority further asserts that different Regions can police each settlement individually and that the default judgment provisions will ensure the Respondents do not engage in unlawful activity. However, following well-es- tablished Board practice would be a preferable way to help ensure consistent evaluation of the Respondents fulfill- ment of their obligations across Regions while also providing a constant reminder to the Respondents of those obligations—and of the fact that the Board is ready to take swift action in the event of noncompliance. In endorsing this aspect of the settlement agreements, the majority simply assumes that there will be compliance and cedes must be submitted to the administrative law judge for approval. If the all-party settlement is a formal one, final approval must come from the Board. If any party will not join in the settlement agreed to by the other parties, the administrative law judge will give such party an opportunity to state on the record or in writing its reasons for opposing the settle- ment. 41 NLRB Casehandling Manual (Part 1), Unfair Labor Practice Pro- ceedings, Sec. 10154.4. MCDONALD’S USA, LLC 19 all leverage over the Respondents during the compliance period. The time and expense in restarting litigation in the event of noncompliance may well result in long delays be- fore McDonald’s and the violating Franchisee can be called to account, if they are held accountable at all. In light of these legitimate concerns, the judge did not abuse her discretion in finding this aspect of the settlements weighs against approval.42 3. The judge also properly pointed to the fact that the set- tlements omit the Board’s standard remedial language binding a respondent’s “officers, agents, successors, and assigns.” Although the absence of such language does not preclude finding that a settlement is reasonable, the judge properly noted that it was significant in the context of this case, where four of the ten Franchisee Respondents or Charged Party locations in New York City have changed ownership and one has ceased operations entirely. As she found, these facts mean that the Franchisee Respondents are not the sort of stable entities for whom standard suc- cessors-and-assigns language would be unnecessary. The majority brushes aside this argument with the claim that these concerns are “ameliorated by the General Coun- sel’s assurances that the Franchisees have already com- plied with most of their obligations under the settlement agreements, including their monetary obligations. This claim minimizes the obligations in the event of a subse- quent identical Section 8(a)(3) violation within nine months of the settlement’s approval. If a current Franchi- see commits such a violation, it would seem to trigger pay- ment from the Settlement Fund (in certain limited cases). But if the Franchisee no longer exists and its successor or assign commits such a violation, it is unclear whether the successor’s actions would be a breach and trigger dis- bursement of funds to the employee if the successor is not expressly bound by the settlement agreement.43 The judge’s conclusion that the absence of successors-and-as- signs language weighs against approval was therefore not an abuse of discretion. 42 The majority asserts that any concerns over the settlement’s reme- dies are unfounded because the Franchisees are not recidivists predis- posed to violate the Act and they have satisfied their obligations by send- ing backpay to the Regions to be placed in escrow. This ignores at least two problematic aspects of those remedies. First, the amount of time and Agency resources expended in requiring the General Counsel to bring a new merits complaint for a subsequent violation outweighs the major- ity’s assumption that there will be no such violation. Given the breadth of the instant violations in various areas and among multiple Franchisees, this assumption is uncertain at best. Second, because the settlement im- poses no financial or other obligations on McDonald’s, the remedies ef- fectively allow McDonald’s to escape any remedial consequences for the actions at issue in this case. 4. The judge also found that the settlement agreements are unlikely to conclusively resolve these cases. In so doing, she appropriately relied on both her close knowledge of the parties and their contentious behavior as observed over nearly three years, as well as the form of the settlement agreement itself. The most basic possibility lies in a con- tested allegation of breach, which would result in another hearing, exceptions, and appeal. Moreover, the form and terms of the settlement agreements with respect to McDonald’s are sufficiently complex that confusion and conflict is likely. The judge properly noted that the rela- tionship between the default and settlement fund provi- sions and the steps in the Notification of Compliance sec- tion is particularly unclear, with the impact of notification on the default process left unarticulated. The judge cor- rectly noted too that the parties made conflicting represen- tations regarding McDonald’s obligations and the work- ings of the Settlement Fund. The majority asserts that informal settlements have a low default rate generally and there is no indication that any party acted in bad faith. This view glosses over certain critical facts. First, this is not an ordinary informal settle- ment; rather, it is the abrupt end to years-long contentious litigation on a complex issue. The settlement does not re- solve the core allegation of the General Counsel’s case as it was originally brought: McDonald’s joint-employer sta- tus. With that question unanswered, it is likely that similar issues will arise in the future. Second, the majority seems to ignore the fact that the Charging Parties have in large part not agreed to the settlement at all. Third, as the judge noted, the “General Counsel appears to have significantly misunderstood the scope of McDonald’s responsibilities under the default provisions.” This suggests that there may well be subsequent charges from employees pressing the General Counsel to act if McDonald’s falls short of ful- filling those responsibilities, and litigation over whether or not the Respondents here are in fact in default. . . . 43 For this reason, the majority improperly dismisses my concerns about the enforcement of the settlements’ remedies. Even assuming, as the majority claims, that the parties have met most of their obligations (such as providing backpay to be held in escrow by the Region) and that Franchisees are not recidivists, the absence of a successors-and-assigns clause seriously endangers the enforcement of the settlements’ remedies. If a Franchisee goes out of business (as more than one has done) and a successor violates the settlement terms, there is no guarantee that the set- tlement would provide relief for a discriminatee, even if the violation is within the nine months covered by the settlement’s terms. The recidivism or lack thereof on the part of the Franchisees does not mitigate the reme- dial problems the settlement poses. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 20 In sum, the majority has failed to demonstrate that Judge Esposito abused her discretion in giving weight to defects in the form of the proposed settlements. IV. This case, as the majority properly acknowledges, pre- sents “novel and complex issues” concerning joint-em- ployer status. In the majority’s apt words, it has involved the administrative law judge’s “Herculean efforts to struc- ture the litigation, a myriad of procedural rulings, a highly contentious motions practice before the judge and the Board, and over 150 hearing days over almost three years.” Judge Esposito—who has ably handled the case and who is in a far better position than we are to assess it at this point—reasonably exercised her discretion to reject settlements that fail to resolve the joint-employer status of McDonald’s, and instead serve to advance the policy view of the current General Counsel, who has attacked the Board’s current joint-employer standard at every oppor- tunity as he litigated this case brought by his predecessor. Now, applying the wrong standard of review, the majority arbitrarily reverses the judge. But today’s ruling, prema- turely ending the litigation, will almost certainly not be the last word. Because the Board should have deferred to the judge’s decision and permitted the case to proceed, I dis- sent. Dated, Washington, D.C. December 12, 2019 ______________________________________ Lauren McFerran, Member NATIONAL LABOR RELATIONS BOARD APPENDIX ORDER DENYING MOTIONS TO APPROVE SETTLEMENT AGREEEMENTS I. STATEMENT OF THE CASE LAUREN ESPOSITO, Administrative Law Judge. After over 150 days of hearing, only a few days before the record would have closed, General Counsel and Respondents presented a series of Settlement Agreements purporting to resolve all of the cases in the above matter. These “informal” Settlement Agreements, re- ferred to as such because they do not provide for the issuance of an enforceable Board remedial order, were proffered for my 1 On March 19, 2018, General Counsel and McDonald’s stated that they had reached a settlement and provided a series of proposed Settle- ment Agreements for my approval. The parties made presentations on the record regarding approval of the proposed Settlement Agreements on April 5, 2018, and submitted Post-Hearing Briefs on the issue on April 27, 2018 and Reply Briefs on May 4, 2018. approval over the strenuous objections of Charging Parties.1 The Board has a long history of encouraging settlements in order to promote the expeditious resolution of disputes and en- hance productive labor relations. Independent Stave Co., 287 NLRB 740, 741 (1987). The Board has periodically “reiterated its commitment to private negotiated settlement agreements” and its policy of encouraging dispute resolution without resort to the hearing process. Id. The Supreme Court and United States Dis- trict Courts have similarly remarked that settlement is in many instances preferable to litigation. See, e.g., Air Line Pilots Assn. v. O’Neil, 499 U.S. 65, 81 (1991) (“In labor disputes, as in other kinds of litigation, even a bad settlement may be more advanta- geous in the long run that a good lawsuit”); Weiss v. Mercedes- Benz of North America, Inc., 899 F.Supp. 1297, 1301 (D.N.J. 1995) (“a bad settlement is almost always better than a good trial”), quoting In re Warner Communications Securities Litiga- tion, 618 F.Supp. 735, 740 (S.D.N.Y. 1985), aff’d, 798 F.2d 35 (2d Cir. 1986). However, certain fundamental elements of any effective set- tlement are lacking in this case. It is axiomatic that a settlement requires a meeting of the minds, or a genuine agreement between the parties. As discussed in detail below, General Counsel and McDonald’s have made so many conflicting statements regard- ing McDonald’s obligations under the proposed settlements that there is significant doubt as to whether they have actually reached agreement. A meaningful settlement also requires final- ity, or a measure of certainty that the settlement will conclusively end the litigation. Here, the proposed informal settlements’ un- usual and complicated form and enforcement mechanisms, cou- pled with the parties’ evident confusion and history of antago- nism, virtually guarantee that the settlements will not definitively end the case. Board caselaw also requires that a settlement be “reasonable” given the nature of the allegations, the inherent risks of litigation, and the stage of the litigation. Here, the pro- posed informal settlements are not a reasonable resolution based on the nature and scope of the violations alleged and the settle- ments’ limited remedial impact, despite the risks inherent in fur- ther litigation. General Counsel’s proferred justifications for the proposed informal settlements’ significant shortcomings are in- adequate and inconsistent with Board policy and practice. As a result, the Motions to approve the Settlement Agreements in this case are denied. II. PROCEDURAL HISTORY This immense case involved a lengthy hearing characterized by ceaseless evidentiary and procedural objections and florid motion practice. Because the legal standard for the approval of settlements in this context requires an evaluation of the risks in- herent in litigation and the stage of the litigation involved, I will describe the procedural history of the case in some detail.2 A thorough depiction of the history of the case will also help to elucidate my evaluation of certain procedural mechanisms 2 In addition to the events described herein, Respondents regularly filed motions requesting reconsideration, revision or simply withdrawal of orders I issued in response to the parties’ motions or to issues arising in the course of the hearing. Such motions and the ensuing orders have been omitted unless significant. MCDONALD’S USA, LLC 21 contained in the Settlement Agreements now at issue. During 2012, 2013, and 2014, the Charging Parties in the above matter filed charges against McDonald’s USA, LLC (McDonald’s) and various of its franchisees located in New York, Philadelphia, Chicago, Indianapolis, Sacramento, and Los Angeles, alleging that McDonald’s and its franchisees, as joint employers, violated Sections 8(a)(1) and (3) of the Act. On De- cember 19, 2014, Consolidated Complaints and Notices of Hear- ing issued against McDonald’s and franchisees located in New York City,3 against McDonald’s and franchisee Jo-Dan Madalisse, Ltd., LLC (Jo-Dan) located in Philadelphia, Pennsyl- vania, against McDonald’s and franchisees located in Chicago, Illinois,4 against McDonald’s and franchisee MaZT, Inc. located in Sacramento, California, against McDonald’s and franchisee Faith Corp. located in Indianapolis, Indiana, and against McDon- ald’s and franchisees located in Los Angeles, California.5 On January 5, 2015, the General Counsel transferred the Philadel- phia, Chicago, Sacramento, Indianapolis, and Los Angeles cases to Region 2, and on January 6, 2015, the Regional Director, Re- gion 2 issued an Order Consolidating Cases, consolidating them with the cases arising in Region 2 for a hearing before an Ad- ministrative Law Judge.6 McDonald’s and the Respondent Fran- chisees filed Answers denying the Consolidated Complaint’s material allegations.7 The record in this case opened on March 30, 2015. The first year of the proceedings consisted of litigation regarding the pro- duction of documents and electronically stored information (ESI), and the hearing facility arrangements, including parties’ participation by videoconference and a website established by General Counsel to enable the exchange of exhibits. Opening statements took place on March 10, 2016, and witness testimony began on March 14, 2016. A. Initial Motions As discussed above, the separate Consolidated Complaints in this matter issued on December 19, 2014, and those cases were ultimately consolidated for trial before me on January 5, 2015. On December 29, 2014, McDonald’s filed a Motion for a Bill of Particulars, which I denied in an Order dated January 22, 2015. McDonald’s filed a Request and a Supplemental Request for Special Permission to Appeal my January 22, 2015 Order, which 3 This Consolidated Complaint issued against the following fran- chisees: AJD, Inc., Lewis Foods of 42nd Street, LLC, 18884 Food Corp., 14 East 47th Street, LLC, John C Food Corp., 840 Atlantic Avenue, LLC, 1531 Fulton Street, LLC, McConner Street Holding, LLC, MIC- Eastchester, LLC, and Bruce C. Limited Partnership. These franchisees will be collectively referred to as the “New York Franchisees.” 4 This Consolidated Complaint issued against the following fran- chisees: Karavites Restaurants 11102, LLC, Karavites Restaurants 26, Inc., RMC Loop Enterprises, LLC, Wright Management, Inc., V. Oviedo, Inc., McDonald’s Restaurants of Illinois, Inc., Lofton & Lofton Management V, Inc., K. Mark Enterprises, LLC, Nornat, Inc., Karavites Restaurants 5895, Inc., Taylor & Malone Management, RMC Enter- prises, LLC, Karavites Restaurant 6676, LLC, and Topaz Management, Inc. These franchisees will be collectively referred to as the “Chicago Franchisees.” 5 This Consolidated Complaint issued against the following fran- chisees: D. Bailey Management Company, 2Mangas, Inc. and Sanders- Clark & Co., Inc. These franchisees, together with MaZT, Inc., will be the Board denied. McDonald’s USA, LLC, 362 NLRB No. 168 (August 14, 2015). McDonald’s initially refused to acquiesce in the Agency’s typical practice of conducting conference calls among the parties prior to the opening of the hearing, unless these conference calls were transcribed by a court reporter. On February 9, 2015, I is- sued an Order denying McDonald’s request to have an initial conference call in the case transcribed. In that Order, I explained that the NLRB Rules and Regulations did not provide for the transcription of conference calls, and noted that during confer- ence calls parties “typically discuss issues involving settlement, proposed stipulations, the production of subpoenaed materials, scheduling of the hearing, and possibilities for the presentation of evidence” in a manner which would be inhibited if an official record of the call were made. B. The Case Management Order, Stipulation Regarding Sever- ance, and the Deferred Objections Process In late January and early February 2015, McDonald’s and all of the Franchisee Respondents filed Motions to Sever the con- solidated case, contending that each individual Franchisee Re- spondent should be the subject of a separate proceeding. Re- spondents also contended that the presentation of one case in- volving parties in different areas of the country was practically infeasible. The Motions to Sever were denied in an Order dated February 20, 2015, in that consolidation of the cases did not con- stitute an arbitrary abuse of discretion by General Counsel. Re- spondents filed requests for special permission to appeal, which were denied by the Board on their merits. McDonald’s USA, LLC, 363 NLRB No. 91 (January 8, 2016). On March 3, 2015, I issued a Case Management Order estab- lishing parameters for the presentation of the parties’ cases. Re- spondents filed requests for special permission to appeal various aspects of the Case Management Order, which were denied by the Board on their merits. McDonald’s USA, 363 NLRB No. 92 (January 8, 2016) and 364 NLRB No. 14 (May 26, 2016). As indicated above, the hearing in this matter opened on March 30, 2015, with some parties appearing by videoconfer- ence from remote locations. General Counsel, McDonald’s, the New York Franchisees, Jo-Dan, and Charging Parties appeared before me in New York. Tr. 10-11. General Counsel also collectively referred to as the “California Franchisees.” On February 13, 2015, another Consolidated Complaint issued against Sanders-Clark & Co., Inc. which was consolidated with the instant case on March 23, 2015. McDonald’s and Sanders-Clark & Co., Inc. objected on the record and filed Oppositions on April 2 and 3, 2015, which were denied by Or- der dated April 15, 2015. 6 During the hearing the Consolidated Complaint was amended by General Counsel to alter and withdraw allegations regarding violations, pursuant to a motion that I granted. Tr. 14312-14314. On May 23, 2017, General Counsel made a motion to amend the Consolidated Complaint to include an allegation that Jo-Dan Enterprises and Jo-Dan Madalisse, Ltd., LLC, constituted a single employer. Tr. 17190-17191. This motion was granted on June 15, 2017. Tr. 18375-18378. 7 During the hearing, Lewis Foods of 42nd Street, LLC, amended its Answer to admit that at all material times, Mark Grey was an assistant manager for Lewis Foods of 42nd Street, LLC, a supervisor and agent pursuant to Sections 2(11) and (13) of the Act, respectively. Tr. 18514- 18515. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 22 appeared by video conference from Philadelphia, Chicago, Los Angeles, Sacramento, San Francisco, and Indianapolis as did Charging Parties and the Chicago Franchisees, the California Franchisees, and Faith Corp. Tr. 11-14. The initial 11 days of hearing, which took place over a year from March 30, 2015 through March 8, 2016, consisted of conferences regarding the hearing facilities and ongoing practical modifications made by General Counsel to address Respondents’ complaints. During these hearing dates the parties also addressed their Subpoenas Duces Tecum, Petitions to Revoke, and production of documents and ESI, which are discussed in further detail below. Their Motion to Sever the case having been denied, during this same period McDonald’s and the Franchisee Respondents at- tempted to demonstrate that the videoconference system and Sharepoint website established by General Counsel for the dis- semination of exhibits was not adequate for the presentation of the case. Respondents’ counsel raised repeated complaints dur- ing the initial 11 days of hearing regarding the videoconferenc- ing, the Sharepoint website, wifi service in the hearing room, the counsel tables available, and the absence of a lectern. See Order Denying Respondents’ Motion for Reconsideration of Denial of Motion to Sever (March 3, 2016). Given the repeated motions filed by Respondents regarding these topics,8 during the hearing on July 14, 2015 I ordered the parties to meet and confer prior to filing any additional motions regarding the hearing facilities and process. Tr. 477. I further asked that the parties cooperate in a good-faith manner to address such practical issues, instead of creating or amplifying problems with the mechanics of the case presentation in order to support claims that the case could not be tried in accordance with fundamental due-process standards.9 Tr. 472-474. Another spate of filings occurred in late November and early December 2015, after the parties were unable to resolve their dif- ferences regarding these logistical matters amongst themselves. On November 25, 2015, MaZT, Inc. filed a Motion for an Order Addressing the Use and Administration of Sharepoint and Other Aspects of the Hearing Facilities, and a Motion for Modification of the Case Management Order with respect to advance notice of witness appearances and the presentation of evidence. MaZT, Inc.’s motions, which were joined by McDonald’s and a number of the Franchisee Respondents, were denied on December 3, 2015. Instead, the parties agreed to conduct a test of the vide- oconferencing equipment on January 5, 2016, and I adjourned the hearing indefinitely, directing General Counsel to obtain a larger hearing room and address remaining issues with the vide- oconferencing and wireless internet access. See Order Schedul- ing Resumption of Hearing (January 27, 2016). During a status conference on January 8, 2016, I ordered additional safeguards in connection with the use of the videoconferencing equipment 8 Motions were filed regarding the use of the Sharepoint website to exchange documents, the use of videoconferencing, and notice provided regarding topics addressed during the hearing by McDonald’s (July 2, 2015), by MaZT, Inc. (July 6, 2015), by the New York Franchisees (July 10, 2015), and by certain of the Chicago Franchisees and Faith Corp. (July 13, 2015). 9 Specifically, I referred to “a cacophony of complaints about the hearing process here…about opposing counsel,” and to “issues that are normally resolved with just a phone call and a conversation that instead and hearing facilities. A final test of the enhanced videoconfer- encing and wifi equipment in the new, larger hearing room was conducted on February 10, 2016, with a second scheduled for February 29, 2016. However, on February 25, 2016 McDonald’s filed a Motion to Modify the Case Management Order Because of Technological Difficulties, continuing to contend that the vid- eoconferencing, wifi and Sharepoint website were inadequate to enable the full participation of counsel from remote locations. I then issued the Order Denying Respondents’ Motion for Recon- sideration of Denial of Motion to Sever dated March 3, 2016, referred to above. Subsequently, the parties reached a Stipulation As to Modifi- cation of the Case Management Order, which was approved on March 13, 2016, providing for a process by which parties were entitled to file “deferred objections” in lieu of appearing in per- son during any particular phase of the hearing in the case. This Stipulation was designed to obviate the necessity of videocon- ferencing and remote presentation of documentary evidence by permitting parties to forego making appearances during certain portions of the hearing. Instead, parties would be permitted to file objections to testimony and documentary evidence after the hearing date on which the testimony or documentary evidence was presented. During the proceedings on March 8, 2016, Gen- eral Counsel further agreed that pursuant to this Stipulation, par- ties could choose to attend the hearing on a particular day solely to observe, without making an appearance on the record and making their objections during the hearing itself, and then file objections on a deferred basis. Tr. 901-902. On September 1, 2016, McDonald’s filed a Motion proposing to establish “guidelines” regarding the length of the case by lim- iting the number of hours permitted for each party’s case presen- tation. This motion was denied on the record on September 6, 2016.10 Tr. 7624-7629. In early October 2016, General Counsel, the Charging Parties, McDonald’s, and all Franchisee Respondents entered into a Stip- ulation Regarding Proceedings in Severed Cases. This Stipula- tion addressed the manner in which proceedings would continue in the event of an order severing the Region 2 and 4 (New York and Philadelphia) cases from the Region 13, 20, 25, and 31 (Chi- cago, Sacramento, Indianapolis and Los Angeles) cases. General Counsel would be permitted to call in the Region 2 and 4 cases any witness already subject to a Subpoena Ad Testificandum, re- gardless of the specific allegations their testimony would ulti- mately address. The entire record developed in the context of the Region 2 and 4 cases could be made part of the record in the Region 13, 20, 25, and 31 cases. Finally, McDonald’s would have standing objections on relevance grounds to evidence that it wished to contend was not pertinent to any Franchisee Re- spondent in any other case. On October 12, 2016, I issued an end up in motion practice,” expressing my “hope that isn’t a specific strategic choice on the part of the parties.” Tr. 474. 10 As I stated on the record at the time, I was unwilling to impose a numerical limitation on the hours available to the parties for the presen- tation of their cases. Tr. 7624. It was apparent that a set numeric limi- tation would have inevitably become grist for the ever-churning mill of animosity between them, and the trial would simply be prolonged further by conflict over the specific amount of time consumed by the case presentations. MCDONALD’S USA, LLC 23 Order Severing Cases and Approving this Stipulation.11 Meanwhile, the Stipulation As to Modification of the Case Management Order and the “deferred objections” process proved fertile ground for motion practice and due process contentions. On May 17, 2016, the New York Franchisees filed a motion for an Order Confirming the Use of Standing Objections as Deferred Objections, which was granted in an Order issued on May 23, 2016. Disputes subsequently arose regarding the time for sub- mission of deferred objections, and on January 18, 2017 I issued an Order requiring that deferred objections on behalf of all Fran- chisee Respondents be submitted simultaneously after the con- clusion of the Region 2 and 4 cases. The parties were then una- ble to agree upon the format for the deferred objections submis- sion, and on July 13, 2017 I issued an Order on Deferred Objec- tions Submissions addressing that issue. On October 2, 2017, the Chicago Franchisees and Faith Corp. filed a Motion for Re- consideration of these Orders, which was denied by Order dated October 3, 2017. The New York and California Franchisees filed a Motion for Reconsideration of the Orders on October 3, 2017, which was denied by Order dated October 17, 2017. C. Subpoenas and Petitions to Revoke In mid-February 2015, General Counsel served McDonald’s and the Franchisee Respondents with Subpoenas Duces Tecum seeking the production of documents and ESI. McDonald’s and the Franchisee Respondents filed Petitions to Revoke, which were denied by Orders dated March 19, 2015.12 Charging Parties also served Subpoenas Duces Tecum on McDonald’s and the Franchisee Respondents. McDonald’s and the Franchisee Re- spondents filed Petitions to Revoke, which were granted and de- nied in part by Orders dated March 24, 2015. As discussed above, the hearing opened on March 30, 2015, and adjourned until May 26, 2015 to allow for the production of documents and ESI. In late April and early May 2015, I con- ducted several conference calls to discuss the status of the par- ties’ production. On April 27, 2015, I wrote to the parties to schedule a second pre-hearing conference call, and asked that they provide counsel authorized to discuss and possibly reach agreement regarding the production of materials pursuant to Subpoena, particularly ESI. On April 28, 2015, McDonald’s filed an “Emergency Expedited Request for Special Permission to Appeal” what it styled as “Permitting Off-the-Record Motion Practice.” The Board denied this request for special permission to appeal on its merits. Lewis Foods of 42nd Street, LLC, 362 NLRB No. 132 (June 26, 2015); see also Order Denying Request for Reconsideration Regarding Transcription of Conference Call (February 9, 2015). 11 In this Order I retained jurisdiction over the Region 13, 20, 25, and 31 cases, unless another ALJ was subsequently assigned to hear them. 12 General Counsel and Charging Parties also served Subpoenas Du- ces Tecum on McDonald’s Restaurants of Illinois, Inc., which are dis- cussed in further detail at page 26, infra. In mid-December 2015, Gen- eral Counsel served a Subpoena Duces Tecum on Aon Consulting, Inc. (Aon). Aon filed a Petition to Revoke the Subpoena, which was denied by Order dated January 4, 2016. 13 The Charging Parties produced materials responsive to the McDon- ald’s Subpoena Duces Tecum as required by my March 24, 2015 Order in May 2015. McDonald’s and the Franchisee Respondents served the Charging Parties and Kendall Fells with Subpoenas Duces Te- cum, and Charging Parties filed Petitions to Revoke, which were granted and denied in part by Order dated April 9, 2015. McDonald’s filed a request for special permission to appeal my April 9, 2015 Order, which the Board denied on its merits.13 McDonald’s USA, LLC, 363 NLRB No. 144 at p. 1-2, 11-14 (March 17, 2016). McDonald’s also served third parties Mintz Group, LLC, LR Hodges & Associates, Ltd., Berlin Rosen, Ltd., New York Communities for Change, Inc. (NYCC), and Hart Re- search Associates with Subpoenas Duces Tecum. These third parties filed Petitions to Revoke, which were granted on April 9, 2015 and April 15, 2015. McDonald’s filed a request for special permission to appeal these Orders, which the Board also denied on its merits. McDonald’s USA, LLC, 363 NLRB No. 144 at p. 1, 14-19. On April 27, 2015, the parties entered into a Stipulated Pro- tective Order in this matter.14 However, in the face of ongoing disputes regarding the production of documents and ESI pursu- ant to the Subpoenas Duces Tecum, on May 19, 2015 I issued an Order scheduling a series of conferences in June, July, and Au- gust 2015 to address these matters. I further ordered that opening statements and the presentation of evidence would begin on Oc- tober 5, 2015. At the first of these conferences on June 2, 2015, General Counsel and Charging Parties objected to McDonald’s unilateral redaction of documents it had produced pursuant to Subpoena. Tr. 163-168. After the parties submitted their posi- tions with respect to the redactions, I issued an Order on June 15, 2015 requiring that McDonald’s produce unredacted copies of all previously produced documents and cease redacting docu- ments for any reasons other than established privileges or settled Board principles. Overall, the conferences to address the production of docu- ments and ESI during the summer of 2015 were not productive. McDonald’s took the position that it did not intend to comply with my June 15, 2015 order requiring that it produce unredacted documents, would not comply with any order I issued regarding the scope of ESI custodians, and would basically produce only the materials that it considered to be appropriate. Tr. 316-317, 346-347. McDonald’s and the Franchisee Respondents also re- peatedly refused to comply with specific portions of my order denying their Petitions to Revoke, and refused to agree to any definite time for completing their production of documents and ESI. See, e.g., Tr. 301, 375-380, 417-418, 486-487, 494-495, 497-498, 500-501, 506, 508-509, 510-512. Thus, on August 24, 2015, General Counsel filed a Motion to Adjourn the Hearing Date pending proceedings to enforce its Subpoenas Duces 14 On January 8, 2016, General Counsel filed a Motion for an Order compelling McDonald’s to comply with the terms of the Stipulated Pro- tective Order, arguing that McDonald’s had over-designated documents as Confidential or Highly Confidential pursuant to the Protective Order’s terms. I granted General Counsel’s motion and admonished McDonald’s against further violations of the Stipulated Protective Order’s terms in an Order dated February 11, 2016. On February 2, 2016, the New York Franchisees filed a Motion for Modification of the Stipulated Protective Order, which was denied by Order dated February 11, 2016. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 24 Tecum in federal court, and the New York Franchisees filed a Motion to Confirm the Trial Start Date or Adjourn the Trial. By Order dated August 28, 2015, the hearing was adjourned until January 11, 2016. General Counsel subsequently filed applications for enforce- ment of its Subpoenas Duces Tecum against McDonald’s, the New York Franchisees, Jo-Dan, and the Franchisee Respondents in Chicago, Indianapolis, and California. Respondents were or- dered to produce the vast majority of the information sought. See NLRB v. McDonald’s USA, 15 Misc. 322 (CM) (S.D.N.Y.); NLRB v. AJD, Inc., et al., 2015 WL 7018351 (S.D.N.Y. 2015) (granting applications to enforce subpoenas served on the New York Franchisees); NLRB v. Jo-Dan Madalisse, Ltd, LLC, 2015 WL 9302922 (E.D. Pa. 2015) (granting application to enforce subpoena served on Jo-Dan); NLRB v. K Mark Enterprises, LLC, et al., 2016 WL 233096 (N.D. Illinois 2016) (granting applica- tions to enforce subpoenas served on Chicago Franchisees); NLRB v. Nornat, Inc., 2016 WL 233098 (N.D. Ill. 2016) (same); NLRB v. MaZT, Inc., 15-MC-00110-WBS-CKD (E.D. Ca.); NLRB v. Faith Corp. of Indianapolis, 15-MC-00092 (JMS-MJD) (S.D. Indiana); NLRB v. Sanders-Clark & Co., Inc., 2016 WL 2968014 at *1 (C.D. Ca. 2016) (noting that the court had granted an application to enforce the subpoena served on Respondent Franchisee Sanders-Clark & Co., Inc.) and 16-55692 (9th Cir- cuit); NLRB v. 2Mangas, Inc., 25-MC-249 and 16-CV-02155 (CAS) (C.D. Ca.) and 16-55690 (9th Circuit); NLRB v. D. Bailey Management Co., 15-MC-250, 16-CV-02156 (C.D. Ca.) and 16- 55689 (9th Circuit). Once General Counsel obtained orders enforcing their Sub- poenas Duces Tecum, Respondents raised a multitude of privi- lege assertions engendering extensive litigation. In December 2015 and January 2016, General Counsel filed motions for or- ders finding a waiver of privilege by McDonald’s and requiring the immediate production of documents McDonald’s had with- held on that basis. These motions were held in abeyance pending the parties’ discussions. However, on January 20, 2016, General Counsel filed a motion for an order finding that Franchisee Re- spondents 2Mangas, Inc., D. Bailey, Inc., and Sanders-Clark & Co. had waived any claim of privilege by failing to submit their privilege log in a timely manner. This motion was granted in an Order dated February 22, 2016.15 General Counsel also filed motions for orders finding waivers of privilege and requiring production of documents against the New York Franchisees (February 18, 2016), the Chicago Franchisees (March 2, 2016), and MaZT, Inc. (March 25, 2016). On April 13, 2016, I issued an Order Requesting Appointment 15 See NLRB v. Sanders-Clark & Co., Inc., 2016 WL 2968014 at *3- 6. After finding that under Ninth Circuit law ALJs were not empowered to rule on waiver of privilege claims, Judge Snyder determined that Sanders-Clark & Co., Inc. had waived assertions of attorney-client priv- ilege. Judge Snyder reached the same conclusion with respect to 2Man- gas, Inc. and D. Bailey Management Co. in cases 16-CV-02155 and 16- CV-02156, respectively. 16 On August 8, 2016, McDonald’s filed a Motion seeking a confiden- tiality order, beyond the parameters of the Stipulated Protective Order approved on April 27, 2015, applicable to some of the documents it was required to produce pursuant to Judge Wedekind’s June 28, 2016 Order. I denied McDonald’s Motion by Order dated August 24, 2016. of a Special Master to address contested privilege assertions and the adequacy of Respondents’ privilege logs. On April 15, 2016, Robert A. Giannasi, Chief Administrative Law Judge, appointed Judge Jeffrey D. Wedekind to act as Special Master in connec- tion with these issues. Judge Wedekind, as Special Master, sub- sequently issued Orders addressing General Counsel’s conten- tions regarding the adequacy of Respondents’ privilege logs and waiver of privilege by the New York Franchisees (June 1, 2016, addressing 467 disputed entries), McDonald’s (June 28, 2016,16 addressing 101 disputed entries, and September 16, 2016, ad- dressing eight disputed entries), Jo-Dan (September 29, 2016, addressing one disputed entry), the Chicago Franchisees (Octo- ber 26, 2016, addressing 43 disputed entries), Faith Corp. (Octo- ber 27, 2016, addressing three disputed entries), and MaZT, Inc. (November 1, 2016, addressing two disputed entries). In mid-August 2017, McDonald’s served Charging Parties SEIU, Fast Food Workers Committee (FFWC), and Pennsylva- nia Workers Organizing Committee (PWOC) with a second round of Subpoenas Duces Tecum. McDonald’s also served ad- ditional Subpoenas Duces Tecum on Kendall Fells and NYCC. These Charging Parties and non-parties filed Petitions to Revoke the Subpoenas Duces Tecum, which were granted in an Order dated October 2, 2017. On October 9, 2017, McDonald’s filed a request for special permission to appeal my October 2, 2017 Or- der, which the Board denied in its January 16, 2018 Order dis- cussed in further detail below. D. Presentation of the Case and Related Motions The parties gave their opening statements on March 10, 2016, and General Counsel began presenting witnesses on March 14, 2016. General Counsel called 52 current and former McDon- ald’s employees to testify regarding various aspects of the rela- tionship between McDonald’s and its franchisees, including the Franchisee Respondents, over 78 days, concluding on January 26, 2017. General Counsel then called 34 witnesses in connec- tion with the New York and Philadelphia unfair labor practice allegations, who testified over 24 days, concluding on May 23, 2017.17 On October 25, 2016, the New York Franchisees had filed a Motion arguing in relevant part that General Counsel should be required to present all witnesses whose testimony per- tained to a particular Franchisee Respondent location prior to presenting any witness whose testimony pertained to a different Franchisee Respondent location. General Counsel filed an Op- position, and I denied this Motion on the record on November 10, 2016. The severance of the cases and deferred objections process obviated the need for structuring the case presentations 17 General Counsel called owners and managers of the New York Franchisees pursuant to FRE 611(c) during his direct case. McDonald’s initially took the position that these witnesses were adverse, such that McDonald’s was permitted to ask such witnesses leading questions, de- spite the participation of McDonald’s attorneys in their preparation to testify. Tr. 13566-13574, 13583-13584. I rejected this contention for the reasons stated in a ruling on the record on February 2, 2017. Tr. 13875-13882. In particular, McDonald’s attorneys participated in pre- paring many of the witnesses presented by the New York Franchisees and Jo-Dan on their direct cases to testify. See, e.g., Tr. 18088-18089, 18212-18213, 18358-18359, 18818-18819, 18919-18920, 19219-19220, 19900-19901, 20153-20154. MCDONALD’S USA, LLC 25 in such a manner, and calling whatever witnesses were available to testify regardless of the location which their testimony would address was a more efficient use of the available hearing time. Tr. 10934-10941, 13375-13377. On January 31, 2017, the parties agreed to the entry of a se- questration order, and I issued a sequestration order pursuant to Greyhound Lines, 319 NLRB 554 (1995). Tr. 13629-13632; see also NLRB Judges Bench Book § 1-300. An initial dispute be- tween the parties regarding the number of New York Franchisee representatives entitled to be present during testimony dissipated on the submission of written statements. Tr. 13628-13633, 13674-13676. Subsequently on February 16, 2017 I issued an Order permitting the New York Franchisees to have one non- sequestered representative per Charged Party franchise entity present throughout the hearing. On May 25, 2017, the New York Franchisees began present- ing their direct case. The New York Franchisees presented 35 witnesses over 22 days, concluding on October 26, 2017. Jo- Dan presented one witness, concluding on October 24, 2017.18 From the moment the first witness took the stand in this case on March 14, 2016, the evidentiary issues raised by McDonald’s and the Franchisee Respondents have simply been extraordinary. Of course, pursuant to Section 10(b) of the Act, agency proceed- ings “shall, so far as practicable, be conducted in accordance with the rules of evidence applicable in the district courts of the United States.” See also, NLRB Rules and Regulations, § 102.39. Thus, “It is well-established that the Board is not bound to apply strictly the Federal Rules of Evidence.” Times Union, Capital Newspapers, 356 NLRB 1339, n. 1 (2011); Conley Trucking, 349 NLRB 308, 310 (2007), enf’d. 520 F.3d 629 (6th Cir. 2008). For example, ALJs are not precluded from admitting hearsay and according it the weight they believe to be appropri- ate based upon other record evidence. Conley Trucking, 349 NLRB at 310-312, discussing Alvin J. Bart, 236 NLRB 242 (1978) (admissibility of witness affidavit); see also St. George Warehouse, 353 NLRB 497, 503 (2008), adopted at 355 NLRB 474 (2010), enf’d. 645 F.3d 666 (3d Cir. 2011) (admissibility of hearsay testimony). Unfortunately, as I stated on the record, McDonald’s took deliberate strategic positions regarding evi- dentiary and procedural issues which obstructed the creation of the record and prolonged the hearing. Tr. 8126-8127. For example, documents offered into evidence by General Counsel were subject to a barrage of evidentiary objections, even though the vast majority of the documents at issue had been pro- duced by the Respondents themselves pursuant to subpoena. McDonald’s began by taking the position that it had no custodian of the records for any documents, at any level, in its corporate headquarters, departments, or Regional offices, even with re- spect to documents as fundamental to its business as executed written agreements with the Franchisee Respondents. See Tr. 1175-1178, 1203-1204, 1497-1500, 1503-1506, 1546-1560, 1681, 1685. McDonald’s also refused to identify any “qualified witness” for the admission of such documents pursuant to Fed- eral Rule of Evidence 803(6). Tr. 1548-1550, 1557-1561, 1685, 3180-3181. As a result, McDonald’s repeatedly contended that 18 I had suggested to the parties earlier that they agree to some proce- dure permitting Jo-Dan to forego attending the hearing during the every individual who actually prepared or received a document was required to personally testify that they recalled having pre- pared or received it for the document’s admission into evidence. See, e.g., Tr. 1203, 1481-1482, 1683-1684, 2138-2139, 3706- 3707. Eventually, Respondents and General Counsel entered into stipulations agreeing to the authenticity of certain of the doc- uments, some of which also addressed hearsay objections. But Respondents continued to meet attempts to introduce documents they had produced pursuant to subpoena with repeated objec- tions that the particular witness was not an “appropriate” witness to “shepherd” the document into the record. See, e.g., Tr. 1409, 1479, 1683-1684, 2062-2063, 3180-3181, 3706-3707, 5494- 5495, 5571, 8340-8354, 12133. No legal authority was ever pre- sented to substantiate this contention. Similarly, McDonald’s and the New York Franchisees refused to stipulate that e-mails they produced pursuant to subpoena, sent to an address admittedly used by a particular witness, were actu- ally received or seen by that individual, and objected to their ad- mission into evidence on this basis. See, e.g., Tr. 15174-15175, 16123-16128, 16137-16140, 16845-16860, et seq. Here McDonald’s at least presented a legal argument that certain e- mails contained in a “chain” could not be authenticated because they could have been altered by the ultimate sender or recipient, which I rejected on the record based on countervailing caselaw. Tr. 16845-16850. McDonald’s then contended that such docu- ments, while “authentic” lacked a “foundation” for admissibility, reverting to its claim that a witness with “personal knowledge” of every document was required. Tr. 16854-16855. Finally, McDonald’s counsel claimed, with no factual elaboration what- soever, that attorney-client privilege precluded disclosure of the date that it discovered a particular document responsive to Gen- eral Counsel’s Subpoena but never previously produced. Tr. 20993, 21000. McDonald’s began presenting its direct case on October 30, 2017, and 15 of its witnesses had testified when the hearing ad- journed on December 13, 2017. At that time 12 additional hear- ing dates had been scheduled beginning on January 22, 2018 and continuing into February. On July 28, 2017, McDonald’s had written to General Counsel, stating that it had retained Professor Chekitan Dev as a possible expert witness regarding “branding, brand protection, and McDonald’s brand, culture and/or fran- chising relationship.” General Counsel requested production of an expert’s report in connection with Professor Dev’s testimony. On August 11, 2017, McDonald’s filed a Motion for an order stating that its notice of potential expert testimony was sufficient, and on August 12, 2017, General Counsel filed a motion to com- pel disclosure of or preclude the expert testimony. On Septem- ber 5, 2017, I issued an Order requiring that McDonald’s provide an expert’s report in connection with Professor Dev’s testimony, in the format prescribed by Federal Rule of Civil Procedure 26(a)(2)(B), thirty days in advance of the anticipated date of Pro- fessor Dev’s testimony. On September 13, 2017, McDonald’s filed a Motion for Reconsideration and/or Clarification of the September 5, 2017 Order raising various issues, which I ad- dressed in a Supplemental Order Regarding Production of presentation of evidence addressing the unfair labor practice allegations against the New York Franchisees, but the parties did not do so. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 26 Expert’s Report issued on October 2, 2017. On October 9, 2017, McDonald’s filed a request for special permission to appeal the September 5, 2017 order requiring the production of an expert’s report, but not the October 2, 2017 Order resolving the ancillary issues it had raised. Before adjourning the hearing in December 2017, McDon- ald’s stated that it had two additional witnesses to call – a fact witness and Professor Dev – after which it would close its direct case. Tr. 201011-201013, 201021. Apparently, the only rebuttal General Counsel intended to present was a position statement submitted by counsel for the New York Franchisees during the investigation of the charges. Tr. 21208-21209. The hearing was scheduled to resume on January 22, 2018. On January 2, 2018, General Counsel filed a Motion seeking an Order precluding McDonald’s from presenting expert testi- mony and admonishing McDonald’s. In an Order dated January 12, 2018, I declined to hold the record in the case open for the testimony of Professor Dev in the event that the Board had not ruled on McDonald’s October 9, 2017 request for special per- mission to appeal prior to the resumption of the hearing. While declining to admonish McDonald’s, I found that McDonald’s had purposefully delayed the presentation of its direct case in or- der to obtain a “stay” of the hearing pending the Board’s ruling on its request for special permission to appeal, or for some other undisclosed purpose. Specifically, I found that McDonald’s had deliberately prolonged the presentation of its case by refusing to present more than one witness each day even though on nine days its sole witness testified for two hours or less, and by uni- laterally canceling four hearing days which had been scheduled for six months. On January 16, 2018, the Board issued an unpublished Order ruling that McDonald’s was not required to provide an expert’s report with respect to Professor Dev’s testimony. The next day, General Counsel filed a Motion to Stay the hearing, which was scheduled to resume in less than a week, for 60 days, asserting that McDonald’s “initiated discussions regarding a global settle- ment of all pending NLRB charges” in December 2017. General Counsel further stated that the stay was necessary in order to evaluate the impact of the Board’s decision Hy-Brand Industrial Contractors, Ltd., 365 NLRB No. 156 (December 14, 2017), which overruled Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (August 27, 2015). Charging Parties op- posed the Motion. I granted the Motion by Order dated January 19, 2018. The hearing was adjourned until March 19, 2018, with an additional 11 hearing days agreed upon by the parties. On February 26, 2018, the Board vacated its decision in Hy- Brand Industrial Contractors, Ltd., stating that as a result, “the overruling of the Browning-Ferris decision is of no force or ef- fect.” 366 NLRB No. 26. 19 It should be noted that McDonald’s appeared at the March 19, 2018 hearing without a witness and otherwise unprepared to continue its direct case, declaring “we have settled the case,” despite its claim that “we had no idea what was going to happen today,” and the fact that the Settlement Agreements had been neither executed by General Counsel nor approved by me. Tr. 21216, 21219, 21236-21237. 20 Post-Hearing Briefs were filed by General Counsel, Charging Par- ties, McDonald’s, the New York Franchisees, and Jo-Dan. McDonald’s, the New York Franchisees, Jo-Dan, and Charging Parties also filed The hearing resumed on March 19, 2018. At that time, Gen- eral Counsel and McDonald’s presented a series of Settlement Agreements executed by McDonald’s and the Franchisee Re- spondents in both the instant case and the severed cases, purport- edly resolving all of them.19 Charging Parties objected. I then adjourned the hearing until April 5, 2018, when the parties were given the opportunity to present evidence and argument regard- ing whether the Settlement Agreements should be approved pur- suant to Independent Stave Co., 287 NLRB 740 (1987). The In- dependent Stave hearing took place on April 5, 2018, and all par- ties were provided with the opportunity to submit briefs and re- plies addressing that issue.20 III. THE PROPOSED SETTLEMENT AGREEMENTS As indicated above, on March 19, 2018, General Counsel and McDonald’s presented a series of thirty informal Settlement Agreements for my approval, each Settlement Agreement ad- dressing the allegations against one Franchisee Respondent and executed by that Franchisee Respondent and McDonald’s. On April 5, 2018, copies of the Settlement Agreements executed by General Counsel were moved into evidence. McDonald’s con- tends in its Briefs that General Counsel has represented that the proposed Settlement Agreements will serve as a “template” for settlement of other cases involving an allegation that McDon- ald’s constitutes a joint employer with one of its franchisees, which were never consolidated with the cases at issue here. McDonald’s Brief in Support of Motion to Approve at p. 6, 7-8; McDonald’s Post-Hearing Brief at p. 7, n. 9, 9. The Settlement Agreements provide for the posting of a No- tice in English and any additional language the particular Re- gional Director determines to be appropriate, at the Franchisee Respondent’s location. The Settlement Agreements also provide for the mailing of the Notice to the last known address of former employees employed at any time during the six months follow- ing the last date that the Respondent Franchisee allegedly com- mitted the unfair labor practices.21 The Settlement Agreements further provide for the payment of backpay in the form of a certified or cashier’s check to the 20 alleged discriminatees. Three of these employees were allegedly discharged, and the other 17 were allegedly suspended for one day, assigned reduced work hours, and sent home early at vari- ous times in retaliation for their support for and activities on be- half of the Union. The three employees who were allegedly dis- charged unlawfully – Sean Caldwell, Tracee Nash, and Quanisha Dupree – have waived reinstatement, and will receive front pay.22 All 20 of the alleged discriminatees receiving backpay will receive interest and an excess tax award as well. The total amount payable for all alleged discriminatee awards is $171,636.00. Reply Briefs. The Chicago Franchisees, Faith Corp., and the California Franchisees also filed Motions in support of the Settlement Agreements’ approval. 21 The Settlement Agreement with Mic-Eastchester, LLC provides solely for mailing of the Notice to the last known addresses of employees working at 341 Fifth Avenue, New York, New York during the period March 1, 2013 through June 1, 2013. 22 Caldwell, Nash and Dupree have executed written waivers to this effect. G.C. Exs. Waiver 1-3. MCDONALD’S USA, LLC 27 The Settlement Agreements provide that, subject to stipulated confidentiality designations pursuant to the parties’ Protective Order, General Counsel may seek to use evidence obtained dur- ing the investigation and hearing for any relevant purpose in the instant case or any other cases. Such evidence may form the ba- sis for findings of fact and/or conclusions of law. The Settlement Agreements provide that neither the Agreements nor any con- duct taken in order to effectuate them constitute an admission or will be asserted as evidence of joint employer status between McDonald’s and any of its franchisees. The Settlement Agreements also contain processes for ad- dressing breaches occurring within a period of nine months after the Agreements are approved.23 First, the Regional Director in- volved is to notify McDonald’s and the relevant Franchisee Re- spondent of the breach, and the Franchisee Respondent shall have fourteen days to remedy the violation. In the event that the Franchisee Respondent fails to do so, the Regional Director may issue what the Settlement Agreements refer to as a “Merits Com- plaint” against that Franchisee Respondent only, containing all of the allegations pertinent to the Franchisee Respondent in the instant case except for the allegations that McDonald’s is a joint employer with the Franchisee Respondent of the Franchisee Re- spondent’s employees. General Counsel may then file a motion for a default judgment with the Board on the allegations of the Merits Complaint. The Settlement Agreements further provide that in the event of an instance of non-compliance which is not cured by the Fran- chisee Respondent within 14 days after notice provided by the Regional Director, the Regional Director will provide Special Notices containing agreed-upon language to McDonald’s, which McDonald’s will mail to the last known address of the Franchi- see Respondent’s employees.24 A representative Special Notice is attached here to as Appendix A. The Settlement Agreements then provide that if both McDon- ald’s and the Franchisee Respondent fail to cure the breach of the Agreements identified by the Regional Director, the Regional Director may amend the Merits Complaint to include McDon- ald’s as a Respondent and include the allegations pertinent to joint employer status. After the Regional Director makes these amendments, resulting in what the Settlement Agreements term the “Default Complaint,” General Counsel may file a motion for a default judgment with respect to its allegations. The Settlement Agreements provide that in the event of a motion for a default judgment the pertinent Answers will have been withdrawn and the allegations admitted. However, McDonald’s and the Fran- chisee Respondent involved may still raise before the Board the issue of whether one or both of them have defaulted on the Set- tlement Agreements’ terms. The Board may then find the alle- gations of the Merits or Default Complaint true and make appro- priate findings of fact and conclusions of law. The Settlement Agreements further provide that a United States Court of 23 The Settlement Agreements provide that the Notice’s statement “WE WILL NOT do anything to prevent you from exercising the above rights” may not constitute the basis for finding a breach or violation. 24 The Franchisee Respondents agree to provide the employees’ names and last known addresses to McDonald’s for this purpose. 25 For example, Franchisee Respondent Lewis Foods of 42nd Street, LLC is alleged to have assigned more onerous work to an employee in Appeals Judgment may be entered enforcing any such board or- der ex parte after service or an attempt at service on McDonald’s and/or the Franchisee Respondent at the last addresses they have provided to General Counsel. Some of the Settlement Agreements also provide for a Settle- ment Fund of $250,000 contributed by the Franchisee Respond- ents, to be used “for the benefit of any and all potential discrim- inatees who may be entitled to a monetary remedy” as a result of a breach. Only Franchisee Respondents alleged in the Consoli- dated Complaint to have committed violations of Section 8(a)(3) of the Act resulting in backpay liability are subject to the Settle- ment Fund provisions.25 Furthermore, a Settlement Fund dis- bursement is only available if the Franchisee Respondent in question commits a violation identical to the violation(s) of Sec- tion 8(a)(3) initially alleged in the Consolidated Complaint. Tr. 21248-21249. Pursuant to the Settlement Agreements, monies from the Settlement Fund may become available in the following circumstances: (i) a Regional Director provides written notice of a breach of a Settlement Agreement consisting of a Franchisee Respondent’s relevant violation of Section 8(a)(3) within nine months following approval of the Settlement Agreement; and (ii) the Franchisee Respondent fails or refuses to cure the relevant breach of the Settlement Agreement. If McDonald’s notifies the Regional Director that it will issue a Special Notice as described above, the alleged discriminatee in question may choose between two options. The alleged discriminatee may waive reinstatement and receive a payment from the Settlement Fund equal to 500 hours of pay plus backpay running from the date of the violation through the date that the Regional Director provides written no- tice of the breach. The alleged discriminatee may in the alterna- tive elect to receive a payment from the Settlement Fund equal to the pay they would have earned from the date of the violation through the date of the Regional Director’s written notice of the breach.26 If the alleged discriminatee elects to waive reinstate- ment, the payment from the Settlement Fund shall be in lieu of any other remedies, the charges will be dismissed, and General Counsel will take no further action. If the alleged discriminatee chooses not to waive reinstatement, General Counsel may issue a complaint based on the violation alleged, but will not pursue default proceedings against McDonald’s based on the violations. After 15 months, if the Regional Director in question deter- mines that there are no pending charges alleging a breach of the pertinent Settlement Agreements, the remainder of the Settle- ment Fund monies will be returned to McDonald’s. If there are pending charges after fifteen months, the balance of the Settle- ment Fund will be returned after the pending charges are re- solved. Finally, the Settlement Agreements provide that 10 days after approval, General Counsel will move the ALJ for an order ap- proving withdrawal of the Consolidated Complaint against McDonald’s and the Franchisee Respondents, as well as the retaliation for her union activities in violation of Sections 8(a)(1) and (3). G.C. Ex. 1(eee), ¶¶10, 13. However, the Settlement Agreement with that entity does not contain Settlement Fund provisions. 26 Calculations of the amounts payable from the Settlement Fund in both circumstances will be performed by the Regional Director. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 28 withdrawal of any Answers. No further action will be taken by General Counsel on those allegations, contingent on the parties’ compliance with the Settlement Agreements. The parties to each Settlement Agreement will notify the Regional Director in writ- ing regarding the steps McDonald’s and the Franchisee Re- spondent have taken to comply within 5 days and again after 60 days from the date that the Settlement Agreements are approved. IV. THE INDEPENDENT STAVE ANALYSIS For many years, the Board has articulated a policy objective of encouraging the resolution of disputes without litigation in or- der to promote productive and stable collective bargaining rela- tionships and labor relations. See, e.g., UPMC, 365 NLRB No. 153 at p. 3 (2017); Independent Stave Co., 287 NLRB 740, 741 (1987). This policy, however, is not without its limitations, for “the Board’s power to prevent unfair labor practices is exclusive, and…its function is to be performed in the public interest and not in vindication of private rights.” Independent Stave Co., 287 NLRB at 741, quoting Robinson Freight Lines, 117 NLRB 1483, 1485 (1957). As a result, “the Board alone is vested with lawful discretion to determine whether a proceeding, when once insti- tuted, may be abandoned,” a discretion “recognized as broad.” Id; UPMC, 365 NLRB No. 153 at p. 3, quoting Roselle Shoe Corp., 135 NLRB 472, 475 (1962), enf’d. 315 F.2d 41 (D.C. Cir. 1963). In exercising this discretionary function, the Board “will refuse to be bound by any settlement that is at odds with the Act” or with its own policies. Independent Stave Co., 287 NLRB at 741; see also UPMC, 365 NLRB No. 153 at p. 3, quoting Borg- Warner Corp., 121 NLRB 1492, 1495 (1958). Therefore, in order to determine whether to accept a settle- ment agreement in lieu of further proceedings after issuance of a complaint, the Board considers whether “under the circum- stances of the case,” giving effect to “any waiver or settlement of charges” “will effectuate the purposes and policies of the Act.” Independent Stave Co., 287 NLRB at 741, quoting Na- tional Biscuit Co., 83 NLRB 79, 80 (1949). The analysis devel- oped by the Board encompasses issues such as “the risks in- volved in protracted litigation…the early restoration of industrial harmony…and the conservation of the Board’s resources.” In- dependent Stave Co., 287 NLRB at 741. The Board also evalu- ates whether the affected employees have agreed to the proposed settlement, and “whether the agreement was entered into volun- tarily by the parties, without fraud or coercion.” Id. As summa- rized in Independent Stave, “in order to assess whether the pur- poses and policies underlying the Act would be effectuated by” approval of a settlement agreement, the Board evaluates 27 Nothing in the record supports McDonald’s assertion that Charging Parties “boycotted” the negotiation of the Settlement Agreements. McDonald’s Post-Hearing Brief at 8-9, Reply Brief at 3; see Tr. 21201- 21204. 28 See, e.g., Alamo Rent-A-Car, 338 NLRB 275 (2002) (noting that only one of four individual discriminatees approved the proposed settle- ment); Flint Iceland Arenas, 325 NLRB 316, 320 (1998). 29 General Counsel’s argument that an ALJ’s prerogative to approve or reject settlements under Independent Stave is somehow limited by “prosecutorial discretion” contradicts the Board’s position in UPMC de- scribed above and is rejected. Post-Hearing Brief at p. 4. Furthermore, General Counsel’s contention that the Chicago, California, and all the surrounding circumstances including, but not limited to, (1) whether the charging party(ies), the respondent(s), and any of the individual discriminatee(s) have agreed to be bound, and the position taken by the General Counsel regarding the settle- ment; (2) whether the settlement is reasonable in light of the nature of the violations alleged, the risks inherent in litigation, and the stage of the litigation; (3) whether there has been any fraud, coercion, or duress by any of the parties in reaching the settlement; and (4) whether the respondent has engaged in a history of violations of the Act or has breached previous settle- ment agreements resolving unfair labor practice disputes. 287 NLRB at 743. For the following reasons, I find that the first of the Independ- ent Stave factors does not weigh in favor of approval of the pro- posed settlements, and that the second factor militates signifi- cantly against approval. The third and fourth components of the Independent Stave analysis favor approval of the settlements. For the reasons discussed herein, I find overall that approval of the proposed Settlement Agreements is not appropriate. A. The Positions of the Parties The first element of the Independent Stave analysis requires a consideration of whether the parties have agreed to be bound by the proposed settlement, and General Counsel’s position. Here, Respondents and General Counsel have signed the informal Set- tlement Agreements and argue for their approval. However, Charging Parties vehemently oppose approval of the Settlement Agreements.27 Furthermore, although the three alleged discrim- inatees who were discharged executed waivers of reinstatement, there is no evidence regarding the positions of the other 17 al- leged discriminatees receiving backpay.28 I find that pursuant to the Board’s decision in UPMC, the po- sition of the General Counsel is significant but not conclusive with respect to the first component of the Independent Stave analysis. In UPMC, the General Counsel and the Charging Party both opposed the settlement of the single employer allegations advanced by Respondents and ultimately accepted by the ALJ. 365 NLRB No. 153 at p. 7, 23. The Board stated there that while General Counsel’s opposition to the proposed resolution was “an important consideration” weighing against approval, it was “not determinative under Independent Stave.”29 UPMC, 365 NLRB No. 153 at p. 7, quoting McKenzie-Willamette Medical Center, 361 NLRB 54, 55 (2014); see also Independent Stave Co. 287 NLRB at 741 (the Board “is not required…to give effect to all settlements reached by the parties to a dispute with or without Indianapolis cases are within his “final authority” to resolve because the hearing with respect to those allegations has not yet begun is meritless. Post-Hearing Brief at 4-6. General Counsel has already presented ap- proximately 15 witnesses pertaining to the Chicago Franchisees, eight witnesses pertaining to the California Franchisees, two witnesses per- taining to Faith Corp., and ten witnesses from various departments within McDonald’s USA whose testimony General Counsel will presumably contend is relevant to McDonald’s relationship with all of the Franchisee Respondents. As discussed infra, this testimony includes material rele- vant to the unfair labor practice allegations against the Chicago and Cal- ifornia Franchisees and Faith Corp., as well as joint employer status. See materials cited at footnotes 45-46, 51-53 in Section IV(B). MCDONALD’S USA, LLC 29 the General Counsel’s approval”). Respondents elide this issue entirely or refer to other Board decisions regarding the significance of General Counsel’s posi- tion with respect to a proposed settlement, without directly ad- dressing the Board’s discussion of this factor in UPMC. See McDonald’s Post-Hearing Brief at 15, Jo-Dan Post-Hearing Brief at 9. However, I find UPMC persuasive in this respect. UPMC is the Board’s most recent decision applying the Inde- pendent Stave analysis. In addition, UPMC directly addresses aspects of a settlement intended in lieu of a single employer find- ing and joint and several liability, as opposed to settlement pro- visions remedying violations of the statute in and of themselves. Respondents cite no other Board decisions applying the Inde- pendent Stave analysis to settlement provisions specifically ad- dressing single or joint employer status and/or joint and several liability. As a result, I find that UPMC’s analysis of the consid- eration given to General Counsel’s position with respect to the proposed settlement is instructive. In addition, General Counsel and McDonald’s appear to lack a coherent understanding of McDonald’s obligations under the proposed informal settlements. As discussed in further detail in Section IV(B), below, both General Counsel and McDonald’s have made contradictory representations on the record and in their Briefs regarding the Settlement Agreements’ provisions and McDonald’s obligations. These conflicting assertions are significant, and specifically involve the portions of the Settle- ment Agreements – the default provisions contained in the Per- formance section and the language regarding the establishment and workings of the Settlement Fund – purportedly intended as a remedy in lieu of a finding of joint employer status. Given General Counsel and McDonald’s confusion regarding these as- pects of the Settlement Agreements, affording substantial weight to their positions regarding approval of the proposed settlement is not appropriate. For all of the foregoing reasons, I find that the parties’ posi- tions with respect to the proposed settlement do not militate in favor of approval of the Settlement Agreements pursuant to In- dependent Stave. B. Whether the Settlement is Reasonable The second of the Independent Stave factors requires an eval- uation of whether the settlement is reasonable in light of the na- ture of the alleged violations, the inherent risks of litigation, and the stage of the litigation involved. Here, I find that the circum- scribed involvement of McDonald’s in the informal Settlement Agreements’ remedies does not begin to approximate the reme- dial effect of a finding of joint employer status. Furthermore, given the history of this case and the propensity for additional litigation, the form of the Settlement Agreements is simply inad- equate. The complexity of the Settlement Agreements’ enforce- ment provisions and the parties’ conflicting interpretations indi- cate that even if a mutual understanding exists between them the proposed settlements will likely engender further proceedings, as opposed to finally resolving this matter. In addition, while the Consolidated Complaint does not allege that McDonald’s com- mitted unfair labor practices, General Counsel has adduced a sig- nificant quantum of evidence in support of the theory that McDonald’s and the Franchisee Respondents engaged in a coordinated effort to effectuate a “mutual interest in warding off union representation” of employees at the Franchisee Respond- ent locations. Tr. 972-973 (G.C. Opening Statement), quoting Capitol EMI Music, 311 NLRB 997, 999 (1993), enf’d. 23 F.3d 399 (4th Cir. 1994). Finally, given the stage and posture of this particular litigation, the Settlement Agreements are not a reason- able counterpoint to the risks of completing the record and sub- sequent proceedings. Given the scenario that the Board evaluated in UPMC, its de- cision is relevant to applying the second of the Independent Stave criteria. UPMC involved allegations that UPMC, as a single em- ployer with its subsidiary UPMC Presbyterian Shadyside, com- mitted multiple violations of Sections 8(a)(1), (2), (3) and (4) of the Act. 365 NLRB No. 153 at p. 1, 22. General Counsel and the Charging Party union served Subpoenas Duces Tecum on UPMC and Presbyterian Shadyside seeking documents relevant to the single employer allegation, and the Respondents’ Petitions to Revoke were denied by the ALJ. UPMC, 365 NLRB No. 153 at p. 1-2, 23, fn. 2. Respondents refused to comply with the ALJ’s order that they produce documents pursuant to the Sub- poenas, and General Counsel initiated enforcement proceedings in the United States District Court for the Western District of Pennsylvania. UPMC, 365 NLRB No. 153 at p. 2, 23, fn. 2. The District Court granted General Counsel’s application for en- forcement of the Subpoenas, but stayed its order pending Re- spondents’ appeal to the United States Court of Appeals for the Third Circuit. Id. While the subpoena enforcement proceedings were underway, the parties presented evidence regarding the unfair labor practice allegations in the case over 19 days of trial. UPMC, 365 NLRB No. 153 at p. 2, 23. The ALJ then issued an order severing the single employer allegations from the unfair labor practice alle- gations, so that the still-pending subpoena enforcement proceed- ings did not delay resolution of the unfair labor practice issues. Id. The ALJ later issued a decision finding that Presbyterian Shadyside had violated the Act in various respects. Id. The com- plaint did not allege that UPMC independently committed any unfair labor practices, and “there was no evidence presented at trial” to that effect. UPMC, 365 NLRB No. 153 at p. 2, 24. The parties filed exceptions to the ALJ’s decision regarding the un- fair labor practice allegations with the Board. UPMC, 365 NLRB No. 153 at p. 2. About six months later, UPMC filed a partial motion to dis- miss the allegation that it comprised a single employer with Pres- byterian Shadyside, proposing that the single employer allega- tion “be resolved on the basis that Respondent UPMC shall guar- antee the performance of Presbyterian Shadyside of any remedial aspects of the Decision and Order which survive the exceptions and appeal process.” UPMC, 365 NLRB No. 153 at p. 2, 23. UPMC further stated in its briefs in support of the motion that as a result of its “guarantee,” “UPMC would be responsible for any remedy along with Presbyterian Shadyside.” Id. General Coun- sel and the Charging Party opposed the motion. Id. The ALJ granted UPMC’s motion, dismissed the single employer allega- tion, and issued an order providing that “UPMC, its officers, agents, successors, and assigns, shall be the guarantor of any remedies that the Board may order in the original decision in this case,” and thereby “must ensure” that Presbyterian Shadyside DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 30 “takes all steps necessary to comply with any remedies that may be contained in the Board’s Order, including providing for any such remedies itself, if [] Presbyterian Shadyside is unable to do so.” UPMC, 365 NLRB No. 153 at p. 26. General Counsel and Charging Party filed exceptions to the ALJ’s decision. The Board upheld the ALJ’s dismissal of the single employer allegation and adopted his recommended Order as modified in the manner discussed below.30 UPMC, 365 NLRB No. 153 at p. 1, 11. The Board found that the General Counsel and Charging Party’s opposition to UPMC’s proposed guarantee was not de- terminative in terms of the first of the Independent Stave factors, and that the third and fourth factors militated in favor of approval of the proposed settlement. UPMC, 365 NLRB No. 153 at p. 7- 8. With respect to the second factor, the Board determined that “UPMC’s remedial guarantee is as effective as a finding of sin- gle employer status,” in that it rendered UPMC “liable for Pres- byterian Shadyside’s compliance with any remedy ordered and to…take any necessary action to ensure compliance” for unfair labor practices that Presbyterian Shadyside did not remediate. UPMC, 365 NLRB No. 153 at p. 8 (emphasis in original). Thus, the guarantee obviated the risk that UPMC would not eventually be adjudged a single employer with Presbyterian Shadyside, and therefore not responsible for compliance. UPMC, 365 NLRB No. 153 at p. 9. The Board also emphasized that Presbyterian Shadyside, and not UPMC, allegedly committed the unlawful conduct at issue, and there was no evidence adduced at the hear- ing that UPMC had committed violations of its own. UPMC, 365 NLRB No. 153 at p. 8-9. The Board further noted that ap- proval of the guarantee would expedite the resolution of the case, given that litigation of the single employer issue was at a halt pending a decision by the Third Circuit regarding the district court’s decision in the subpoena enforcement proceeding.31 UPMC, 365 NLRB No. 153 at p. 9. The Board modified the ALJ’s order to omit “officers, agents, successors and assigns” language that was not included in UPMC’s offer, noting that both UPMC and Presbyterian Shadyside were “stable corporate enti- ties with substantial assets.” UPMC, 365 NLRB No. 153 at p. 8. The Board therefore dismissed the single employer allegation, but retained UPMC as a party to the case “for the purpose of ensuring enforcement of UPMC’s guarantee of the remedies, if any, ultimately ordered against Presbyterian Shadyside.” UPMC, 365 NLRB No. 153 at p. 11. 30 At the time that the Board issued this decision, the parties’ excep- tions to the ALJ’s decision regarding the unfair labor practice allegations remained pending. UPMC, 365 NLRB No. 153 at p. 2. 31 Once the Third Circuit issued a decision, the parties would present evidence before an agency ALJ regarding the single employer issue, an estimated four to five day process, the ALJ would issue a decision, and the parties could avail themselves of the exceptions and appeals process. UPMC, 365 NLRB No. 153 at p. 9. 32 Of course, a putative joint employer may avoid joint and several liability by establishing that “it neither knew, nor should have known, of the reason for the other employer’s action or that, if it knew, it took all measures within its power to resist the unlawful action.” Adams & As- sociates, Inc., 363 NLRB No. 193 at p. 1, n. 7, quoting Capitol EMI Mu- sic, 311 NLRB at 1000 (emphasis omitted). My discussion of these basic legal precepts here and infra does not in any way constitute any finding 1. Remedial Effect In the specific context of this case, McDonald’s obligations pursuant to the Settlement Agreements do not constitute any- thing approaching as effective a remedy as a finding of joint em- ployer status. Had General Counsel established that McDonald’s was a joint employer with the Respondent Franchisees, McDon- ald’s would have been “jointly and severally responsible for rem- edying” any unfair labor practices the Respondent Franchisees committed.32 See, e.g., Adams & Associates, Inc., 363 NLRB No. 193 at p. 1, 7 (2016), enf’d. 871 F.3d 358 (5th Cir. 2017); Turtle Bay Resorts, 353 NLRB 1242, n. 5 (2009). General Coun- sel represented at the April 5, 2018 hearing that the objective in initiating this case was establishing McDonald’s joint and sev- eral liability with the Franchisee Respondents for the unfair labor practices alleged in the Consolidated Complaint. Tr. 21254. General Counsel further stated that the Special Notice and Set- tlement Fund components of the Settlement Agreements were specifically intended in lieu of a finding of joint employer status. Tr. 21254. Thus, McDonald’s remedial obligations in lieu of joint and several liability are apparently limited to mailing out a Special Notice if a Franchisee Respondent fails to remedy a vio- lation of a Settlement Agreement within 14 days after notifica- tion, and to collecting and providing to Regional Directors mon- ies comprising the Settlement Fund to remedy a limited universe of possible future violations.33 Tr. 21246. McDonald’s obligations under the Settlement Agreement are therefore not comparable in any way, shape, or form to joint and several liability, or to the guarantee of performance that the Board found to approximate joint and several liability in UPMC.34 Here there is no guarantee by McDonald’s of the Fran- chisee Respondent’s performance whatsoever; McDonald’s is not “responsible for any remedy along with” the Respondent Franchisees. UPMC, 365 NLRB No. 153 at p. 8. The conten- tions advanced in support of accepting a settlement without a guarantee on the part of McDonald’s are not convincing. Gen- eral Counsel states that the Settlement Agreements contain no guarantee because McDonald’s would not agree to one. G.C. Post-Hearing Brief at 12-14. This may be factually accurate, but it is not a compelling argument for the Settlement Agreements’ approval. General Counsel further argues that a guarantee ap- proximating joint and several liability under UPMC is inappro- priate because McDonald’s did not have the authority to effectu- ate the reinstatement of the three Franchisee Respondent regarding joint employer status, the unfair labor practice allegations, or any contention any party could raise or establish pursuant to Capitol EMI Music. 33 The parties’ confusion over the extent of McDonald’s involvement in the remedies is discussed in further detail below. 34 Respondents argue in their Post-Hearing Briefs that UPMC did not “create a template” for a settlement in lieu of a finding of single or joint employer status pursuant to Independent Stave. McDonald’s Post-Hear- ing Brief at 2, 23-24. However, as discussed previously, Respondents do not cite any other Board decision directly addressing a settlement in lieu of a finding of single or joint employer status in the context of the Independent Stave analysis. Regardless, it should be evident from my overall discussion that an analysis of the Independent Stave factors de- termines whether approval of the Settlement Agreements is appropriate. MCDONALD’S USA, LLC 31 employees that were allegedly unlawfully discharged. Id. But such considerations have not precluded the imposition of joint and several liability on joint employers, even in the only case cited by General Counsel for that proposition. See Skill Staff of Colorado, 331 NLRB 815, 815-818 (2000) (finding joint em- ployers “jointly liable” in connection with unlawful discharge, while ordering one of the two joint employer entities to reinstate disciminatee). In addition, Capitol EMI Music, cited by General Counsel in this context, places the burden on the joint employer to prove that it neither knew nor should have known of the un- lawful motivation involved, or that if it knew it “took all measures in its power to resist.” 311 NLRB at 1000; see also Adams & Associates, Inc., 363 NLRB No. 193 at p. 1, n. 7. Cap- itol EMI Music thus sets forth an affirmative defense which must be established by record evidence, and not a remedial precept. Furthermore, the Board has construed Capitol EMI Music as ap- plicable in cases where “one employer supplies employees to the [other] employer,” a scenario that General Counsel contended was irrelevant in his Opening Statement.35 Skill Staff of Colo- rado, 331 NLRB at 816; see Tr. 971-973. Respondents’ assertions with respect to the infeasibility of a guarantee are also not persuasive. McDonald’s and the Franchi- see Respondents contend that a guarantee is inappropriate be- cause their franchise relationship is different from the relation- ship between the parent and subsidiary entities in UPMC. How- ever, the specific legal or business relationship between two en- tities is not relevant in the remedial sense, i.e., it does not legally determine the ability of one to guarantee the performance of an- other. See Black’s Law Dictionary (10th Ed. 2014) (defining a guarantor as “[s]omeone who makes a guaranty or gives security for a debt”). In addition, the Franchise Agreements in evidence would appear to provide McDonald’s with sufficient authority over the Franchisee Respondents’ operations to guarantee their performance under the Settlement Agreements. For example, the Franchise Agreements specifically state that the Franchisee Respondents “shall comply with the entire McDonald’s Sys- tem,” including complying with “all business policies, practices, and procedures imposed by McDonald’s.” Franchise Agreement ¶¶ 12, 12(a). The Franchise Agreements further state that McDonald’s has “the right to inspect” Franchisee Respondent locations “to ensure that Franchisee’s operation thereof is in compliance with the standards and policies of the McDonald’s System.” Franchise Agreement ¶ 12. Pursuant to the Franchise Agreement, the Franchisee Respondents are required to “comply with all federal, state, and local laws, ordinances, and regula- tions” pertinent to their operations at the location. Franchise Agreement ¶ 12(k). Failure to “maintain and operate” a location “in compliance with the standards prescribed by the McDonald’s System” constitutes a “material breach” of the Franchise Agree- ment, resulting in McDonald’s option to terminate the Agree- ment itself. Franchise Agreement ¶ 18; see also Franchise Agreement ¶ 19 (describing McDonald’s prerogatives in the event of a non-material breach of the agreement, including “the 35 General Counsel further argued in his Opening Statement that the affirmative defense set forth in Capitol EMI Music does not apply to al- leged violations of Section 8(a)(1), and was irrelevant because McDon- ald’s and the Franchisee Respondents, the alleged joint employers here, right to seek judicial enforcement of its rights and remedies, in- cluding…injunctive relief, damages, or specific performance”). Furthermore, the record contains evidence of McDonald’s in- volvement in the posting of materials directed to Franchisee Re- spondent employees, for example, a “9-in-1” poster informing employees of their rights under federal and state law, and No Solicitation and No Loitering signs. See, e.g., Tr. 1648-1650, 1652, 1654-1655, 2097, 3237-3240, 2128-2130, 3478-3481; G.C. Ex. HR 9, 29, 300, 375, 621; see also materials cited at footnote 54, infra, regarding McDonald’s involvement in No So- licitation and No Loitering policies in effect at the Franchisee Respondent locations. When questioned at the hearing, McDonald’s counsel did not elucidate any legal basis or record evidence establishing that it was devoid of the requisite authority to guarantee the Franchisee Respondent’s performance, asserting only that the Franchisee Respondents were “independent business people,” and “it’s their responsibility to pay for it, not ours.” Tr. 21317-21318. How- ever, despite this contention, the Settlement Agreement provides that “McDonald’s USA, LLC shall deliver to the National Labor Relations Board (“Board”) funds provided by the Franchisees in the amount of $250,000.00, which shall be transferred by the Board into a ‘Settlement Fund’” (emphasis added). In addition, General Counsel states in his Post-Hearing Brief McDonald’s “has the responsibility for deciding whether and when to trigger any disbursement from the fund” to the Franchisee Respondent employee receiving it. Post-Hearing Brief at p. 9, fn. 23. Thus, McDonald’s will ostensibly collect contributions from the Fran- chisee Respondents, transfer them to the Agency for placement in a Settlement Fund, and then determine “whether and when” monies from that Fund will be provided to Franchisee Respond- ent employees in the event of an uncured breach of the Settle- ment Agreement during the 15 months of the Fund’s existence. Its apparent ability to take these measures contradicts its conten- tion that it lacks the legal or business capacity to guarantee the Franchisee Respondents’ performance pursuant to the Settle- ment Agreements. The form of the proposed Settlement Agreements further weighs against a finding that the Settlement Agreements consti- tute a reasonable resolution of this matter. Section 101.9(b)(1) of the Board’s Rules and Regulations states that “After the issu- ance of a complaint, the Agency favors a formal settlement agreement, which is subject to the approval of the Board in Washington, D.C.” and includes “the respondent’s consent to the Board’s application for the entry of a judgment by the appropri- ate circuit court of appeals enforcing the Board’s order.” Indeed, the putative single employer’s guarantee in UPMC was embod- ied in the ALJ’s order, as affirmed by the Board in its order, which could then be enforced in one of the federal Courts of Ap- peal. 365 NLRB No. 153 at p. 11, 26. Here, by contrast, the obligations of McDonald’s and the Respondent Franchisees are contained in informal Settlement Agreements, which are en- forceable only through the complicated default processes they “perceive[d] a mutual interest in warding off union representation from the jointly managed employees.” Tr. 972-973, quoting Capitol EMI Mu- sic, 311 NLRB at 999; also citing D&F Industries, Inc., 339 NLRB 618, n. 2 (2003). DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 32 contain, and, according to General Counsel, a separate proceed- ing before an ALJ to establish that Respondents have somehow breached them. Tr. 21247. An ALJ order in that situation find- ing a breach of a Settlement Agreement could then be subject to exceptions filed with the Board, and the Board’s order subject to a Request for Review before one of the federal Courts of Appeal. The form of the Settlement Agreements here is therefore legally distinct from and substantially less effective than those contained in an ALJ or Board order, and does not obviate further litigation in the manner of the ALJ and Board orders in UPMC. 365 NLRB No. 153 at p. 9. Charging Parties also contend that a formal settlement is nec- essary because some of the Franchisee Respondents, and McDonald’s itself, can be considered “repeat offenders.” Gen- eral Counsel Memorandum GC 18-03 defines “repeat offenders” in this context as “the universe of charged parties who have been found to have violated the Act by a Regional office in the recent past,” and states that such circumstances may warrant “insisting on a formal stipulation” as opposed to an informal settlement. It is beyond dispute at this point that some franchise locations tech- nically operated by different entities are ultimately controlled by the same owner-operator organization, which directs and coordi- nates human resources activities and policies for all of the fran- chise entities under its control. Among the New York Fran- chisees, for example, McConner Street Holding, LLC (which op- erates the facilities at 2142 Third Avenue and 2049 Broadway), Bruce C. Limited Partnership (which operates the facility at 4259 Broadway), and Mic-Eastchester, LLC (which operated the fa- cility at 341 5th Avenue), were all ultimately owned and operated by Bruce Colley during the pertinent period. See Tr. 1190-1191, 1515, 7198; G.C. Ex. F 23-30. Each of these franchisees is al- leged in the Consolidated Complaint to have committed multiple unfair labor practices. In addition, separate complaints have been issued against franchisee entities ultimately controlled by owner-operators that also control Franchisee Respondents herein. Thus, General Counsel in his Post-Hearing Brief identi- fies several additional cases involving separate complaints is- sued against other franchisee entities owned by Nick Karavites, who owns or partially owns four of the Franchisee Respondents in Chicago (13-CA-159428), Ronnie and Lillian Lofton (13-CA- 142517 and 13-CA-177346) who also own a Franchisee Re- spondent in Chicago, and Donald Bailey (31-CA-189714), who owns a Franchisee Respondent in Los Angeles. Respondent McDonald’s Restaurants of Illinois, Inc. warrants special consideration in this context, due to its status as a wholly- owned subsidiary of McDonald’s. In 2015, General Counsel and Charging Parties served Subpoenas Duces Tecum on Respondent McDonald’s Restaurants of Illinois, Inc.36 In its Petition to Re- voke General Counsel’s Subpoena, McDonald’s represented that McDonald’s Restaurants of Illinois, Inc. was “a wholly-owned subsidiary of McDonald’s USA, LLC,” such that “There is no involvement of any independent franchisee and no alleged issue 36 General Counsel and Charging Parties argued that a comparison of the implementation of McDonald’s policies, tools and programs at a fa- cility it totally controls with their implementation at Franchisee Re- spondent locations was relevant to a determination of joint employer sta- tus. General Counsel’s Opposition at p. 2. of joint employment.”37 See General Counsel’s Opposition to McDonald’s Petition to Revoke Subpoena Duces Tecum, Ex. A, p. 4-5 (March 5, 2015). On March 30, 2015, during oral argu- ment regarding the Petition to Revoke, McDonald’s counsel re- iterated this position, claiming that, “we have admitted we have total, absolute control over everything” with respect to McDon- ald’s Restaurants of Illinois, Inc. McDonald’s counsel further represented, “There’s no doubt that the corporation controls all operations at that restaurant, that the restaurant is owned by the company,” and “It’s what we call a corporate-owned store, owned and operated.” Tr. 60-61. I granted McDonald’s Peti- tions to Revoke General Counsel and Charging Parties’ Subpoe- nas Duces Tecum on that basis. Tr. 64-66. Now, however, McDonald’s claims in its Post-Hearing Brief that McDonald’s Restaurants of Illinois, Inc. “is a different entity from McDon- ald’s USA,” and that conduct at that location is irrelevant to re- peat offender status as a result. McDonald’s Post-Hearing Brief at p. 21, n. 15. That specious argument is rejected, and I find that the similarity of the violations alleged at that location to those which allegedly took place at the other Charged Party locations indicates that a formal settlement rather than an informal agree- ment is appropriate here. Furthermore, the Settlement Agreements dispense with com- mon practice before the agency by providing that General Coun- sel will move for an order approving withdrawal of the Consoli- dated Complaints “no later than ten days” after approval. Typi- cally when a settlement is reached after the hearing opens in a case, General Counsel makes a motion on the record for an in- definite adjournment pending the Charged Party’s full compli- ance with the settlement’s terms. See NLRB Case Handling Manual, Part 1, Section 10154.4. General Counsel only moves to withdraw the complaint after compliance is complete. Id. General Counsel provided no explanation for abandoning this common practice in the instant case, particularly where 30 sepa- rate Settlement Agreements will require the efforts of six Re- gions’ compliance personnel. Overall, given the unprecedented and enormous resources expended in connection with this case – 155 days of trial over three years involving the testimony of ap- proximately 150 witnesses, incessant motion practice, subpoena enforcement litigation in five different venues throughout the country, and Special Master adjudication of hundreds of privi- lege claims – an informal settlement which provides for the anomalous withdrawal of the Consolidated Complaint in 10 days without full compliance is manifestly unreasonable. The Settlement Agreements’ omission of the typical language binding a respondent’s “officers, agents, successors, and as- signs” with respect to the relief in question is also problematic in this case. In UPMC the Board determined that excising such language did not preclude a finding that UPMC’s guarantee was reasonable pursuant to Independent Stave. 365 NLRB No. 153 at p. 8, n. 14. Specifically, the Board found that such language was unnecessary because “the record reveals that both UPMC 37 The Petition to Revoke was filed by the attorneys representing McDonald’s USA, LLC on behalf of both that entity and McDonald’s Restaurants of Illinois, Inc. MCDONALD’S USA, LLC 33 and Presbyterian Shadyside are stable corporate entities with substantial assets.” Id. Here, by contrast, the New York Fran- chisees acknowledge that four of the ten Franchisee Respondents or Charged Party locations in New York City have changed own- ership. Post-Hearing Brief at 6-7. In addition, it appears that one of the New York Franchisees has ceased to operate entirely, based on their assertion that the Settlement Agreement requires posting of Notices at “all nine charged New York stores remain- ing in operation.” Post-Hearing Brief at p. 6. Charging Parties also contended at the hearing and in their Post-Hearing Briefs that ownership at three additional Charged Party locations has changed. Tr. 21290-21291; C.P. Post-Hearing Brief at p. 36, n. 70; C.P. Reply Brief at p. 8, n. 8-9. It therefore does not appear that the Franchisee Respondents subject to the Settlement Agree- ments are “stable” entities such that the typical language “offic- ers, agents, successors, and assigns” in a remedial order is un- necessary. Furthermore, it does not appear that the proposed settlement will conclusively resolve these cases and preclude additional proceedings given the Settlement Agreements’ language and my experience thus far with this case and these parties. In fact, the complicated default process and the possibility of a proceeding to establish a breach of a Settlement Agreement actually increase the likelihood of further litigation. Of course, as General Coun- sel acknowledged at the hearing, a contested allegation that a Settlement Agreement was breached could result in another hearing before an Administrative Law Judge, with possible Ex- ceptions and appeals. Tr. 21247. In addition, the default and Settlement Fund provisions are complex, with multiple phases and components of relief. Furthermore, the relationship between those aspects of the Settlement Agreement and the steps de- scribed in the Notification of Compliance section is unclear. Specifically, the Notification of Compliance section requires all parties to notify the appropriate Regional Director regarding “what steps the Charged Parties have taken to comply with the Agreement…within 5 days, and again after 60 days, from the date of approval of this Agreement.” However, the impact of these notifications on the default process is not articulated. In this respect, and in light of the procedural history described above, the parties’ propensity for litigation, constant battles over miniscule strategic advantage and inability to resolve issues in a cooperative fashion virtually guarantee that additional proceed- ings are forthcoming. Indeed, based on the array of conflicting contentions advanced by General Counsel and McDonald’s regarding McDonald’s ob- ligations in lieu of a finding of joint employer status, it appears that the parties’ understanding of the Settlement Agreements’ terms is incomplete or at odds. For example, General Counsel represented on March 19, 2018 that pursuant to the Settlement Agreements’ default provisions if a Franchisee Respondent fails to cure an alleged breach of a Settlement Agreement, “It then turns to McDonald’s U.S.A. to remedy or implement the remedy that the Franchisee failed to,” i.e. McDonald’s would be respon- sible for effecting whatever remedy the Franchisee Respondent had not performed. Tr. 21198-21199. However, on April 5, 2018, General Counsel depicted McDonald’s obligations when a Franchisee Respondent fails to cure a breach of the Settlement Agreement as significantly more limited. Specifically, General Counsel described McDonald’s failure to remedy a Franchisee Respondent’s breach of the Settlement Agreement solely as “failing to mail the Special Notice.” Tr. 21246. Thus, if a Fran- chisee Respondent failed to cure a breach of the Settlement Agreement, McDonald’s would only be required to mail out the Special Notice, as opposed to implementing the remedy initially required of the Franchisee Respondent. As a result, because the language of the Settlement Agreement did not change after March 19, 2018, General Counsel appears to have significantly misunderstood the scope of McDonald’s responsibilities under the default provisions. The parties have also made contradictory representations re- garding the establishment and workings of the Settlement Fund. The Settlement Agreements state that McDonald’s “shall deliver to“ the Board “funds provided by the franchisees in the amount of $250,000” to comprise the Settlement Fund, and that any un- used balance of the Fund will be returned to McDonald’s “for distribution to the appropriate franchisee.” McDonald’s reiter- ated as much in its Motion to Approve, submitted on March 19, 2018. Motion to Approve at 9; see also McDonald’s Post-Hear- ing Brief at 11. At the hearing on March 19, 2018, General Counsel described the Settlement Fund as “McDonalds U.S.A.’s set up for helping cure monetary remedies that would be part of a breach.” Tr. 21200. However, when questioned by me on April 5, 2018, McDonald’s counsel denied that the company was “coordinating logistically…the contributions to and the opera- tions of the settlement fund.” Tr. 21318. McDonald’s counsel contended that the Respondent Franchisees would make contri- butions to the Settlement Fund and the Regional Directors would make disbursements from it, claiming, “We don’t have anything to do with it.” Tr. 21318. General Counsel’s Post-Hearing Brief, however, described McDonald’s role in the Settlement Fund’s operations as even more extensive than his representations on the record. In his Post-Hearing Brief, General Counsel asserted that McDonald’s will not only collect and return any unused “contri- butions” to the Settlement Fund, but that McDonald’s itself will determine when a disbursement from the Settlement Fund is war- ranted: The settlement agreements impose the responsibility for the fund on McDonald’s. McDonald’s was obligated to collect and deliver the $250,000 being placed in the fund and has the responsibility for deciding whether and when to trigger any disbursement from the fund. See, e.g., “Settlement Fund” sec- tion in GC Exhibit Settlement 1. G.C. Post-Hearing Brief at p. 9, n. 23 (emphasis added). These conflicting accounts evince a substantial and troubling level of confusion among the parties regarding McDonald’s role in the establishment and operations of the Settlement Fund. They raise significant doubt as to whether there was a genuine meeting of the minds regarding these crucial provisions. See Doubletree Guest Suites Santa Monica, 347 NLRB 782, 784 (2006) (settle- ment agreement must be set aside where “the parties’ different understandings of the language…warrant the conclusion that there was no meeting of the minds”). General Counsel’s description of McDonald’s authority with respect to disbursements from the Settlement Fund as essentially discretionary also contradicts the parties’ earlier statements DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 34 construing disbursements as mandatory in the context of the de- fault process. At the April 5, 2018 hearing, General Counsel de- scribed the issuance of a Special Notice and a disbursement from the Settlement Fund as directly engendered by a Franchisee Re- spondent’s uncured breach of the Settlement Agreement. Spe- cifically, General Counsel stated that “If there’s an alleged breach and a failure by a Respondent franchisee to cure, then the special notice issues,” which “triggers disbursement from the settlement fund.”38 Tr. 21251-21253. McDonald’s counsel also represented that issuing the Special Notice “directs the Regional Director” to make a disbursement from the Settlement Funds, and, rather cryptically, “all we do is say, what the facts were.” Tr. 21318-21319. Contrary to the parties’ assertions at the hear- ing, however, General Counsel’s interpretation of the Settlement Fund provisions in his Post-Hearing Brief appears to allow McDonald’s, at its sole discretion, to decide “whether and when to trigger any disbursement from the fund.” Furthermore, both General Counsel and McDonald’s described Settlement Fund disbursements as triggered by McDonald’s distributing the Spe- cial Notice.39 Tr. 21252-21253, 21318-21319. Thus, General Counsel’s contention that a disbursement from the Settlement Fund is entirely McDonald’s prerogative calls into question the nature of McDonald’s obligation to disseminate the Special No- tice as well. If distribution of the Special Notice and disburse- ment from the Settlement Fund are both solely functions of McDonald’s discretion, McDonald’s “support” for the remedies here is utterly illusory. In any event, given the pervasive uncer- tainty caused by these discrepancies, and based upon my three years and 155 trial days of experience with these parties, it is simply inconceivable that the default and Settlement Fund pro- visions, and/or allegations that a Settlement Agreement has been breached, will not engender further litigation.40 Issues of McDonald’s discretion aside, it does not appear that the Settlement Fund provisions constitute a significant deterrent to future conduct violating the Act or a meaningful remedial measure. Although the Settlement Fund provides for backpay and an additional incentive payment if the discriminatee chooses to waive reinstatement, the Fund is only applicable to Franchisee Respondents alleged in the Consolidated Complaint to have committed violations of Section 8(a)(3) which involve a mone- tary remedy. Furthermore, Settlement Fund disbursements only become available if the particular Franchisee Respondent com- mits and fails to cure a violation of precisely the type alleged in the Consolidated Complaint. Tr. 21248-21249; McDonald’s Re- ply Brief at 13. As a result, if for example a Franchisee 38 The Settlement Agreements provide that Settlement Fund disburse- ments “will be triggered when McDonald’s USA, LLC notifies the Re- gional Director that McDonald’s USA will issue the approved Special Notice.” 39 The Settlement Agreement links the two as well. The Performance section states that if the Franchisee Respondent fails to cure a breach after 14 days’ notice from the Regional Director, the Regional Director “will promptly provide McDonald’s USA LLC the approved Special No- tices…and then provide 14 days to McDonald’s USA LLC to mail the approved Special Notices.” The Settlement Fund section states that “Disbursement from the Settlement Fund to the alleged discriminatee(s) will be triggered when McDonald’s USA, LLC notifies the Regional Di- rector that McDonald’s USA will issue the approved Special Notice.” Respondent which was alleged in the Consolidated Complaint to have unlawfully reduced an employee’s hours discharges that same (or another) employee for retaliatory reasons, there is no recourse to the Settlement Fund to remedy the unlawful dis- charge. Although McDonald’s portrays this result as common in the context of Board settlements, that is definitively not the case. Reply Brief at 13. It is well-settled that a settlement agreement may be set aside “if there has been a failure to comply with the provisions of the settlement agreement or if postsettlement unfair labor practices are committed.” Twin City Concrete, 317 NLRB 1313 (1995), quoting YMCA of Pikes Peak Region, 291 NLRB 998, 1010 (1988), enf’d. 914 F.2d 1442 (10th Cir. 1990). Post- settlement violations justifying revocation of a settlement agree- ment need not be identical to the violations addressed in the set- tlement agreement itself. See, e.g., Twin City Concrete, 317 NLRB at 1310, 1315, 1316 (employer’s post-settlement assis- tance to employee filing a decertification petition in violation of Section 8(a)(5) warranted revocation of settlement agreement re- garding refusal to bargain); YMCA of Pikes Peak Region, 291 NLRB at 1010 (post-settlement discharge of employee violating Sections 8(a)(3) and (4) justified revocation of settlement agree- ment regarding threats to discharge her violating Section 8(a)(1)); see also Oster Specialty Products, 315 NLRB 67, 73- 74 (1994) (post-settlement promise of benefit warranted revoca- tion of settlement agreement addressing different violations of Section 8(a)(1)); Nashville Plastic Products, 313 NLRB 462, 468 (1993). In addition, the Special Notice McDonald’s must mail to the Franchisee Respondent employees in the event of an uncured vi- olation is insubstantial compared with the Notice typically re- quired pursuant to standard NLRB informal settlement agree- ments. The Settlement Agreements here apparently provide that the Special Notice will list solely the violations by which the Franchisee Respondent allegedly breached the Settlement Agreement itself, and not all of the violations originally alleged in the Consolidated Complaint. Nor will the Special Notice in- clude the specific remedial assurances contained in a traditional Notice, which are modeled after the violations alleged. The Spe- cial Notice contains a general statement of employee rights under the NLRA, and the standard description of the agency and its purposes. Other than that, the Notice states only that the Fran- chisee Respondent has not complied with the Settlement Agree- ment, that in such situations the Settlement Agreement requires that McDonald’s send out the Special Notice, and that McDon- ald’s disavows the conduct which violated the Settlement 40 The fate of the parties’ Stipulation regarding the deferred objections process, discussed previously, is portentous here. Even through this Stip- ulation was entirely a creature of the parties’ negotiations, they were un- able to agree upon modifications regarding the time and format for filing deferred objections after the cases were severed. After my exhortations that they address these issues amongst themselves were fruitless, I issued orders regarding both issues which were the subject of repeated Motions for Reconsideration by the Franchisee Respondents. See Orders on De- ferred Objections dated January 18, 2017 and July 13, 2017; Orders Denying Motions for Reconsideration dated October 3, 2017 and Octo- ber 17, 2017. MCDONALD’S USA, LLC 35 Agreement. Thus, if a Franchisee Respondent breaches a Settle- ment Agreement by failing to post the required Notice and fails to cure that breach, no Notice fully detailing the Franchisee Re- spondent’s alleged violations, and consonant reassurances, will be provided to employees. In addition, the Special Notice con- tains “non-admissions” language stating that the Special Notice does not constitute an admission that McDonald’s is a joint em- ployer with the Franchisee Respondent in question. The Board has held that non-admissions clauses should not be included in a Board Notice to Employees “under any circumstances.” Man- chester Plastics, 320 NLRB 797, n. 1 (1996), quoting Pottsville Bleaching Co., 301 NLRB 1095, 1095-1096 (1991). Thus, Gen- eral Counsel’s argument that the Special Notice will ameliorate the effects of an additional violation breaching the Settlement Agreement which the Franchisee Respondent has failed to cure is not convincing. The Settlement Agreement’s provisions regarding the Fran- chisee Respondents’ dissemination of the Notice are also inade- quate in certain respects. There is no requirement for electronic posting of the Notice via email, intranet or internet, as prescribed in J. Picini Flooring, 356 NLRB 11 (2010), despite evidence that during 2012 through 2014 employees at Franchisee Respondent locations received training electronically using materials devel- oped and disseminated by McDonald’s. See, e.g., Tr. 13451- 13453, 13926, 13993-13994, 14860, 14874-14879, 15039- 15040, 15053-15054, 15289, 15471, 15475-15477, 15589, 15596-15597, 15908, 15910, 15914-15918, 16074-16077, 17105-17107, 17892-17893, 19862; G.C. Ex. Lewis 50, TR 25 (p. 19). In addition, as Charging Parties note, there is also record evidence that McDonald’s distributed labor relations materials, such as legally required notices to employees, to the Franchisee Respondents for posting. See materials cited on p. 24, supra, and at fn. 54, infra. General Counsel states that electronic post- ing of the Notice was not required because McDonald’s did not communicate with employees by e-mail and employees’ use of a McDonald’s connection was “intermittent,” such that “the best way to inform employees of the notices” was a physical posting alone. Tr. 21243-21244; G.C. Post-Hearing Brief at p. 8, n. 20. However, as discussed above, there is evidence indicating regu- lar use of the McDonald’s connection and electronic materials for the training and orientation of employees at the Franchisee Respondent locations. In addition, all of the evidence presented in the instant case applied solely to practices in effect and events which occurred from January 1, 2012 through December 31, 2014. There is no indication here that General Counsel consid- ered any information regarding McDonald’s and the Franchisee Respondents’ practices regarding electronic communications with employees at franchise locations after that time. By con- trast, J. Picini Flooring contemplates the gathering of evidence regarding a respondent’s customary means for communicating with employees at a time more proximate to the implementation of remedies. 356 NLRB at 13-14; see also Apex Linen Service, 366 NLRB No. 12 at p. 2, 13 (2018). Finally, J. Picini Flooring does not involve an assessment as to “the best way to inform 41 As discussed above, McDonald’s and the Franchisee Respondents argued in those Motions that each Franchisee Respondent location should be the subject of a separate proceeding. My October 12, 2016 employees of the notices,” as General Counsel contends, but only a consideration of whether the respondent “customarily communicates with its employees or members electronically.” 356 NLRB at 13-14. Finally, based on the above discussion it must be noted that overall the relief contained in the proposed Settlement Agree- ments is not materially different from offers to settle the case made by the Franchisee Respondents prior to the opening of the hearing. On the first day of the hearing, March 30, 2015, McDonald’s stated on the record that some of the Franchisee Re- spondents had offered to resolve the allegations against them without an admission of joint employer status, and that General Counsel had rejected such proposals. Tr. 112. In their opening statements on March 10, 2016, McDonald’s and several of the Franchisee Respondents represented that they had made attempts to settle the cases against them which would have provided full relief with respect to the alleged violations, but General Counsel refused to resolve the cases without an agreement as to joint em- ployer status. Tr. 1012-1013. At the hearing on April 5, 2018, General Counsel, McDonald’s, the New York Franchisees, and Jo-Dan all confirmed this sequence of events. Tr. 21254-21256, 21260-21264. As a result, the thirty individual Settlement Agreements – one with each Franchisee Respondent – do not ap- pear to accomplish anything more than what ostensibly could have been achieved prior to the start of the three-year hearing in this matter. They also effectively grant McDonald’s and the Franchisee Respondents’ Motions to Sever which I denied on February 20, 2015, as affirmed by the Board on January 8, 2016.41 McDonald’s USA, LLC, 363 NLRB No. 91. As such, the Settlement Agreements essentially render a significant por- tion of this three-year, 155-day proceeding a nullity. For all of the foregoing reasons, I find that the obligations in- cumbent upon McDonald’s pursuant to the Settlement Agree- ments do not in any way approximate the remedial effect of a finding of joint employer status. In addition, even in the event that a genuine meeting of the minds exists the Settlement Agree- ments are not likely to definitively resolve the case, and will in- stead very possibly engender additional litigation. I further find that the questionable remedial impact of the Settlement Agree- ments overall does not justify accepting the settlement in lieu of further proceedings. All of these factors strongly indicate that the Settlement Agreements do not constitute a reasonable reso- lution to the instant case. 2. Conduct of McDonald’s As discussed above, the Board in UPMC also considered the conduct of putative single employer UPMC in evaluating whether its guarantee constituted a reasonable resolution of the single employer issue. The Board noted that the complaint did not allege that UPMC had committed any unfair labor practices, and the evidence did not establish any violations on the part of UPMC alone. UPMC, 365 NLRB No. 153 at p. 8-9. The Board therefore found that it was appropriate to hold Presbyterian Shadyside “primarily and directly liable,” with UPMC’s guaran- tee. Id. Order Severing Cases and Approving the parties’ Stipulation severed the cases in a geographical group (New York and Philadelphia), and not by Franchisee Respondent. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 36 While the Consolidated Complaint in the instant case does not allege that McDonald’s independently committed any unfair la- bor practices, McDonald’s has not been construed by General Counsel as a bystander liable only as a function of its business arrangements. General Counsel has since the case’s inception contended that McDonald’s coordinated and directed the activi- ties of its franchisees’ response to the Fight for $15 campaign, which included the violations of the Act alleged here. See Tr. 940-942, 973 (G.C. Opening Statement). General Counsel has further argued that McDonald’s coordination and direction of the Franchisee Respondents’ activities in connection with the Fight for $15 campaign substantiates the allegation that McDonald’s constituted a joint employer with the Franchisee Respondents. Id. In fact, General Counsel began the case by contending that the affirmative defense set forth in Capitol EMI Music, described above, did not apply here because McDonald’s and the Franchi- see Respondents “perceive[d] a mutual interest in warding off union representation from the jointly managed employees.” Tr. 972-973 (G.C. Opening Statement), quoting Capitol EMI Music, 311 NLRB at 999. Thus, General Counsel has adduced copious evidence perti- nent to McDonald’s activities in order to provide resources and 42 See, e.g., Tr. 1575-1576, 1897-1899, 1900-1904, 1908-1909, 1913- 1915, 1935-1937, 1939-1940, 1942-1945, 1946-1949, 3554-3556, 3558- 3560; G.C. Ex. HR 77, 78, 79, 81, 82, 83, 84, 85, 86, 87, 88, 129, 130, 131, 325, 358. 43 See, e.g., Tr. 1632-1634 (Division Human Resources Director of Employee Relations position created for McDonald’s East, West, and Central Divisions); Tr. 4074-4074, 12914, 12920-12925 (testimony of former West Division Labor Relations Director Jeanne Hardemion- Kemp); Tr. 3558-3560, G.C. Ex. HR 358, 500. 44 See, e.g., Tr. 1835, 1837-1838, 3950-3954, 4129-4131, 12983- 12984, G.C. Ex. HR 452 (National Market Activation Team); Tr. 4016- 4020, 4054-4055, G.C. Ex. HR 557 (New York); Tr. 3868-3869 (Phila- delphia); Tr. 2782-2784, 2897-2898, 2987-2988, 3284-3286, G.C. Ex. HR 601.19, 635.2 (Chicago); Tr. 2193-2194, 2196-2199 (Indianapolis); Tr. 10466, G.C. Ex. HR 845 (Sacramento); Tr. 4123-4124, 12939-12952, 12955-12959, G.C. Ex. HR 904-907, 909 (Los Angeles). 45 See, e.g., Tr. 4015-4016, 4023-4025, 4087, 6584-6589, 6592-6598, 6620-6622, 6632, 6657-6662, 6702-6712, 6716-6717, 6718-6722, 6723- 6726, 6726-6730, 6732-6733, 6744-6745, 6768-6770, 6932-6934, 9694- 9698, 9722-9726, 9740-9744, 10020-10024, 10629-10630, 10634- 10639, 10644-10648, 11736-11738, 11743-11749, 11755-11756, 11757-11758, 11761, 11765, 11767, 11775-11777, 11781, 11782- 11788, 11795-11799, 11803-11806, 11810-11823, 11826-11828, 11835-11846, 11851-11855, 11857-11864, 12220-12222, 12226-12230, 12251-12252, 12258, 12266-12267. G.C. Ex. BC 75, 78, 86, 88, 92, 1232, 1339, 1341, 1342, 1348, 1352, 1353, 1379, 1385 (p. 6-7, 25-27, 28, 31-38, 39-53, 64-67, 68-71, 79, 81-86, 88-96, 98, 99), 1386 (p. 3-7, 15-25, 26, 33-35, 36-45, 46-49), 1817, 2311 (p. 3-8, 25-34, 36), 2312 (p. 44-45 64-76), 1848 (p. 3-7, 10-15, 21, 24, 25, 35-36), HR 140, 151, 156, 187, 192, 706-709, 721, 728-730 743, 749, 752, 758, 760, 762 (New York); Tr. 6763-6766, G.C. Ex. HR 720 (Philadelphia); Tr. 2837-2843, 2932, 2958-2960, 2975-2977, 2979-2983, 10413-10415, 10429-10430, 10436-10437, 10906-10907, 10909-10913, 11656-11661, 11947-11953, 13174, 13178, G.C. Ex. BC 173, 174, 945 (p. 4-5, 7-8, 10-13) 1654, 1669, 1865 (p. 6, 10-12, 13-21, 23-26), 2021, HR 601.3, 601.4, 602.5, 602.11, 602.15, 813, 814-817, 819-821, 823-824, 826-828, 830 (Chi- cago), McDonald’s Ex. 44 (p. 8-19); Tr. 2115-2118, 2126-2131, G.C. Ex. HR 371, 374, 375 (Indianapolis); Tr. 3498-3502, 3528-3530, 3531- 3532, 3537-3540, 3541-3547, 3557-3560, 10466, G.C. Ex. HR 302, 310, support for its franchisees throughout the country in response to the Fight for $15 campaign. For example, General Counsel has introduced evidence that McDonald’s response to the Fight for $15 campaign was formulated and implemented from its corpo- rate headquarters, with notifications of upcoming campaign ac- tivities, summaries of events, and suggested policies developed and distributed by Vice President of U.S. Human Resources Danitra Barnett.42 General Counsel has further introduced evi- dence regarding Division-level Human Resources positions spe- cifically created by McDonald’s to focus on responding to the Fight for $15 campaign.43 General Counsel has adduced evi- dence regarding the creation and operations of Market Activa- tion Teams at a national level and by McDonald’s Region, staffed by McDonald’s corporate and Regional-level executives, to address the Fight for $15 campaign.44 General Counsel has introduced substantial evidence pertinent to McDonald’s corpo- rate and Regional staff monitoring of Fight for $15 campaign ac- tivities,45 communication with McDonald’s franchisees regard- ing impending, ongoing, and completed campaign activities,46 dissemination of specific advice to franchisees regarding their interactions with employees and the media,47 and assignment of McDonald’s Regional staff and security to visit specific 315, 316, 318, 319, 319.1, 319.2, 327, 358, 397, 847-849 (Sacramento); Tr. 4081-4084, 4143-4144, 12360-12364, 12933-12938, 12966-12969, 12986-12990, 1332-13329, G.C. Ex. BC 1149, 1948, 1949, HR 529, 530, 547, 899-902, 914, 917, 918, 938 (Los Angeles). This included specifi- cally monitoring activities at the Franchisee Respondent locations. See, e.g., G.C. BC 1352, 1385 (p. 25-27, 28, 39-53), 1386 (p. 7, 15-25, 26, 33-35, 36-45, 46-49), 1817, HR 140, 187, 706, 707, 708, 709, 730 (New York); G.C. Ex. HR 720 (Philadelphia); G.C. Ex. HR 815-817, 820, 821, 823, 824, 826, 827, 828, 830 (Chicago); G.C. HR 848-849 (Sacramento); G.C. Ex. HR 912, 914 (Los Angeles). 46 See, e.g., Tr. 1890-1896, 1900-1904, 1906-1907, 1913-1915, 1935- 1936; G.C. Ex. 82, 83; Tr. 6574-6579, 6599-6606, 6611-6613, 6628- 6629, 6630-6631, 6633-6634, 6636, 6641-6642, 6650-6652, 6657-6662, 6665-6666, 6712-6716, 6723-6726, 6791-6794, 11724, 11727, 11736- 11738, 11747-11749, G.C. Ex. BC 1232, 1352, HR 174, 184, 185, 190- 193, 198, 199, 208, 211, 515. 702, 716, 726, 728, 731, 764 (New York); Tr. 3873-3880, 3904-3908, 3915-3916, G.C. Ex. HR 400, 401, 411, 414, 416, 419, 549 (Philadelphia); Tr. 2842-2843, 2846-2850, 2868-2871, 2875, 2897-2898, 2899-2900, 2909-2912, 2932-2934, 2952-2958, 2983- 2985, 3205-3208, 10414-10415, 10432, 10436, G.C. Ex. BC 174, 809, HR 75-76, 79, 80, 522, 524, 601.4, 601.6, 601.12, 601.13, 601.19, 601.20, 602.5, 602.6, 602.10, 614, 644, 650, 813 (Chicago); Tr. 2114- 2115, 2126-2131, 2135-2137, 2179-2180, 2192, G.C. HR 78, 374, 375, 378, 382 (Indianapolis); Tr. 3498-3502, 3528-3530, 3538-3540, 3541- 3547, 3557-3560, G.C. Ex. HR 302, 310, 316, 318, 319, 319.1, 319.2, 327, 358, (Sacramento); Tr. 4143, 12360-12364, 12933-12938, 12955- 12960, 12962, G.C. Ex. BC 1159, HR 527, 529, 530, 546, 899-902, 909, 910, 912 (Los Angeles). 47 See, e.g., Tr. 4028-4033, 6492-6493, 6577-6579, 6623-6627, 6628- 6629, 6633-6634, 6650-6652, 6698-6699, 6723-6726, 6805-6806, 9740- 9743, 10618-10619, 11794-11795, 11831-11835, 11852-11853, 11856, 11859-11860, G.C. Ex. BC 92, 1385 (p. 16-24, 65-67, 73-74, 88-92), 1386 (p. 13-14), 1813, HR 172, 190-192, 519, 542, 716, 726, 767, 799 (New York); Tr. 1890-1894, 4057-4060; Tr. 3864-3867, 3882-3883, 3886-3888, 3902-3904, 6777-6779, G.C. Ex. HR 152, 404, 406, 410, 455 (Philadelphia); Tr. 2788-2790, 2795, 2846-2850, 2903-2905, 2952-2958, 2970-2975, 9421, 10407-10414, 10904-10905, 13159-13163, 13174, 11386-11390, G.C. Ex. BC 172, 173, HR 75, 522, 524, 601.6, 602.10, 602.14, 641, 1102, 1106, 1646, (Chicago); Tr. 2088, 2095, 2115-2118, MCDONALD’S USA, LLC 37 franchisee locations affected by or anticipating Fight for $15 ac- tivities.48 General Counsel has introduced evidence regarding legal training, organized by McDonald’s, provided by attorneys to franchise owners and managers at franchise owner-operator organizations, which specifically addressed labor relations is- sues.49 General Counsel has also introduced evidence regarding McDonald’s involvement in the retention of labor consultants by Franchisee Respondents.50 General Counsel has further intro- duced e-mails and text messages illustrating communications in- volving McDonald’s corporate-level executives, Regional-level staff and Franchisee Respondent personnel regarding Fight for $15 campaign activities.51 Some of these communications spe- cifically involve alleged discriminatees and activities pertinent to the violations of the Act alleged in the Consolidated Com- plaint.52 Others involve the unfair labor practice charges filed in this case.53 Finally, General Counsel has introduced evidence regarding McDonald’s involvement in No Solicitation and No Loitering policies for use by its franchisees, including the Fran- chisee Respondents.54 McDonald’s for its part has never denied that it provided as- sistance to the Franchisee Respondents in connection with the Fight for $15 campaign. See, e.g., Tr. 1008-1011 (McDonald’s Opening Statement). Instead, McDonald’s has countered that it was compelled to do so in order to fend off an attack on its brand, and that whatever resources it provided were made available to 2128-2131, 2135-2138, 2179-2180, 2192, G.C. Ex. HR 366, 371, 375, 378, 379, 382 (Indianapolis); Tr. 3498-3502, 3518, 3521-3526, 3528- 3536, 3538-3540, 3541-3545, 3547-3549, G.C. Ex. HR 302, 306-308, 310-314, 316, 318, 397, 320 (Sacramento); Tr. 7094, 12933-12939, 12955-12960, G.C. Ex. HR 527, 531, 899-903, 909, 910, Q 5671., 567.2 (Los Angeles). 48 See, e.g. Tr. 1622, 1628, 6645-6646, 6657-6662, 6665-6666, 6700- 6701, 6722-6723, 6276, 6762-6763, 6766-6767, 9740-9743, 10614- 10618, 10620-10621, 101628-101629, 10631-10648, 11017-11018, 11724-11725, 11743-11745, 11749-11750, 11772-11777, 117781, 11782-11787, 11856, 11866-11867, 12199-12200, 12203-12204, 12216, 12223-12225, 12266-12267, G.C. Ex. BC 92, 1339, 1341, 1379, 1381, 1385 (p. 73-74, 104), 1815, 1816, 1819, 1820, 1821, 1848 (p. 16, 19-22, 26-31, 34) 2214, 2311 (p. 21), 2312 (64-76), HR 142, 177, 222, 234, 235, 237, 238, 727, 728, 731 (New York); Tr. 6766-6767, G.C. Ex. HR 239 (Philadelphia); Tr. 2822-2826, 2985, 9910-9913, 10436, 11389-11390, 13159-13163, G.C. Ex. BC 1106, HR 652, 812 (Chicago); Tr. 8648-8650 (Indianapolis); Tr. 12955-12959, G.C. Ex. 909 (Los Angeles). 49 See, e.g., Tr. 1863, 1866-1868, 6565-6569; G.C. Ex. HR 94, 94.1, 204, 369, 526, 528, 550; Tr. 12677-12678, 15296-15298, 16701-16702, G.C. Ex. HR 800.2 (New York); Tr. 3007-3009, 3018-3020, 3046-3047, 3049-3055, 3064-3068, 3071, 3120-3130, 3138-3139, 3145, 10415- 10417, 10437, 12936-12937, G.C. Ex. BC 176, HR 605.1, 605.2, 605.3, 605.4, 605.5, 608.1, 642, 649, 654, 655, 825, (Chicago); Tr. 2104-2017, 2011-2014, 2164-2165, 2285-2288, G.C. Ex. HR 369, 370, 394 (Indian- apolis); Tr. 3508, 3514-3515, 3518-3521, 3523-3526, 3536, 3549-4550, 10466, G.C. Ex. HR 303, 304, 304.1-304.4, 305-307, 321, 395, 396, 846 (Sacramento); Tr. 4065, 13001-13002, 13004, 13331-13333, G.C. Ex. BC 1950, HR 526 (Los Angeles). General Counsel also introduced evi- dence that McDonald’s established hotlines for questions from personnel at both franchisees and McDonald’s-owned restaurants. Tr. 1880-1882, 1935-1936, 2179-2180, 2913-2915, 6789-6790; G.C. Ex. HR 74, 83, 753, 382. 50 See, e.g.,Tr. 12517-12518; Tr. 6763-6766, G.C. Ex. HR 720 (New York); Tr. 4105-4108, G.C. Ex. HR 531 (Los Angeles). franchisees on a voluntary, as opposed to mandatory, basis. Id.; see also McDonald’s USA, LLC, 363 NLRB No. 144, p. 1-2, 9- 11. McDonald’s even retained a potential expert witness to elu- cidate its “brand attack” theory, and engaged in extensive motion practice regarding the parameters of the expert witness’ testi- mony, as discussed in the procedural history above. As the foregoing illustrates, while the Consolidated Com- plaint did not allege unlawful conduct on the part of McDon- ald’s, for three years General Counsel construed McDonald’s as formulating a coherent strategy and coordinating the Franchisee Respondents’ activities in connection with the Fight for $15 campaign. Furthermore, General Counsel introduced a signifi- cant quantum of evidence intended to substantiate that conten- tion, and to establish pursuant to Capitol EMI Music that McDonald’s and the Franchisee Respondents “perceive[d] a mu- tual interest in warding off union representation” of employees at the Franchisee Respondent locations. Thus, the instant case is in this respect materially distinguishable from UPMC, where the putative single employer was a mere “bystander” to the al- leged violations. 3. The Inherent Risks of Litigation and the Stage of the Litigation The second component of the Independent Stave analysis also requires a consideration of the inherent risks of litigation and the 51 See, e.g., Tr. 6502-6504, 11751-11753, 11755-11756, 11782- 11785, 11863, 12251-12252, 12258-12261, G.C. Ex. BC 1301, 1341, 1385 (p. 98), 2312 (p. 44-45, 49-50), HR 291, 518 (New York); Tr. 2826-2834, 2842-2843, 2851-2853, 2877-2879, 2905-2908, 2932-2934, 2950-2951, 2975-2977, 10414-10415, 11656-11661, 12203-12204, 12208, 12216, 13178, G.C. Ex. BC 174, 1669, 2214, 2215, HR 601.1, 601.4, 601.8, 601.14, 601.15, 602.6, 602.9, 602.15, 646, McDonald’s Ex. 44 (p. 8-11, 17-19) (Chicago); Tr. 13327-13329, 13334-13336, 12360- 12364, 12366-12367, 12370, G.C. BC 1159, 1161, 1898 (p. 5-7), 1948, 1949 (Los Angeles). See also materials cited at footnotes 45 to 48, supra. 52 See, e.g., Tr. 1883-1885; G.C. Ex. HR 90 (alleged discriminatee Linda Archer, New York); Tr. 6611-6615, 11849-11851, 11853, G.C. Ex. BC 1385 (p. 59-63), HR 184 (alleged discriminatee Jose Carillo, New York); Tr. 2843-2846, 2900-2903, 7592, 10432, 11946, 11949- 11951, 11955, G.C. Ex. BC 825, 1865, p. 12, 14, 16, HR 601.5, 601.21, 808 (alleged discriminatee Tyree Johnson, Chicago); Tr. 11946, 11951- 11953, 11955, G.C. Ex. BC 1865 (p. 17, 19-21) (alleged discriminatee Victor Guzman, Chicago); Tr. 12364-12366, 12370-12375, 12378- 12379, G.C. Ex. BC 1160, 1162, 1164 (alleged discriminatee Bartolome Perez, Los Angeles); Tr. 12370-12375, 12378-12379, G.C. Ex. BC 1162, 1164 (alleged discriminatees Vincent Delgado, Rudy Interiano, and Eric Ramirez, Los Angeles). 53 See, e.g., Tr. 6630-6631, G.C. Ex. HR 211 (New York); Tr. 6763- 6766, G.C. Ex. HR 720 (Philadelphia); Tr. 10437, G.C. HR 829; 4108- 4111, 4115-4119, G.C. Ex. HR 532, 545 (Los Angeles). 54 See, e.g., Tr. 5656-6569, 6650-6652, 9696-9697. 9740-9743, 10618-10619, 10629, 11738-11742, 11864, G.C. Ex. BC 78, 92, 1240, 1349, 1385 (p. 99), 1813, HR 191, 203, 517 (New York); Tr. 3796-3797, 3889-3891, 3898, G.C. Ex. HR 408, 438 (Philadelphia); Tr. 2909-2912, 3205-3208, 10437, 13174, G.C. Ex. HR 614, 644, 820, 1646, (Chicago); Tr. 7105-7106, 12360-12364, 12934-12938, 13004-13005, G.C. Ex. BC 1159, HR 541, 900-902, 936, Q 571, 571.1 (Los Angeles). In his Open- ing Statement, General Counsel contended that McDonald’s “directs” the Franchisee Respondents to display its “Nine in One” poster, “which itself incorporates McDonald’s no solicitation policy in every crew room.” Tr. 962. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 38 stage of the litigation, in the specific context of the case at issue. For the following reasons, these factors weigh here against a finding that the proposed Settlement Agreements are reasonable. In the instant case, the parties’ protracted presentations on the joint employer issue are nearly complete, with McDonald’s hav- ing two additional witnesses to present on its direct case and General Counsel intending to submit documentary evidence as rebuttal.55 Furthermore, as discussed above, General Counsel presented 52 witnesses primarily addressing the joint employer issue over a ten month period. These witnesses testified for 78 days, and were presented by seven attorneys for General Coun- sel.56 McDonald’s presented 15 witnesses who testified for 14 days. These case presentations comprise the bulk of the largest case ever adjudicated by this agency, and the longest hearing the agency has ever conducted. Furthermore, the case required fed- eral court litigation in six different venues and substantial work by an appointed Special Master, all of which has been com- pleted. Thus, the current posture of this case is completely dif- ferent from the stage of the litigation in UPMC at the time that the Board approved the proposed resolution of the single em- ployer issue. In UPMC, the parties had not yet begun presenting their evidence regarding the parties’ single employer status. 365 NLRB No. 153 at p. 2, 23. In addition, the subpoena enforce- ment issues which remained pending at the Third Circuit in UPMC and precipitated the bifurcation of that case have been fully litigated and resolved here, as discussed in the procedural history above. Thus, approval of the Settlement Agreement at this time would not conserve the significant agency resources expended over the course of three years to create a record on the joint employer issue, as was the case in UPMC. And while there would certainly be exceptions and appeals available in this mat- ter, the work involved would in my judgment be less onerous and demand fewer resources than the lengthy, arduous trial presenta- tion necessary to create the record thus far.57 In addition, General Counsel’s decision to pursue a settle- ment, and accept the Settlement Agreements discussed above, literally days before the close of the monumental record in this case is simply baffling. Specifically, General Counsel’s decision to settle the case in the manner discussed above without hearing the testimony of McDonald’s expert, Professor Chekitan S. Dev, is incomprehensible. Since the Petitions to Revoke Subpoenas filed in 2015, McDonald’s has repeatedly argued that its “brand protection” prerogative precluded consideration of its activities and resources provided to the Franchisee Respondents regarding the Fight for $15 campaign in the context of the joint employer issue. As is apparent from the preceding discussion, General Counsel adduced a veritable deluge of evidence regarding McDonald’s response to the Fight for $15 campaign, some of 55 Respondents have made statements on the record to the effect that they have the right to present sur-rebuttal evidence. It is well-settled that proper sur-rebuttal evidence is evidence which explains, counteracts, or disproves the adverse party’s evidence, and that cumulative evidence is not admissible. The admissibility of evidence on rebuttal and sur-rebut- tal is within the discretion of the Administrative Law Judge. Garden Ridge Management, 347 NLRB 131, fn. 4 (2006); Water’s Edge, 293 NLRB 465, fn. 2 (1989), enf. granted and denied in part on other grounds, 14 F.3d 811 (2nd Cir.1994); see also Bethlehem Temple Learn- ing Center, 330 NLRB 1177, fn. 1 (2000). In any event, Respondents which implicates the Franchisee Respondents’ conduct and di- rectly involves the alleged discriminatees in this case. McDon- ald’s fact witnesses on its direct case largely did not testify re- garding the issue. The testimony of Professor Dev would there- fore have been critical, if only to assess the relative strength of the parties’ cases for the purpose of settlement negotiations. Yet General Counsel chose to forego hearing such significant testi- mony, and instead entered into the Settlement Agreements, which, as discussed previously, provide relief that largely could have been obtained in 2015. Furthermore, when questioned about this aspect of his decision on April 5, 2018, General Coun- sel provided no meaningful response. He only reiterated that set- tling the case at this juncture obviated the necessity of further proceedings – a statement that is true of any settlement at any time prior to a final judgment. Tr. 21258. General Counsel’s machinations involving the Browning-Fer- ris Industries of California, Inc., 362 NLRB No. 186 (2015), and Hy-Brand Industrial Contractors, Ltd., 365 NLRB No. 156 (2017), decisions are equally perplexing. As discussed in further detail above, the Consolidated Complaints in this matter were issued on December 19, 2014, and were themselves consolidated by order of January 6, 2015. At that time, Browning-Ferris had not yet been decided, and the previously existing standard for determining joint employer status applied. Therefore, General Counsel anticipated proving that McDonald’s constituted a joint employer with the Franchisee Respondents under the pre- Browning-Ferris standard in effect at the time that the case was initiated. The various Petitions to Revoke Subpoenas were also decided in March and April 2015, before Browning-Ferris was decided. On August 27, 2015, the Board issued the Browning- Ferris decision. Thus, General Counsel was no longer required to prove McDonald’s actual exercise, as opposed to possession, of authority over terms and conditions of employment at the Franchisee Respondent locations, and was no longer required to demonstrate McDonald’s “direct and immediate control” over the over the work of employees at Franchisee Respondent loca- tions in order to establish joint employer status. Browning-Fer- ris Industries of California, Inc., 362 NLRB No. 186 at p. 1-2. The Board’s revision of the legal standard for joint employer sta- tus in Browning-Ferris may therefore have strengthened General Counsel’s case. But because General Counsel issued the Con- solidated Complaint prior to Browning-Ferris, that decision could not possibly have been a necessary precondition for Gen- eral Counsel’s initiating the instant litigation. On December 14, 2017, the Board issued its decision in Hy- Brand Industrial Contractors, Ltd., overruling Browning-Ferris and returning “to the principles governing joint employer status that existed prior to that decision” – the legal standard applicable have never indicated that they intend to present sur-rebuttal evidence in any form. 56 Other witnesses called in connection with the unfair labor practice allegations against the New York Franchisees and Jo-Dan also testified regarding issues pertinent to joint employer status. 57 McDonald’s asserts that Post-Hearing Briefs on the merits of the case would not be submitted until after my ruling on the deferred objec- tions. Post-Hearing Brief at 7, 19-20. I have never made any ruling in this case that deferred objections will be submitted and decided prior to the submission of Post-Hearing Briefs on the merits. MCDONALD’S USA, LLC 39 when General Counsel issued the Consolidated Complaint herein. 365 NLRB No. 156, at p. 2. General Counsel neverthe- less asserted that he was requesting a stay of the hearing on Jan- uary 17, 2018, five days before it was set to resume, to evaluate the impact of the Hy-Brand Industrial Contractors, Ltd. deci- sion, even though that opinion purported to simply return to the joint employer analysis upon which General Counsel had based this case. Then, as discussed above, during the stay the Board vacated its decision in Hy-Brand Industrial Contractors, Ltd., reinstating the Browning-Ferris standard which would presuma- bly be more advantageous to General Counsel. 366 NLRB No. 26 (February 26, 2018). However, General Counsel continued to pursue the settlement of this case, and had no adequate expla- nation when questioned on April 5, 2018 regarding the rationale for this course of action. He simply reiterated that continuing the instant case “would exhaust agency resources,” and that “this settlement provides immediate relief for affected workers.” Tr. 21256-21257. This last is a meaningful consideration, for the Settlement Agreements provide for full back pay for the 20 alleged discrim- inatees, and even front pay for the three employees – Tracee Nash, Sean Caldwell, and Quanisha Dupree – who were alleg- edly unlawfully discharged. Yet General Counsel’s stated pur- pose in initiating this case was obtaining “a finding that McDon- ald’s USA, LLC was jointly and severally liable for all of the alleged unfair labor practices…because of its status as a Joint Employer of the affected workers,” and “to clarify the relation- ship between franchisor and franchisee” in the context of Board law regarding joint employer status. Tr. 21254. As is evident from the procedural history and the above discussion, the vast majority of the evidence and the hearing presentation was di- rected to the joint employer issue. In addition, the overwhelming majority of the multitudes of unfair labor practices alleged in- volved either statements or policies and practices designed to in- hibit the exercise of Section 7 rights by employees at the Fran- chisee Respondent locations, as opposed to actual retaliation against specific individuals precipitating an individual remedy. Thus, while approval of the Settlement Agreements would result in immediate relief for the alleged discriminatees, the remainder of the proposed settlement is paltry and ineffective given the scope of the allegations, the resources necessary in order to pre- sent the case, and the case’s ultimate purpose. The effect of the uncertainty inherent in future litigation on the relief the alleged discriminatees would obtain through the proposed settlement is therefore not a compelling counterweight. For all of the foregoing reasons, I find that the stage of this enormous case strongly militates in favor of expending the sev- eral days of trial time required to complete the record, and there- after continuing with the decisional and appeals process, despite the inherent uncertainties of litigation. C. Fraud, Duress and Coercion, and Any History of Prior Vio- lations The third component of the Independent Stave analysis re- quires a consideration of whether there has been any fraud, co- ercion, or duress by any of the parties in reaching the settlement. There is no contention or evidence of fraud, coercion, or duress here, and this factor therefore weighs in favor of approval. The fourth of the Independent Stave criteria requires an eval- uation of whether the respondent has engaged in a history of vi- olations of the Act or has breached previous settlement agree- ments resolving unfair labor practice disputes. The record does not establish such a history in this case. Although, as discussed above, there were other cases settled by certain owner-operators whose Franchisee Respondents are also Charged Parties here, cases where the Board finds a history of violations in the context of an Independent Stave analysis typically involve previous de- cisions finding violations. See, e.g., Goya Foods of Florida, 358 NLRB 345, 347, n. 15 (2012); Webco Industries, 334 NLRB 608, 611 (2001), enf’d. 90 Fed.Appx. 276 (10th Cir. 2003). There- fore, the fourth component of the Independent Stave analysis weighs in favor of approving the proposed settlement. D. Conclusion For all of the foregoing reasons, I find that the first of the In- dependent Stave criteria does not favor approval of the proposed settlements, and that the second factor militates strongly against approval. The third and fourth factors weigh in favor of ap- proval. Given the size and import of this case, the resources ex- pended in the hearing presentations, the terms of the proposed settlement, and the distinct possibility of additional litigation, I find overall that approval of the Settlement Agreements is not warranted pursuant the Independent Stave criteria. Based on the foregoing, it is hereby ordered as follows: 1. General Counsel and McDonald’s Motion to Approve Set- tlement Agreements in the above matter is denied. 2. In the event that no party files a Request for Special Per- mission to Appeal this Order within 28 days, the parties shall schedule 12 additional days of hearing in October 2018. If addi- tional hearing days are scheduled, General Counsel shall make the necessary arrangements to have the hearing continue at 26 Federal Plaza, Courtroom 238, New York, New York. Dated, July 17, 2018