NLRB - Politico

NOTICE: This opinion is subject to formal revision before publication in the bound volumes of NLRB decisions. Readers are requested to notify the Executive 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 Employees International Union, CTW, CLC, et al. Cases 02–CA–093893, et al. 04–CA–125567, et al. 13–CA–106490, et al. 20–CA–132103, et al. 25– CA–114819, et al. 31–CA–127447, et al. March 17, 2016 ORDER1 BY CHAIRMAN PEARCE AND MEMBERS MISCIMARRA AND H IROZAWA During the course of this proceeding, in which the first witness has yet to be called, Respondent McDonald’s USA, LLC (McDonald’s) has filed seven separate requests for special permission to appeal procedural rulings of Administrative Law Judge Lauren Esposito, not including its additional requests to supplement requests that it had already filed with the Board or the requests filed by the Respondent Franchisees. Each of those requests on which the Board has ruled has been granted, and the appeals have been heard on their merits. To date, none of the appeals has been meritorious. In the instant application, McDonald’s requests special permission to appeal the following orders: (1) the April 9, 2015 Order Granting and Denying in Part the Petitions to Revoke McDonald’s USA, LLC’s Subpoenas Duces Tecum Served Upon the Charging Parties and Kendall Fells; (2) the April 9, 2015 Order Granting the Petitions to Revoke McDonald’s USA, LLC’s Subpoenas Duces Tecum Served Upon Mintz Group, LLC, LR Hodges & Associates LTD., Berlin Rosen, LTD., and New York Communities for Change, Inc.; and (3) the April 15, 2015 Order Granting Hart Research Associates’ Petition to Revoke McDonald’s USA, LLC’s Subpoenas Duces Tecum. McDonald’s request for special permission to appeal is granted. On the merits, the appeal is denied. The Consolidated Complaint in this matter alleges that McDonald’s and Respondent Franchisees are joint employers of the employees nominally employed by Respondent Franchisees. In support of this allegation, the General Counsel alleges, inter alia, that McDonald’s coordinated or directed the conduct of Respondent Franchisees in response to employees’ protected and union activities in a manner which tends to prove that McDonald’s shares or codetermines those matters governing the essential terms and conditions of employment, or that 1 The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel.

363 NLRB No. 144

McDonald’s meaningfully affects employment issues at Respondent Franchisees’ locations. McDonald’s states that it will present at least two defenses to this allegation, namely: (1) a factual defense that it did not direct Respondent Franchisees’ response to employees’ protected and union activities; and (2) a legal defense that the campaign undertaken by Service Employees International Union (SEIU) and the other Charging Parties is not properly viewed as traditional organizing but rather constitutes an attack on the McDonald’s brand and public goodwill, and that any conduct by McDonald’s in response to this attack is an act of “brand protection” that cannot be used as evidence to support a joint employer finding (the brand protection defense). McDonald’s contends that the subpoenaed documents are relevant to this second defense. The judge found that McDonald’s failed to establish the relevance of most of the subpoenaed documents. Specifically, the judge found that the motive behind the Charging Parties’ campaign is not relevant to the analysis of whether McDonald’s is a joint employer with Respondent Franchisees. The judge also rejected McDonald’s contention that evidence of SEIU’s and the other Charging Parties’ motives was relevant to its brand protection defense. The judge’s Order pertaining to the subpoenas served on the Charging Parties does, however, require SEIU and the other Charging Parties to provide documents that could have informed McDonald’s or the Respondent Franchisees’ perception of the Charging Parties’ campaign and the public activities of employees in connection with the campaign. McDonald’s appeals from all three of the judge’s Orders, arguing that the Orders preclude it from adducing evidence crucial to its brand protection defense. We find that McDonald’s has failed to establish that the judge abused her discretion in granting and partially granting the petitions to revoke. Specifically, we agree with the judge that evidence of SEIU’s and the other Charging Parties’ motives regarding their campaign is not relevant to determining whether McDonald’s and Respondent Franchisees share or codetermine those matters governing the essential terms and conditions of employment. Thus, we find that it was not an abuse of the judge’s discretion for her to determine that McDonald’s has failed to establish that the motive of SEIU and the other Charging Parties is relevant to its brand protection defense. The premise underlying McDonald’s proposed brand protection defense is that it took certain actions to protect its brand in response to what it reasonably perceived was an attack on its brand, and that, as such, those actions should be excluded from an analysis of whether it was a joint employer with Respondent Franchisees. In

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DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD

this analysis, McDonald’s motivation is relevant, but the actual motive of SEIU and the other Charging Parties is not. The reasonableness of McDonald’s perception is based in part on what McDonald’s knew about the Charging Parties’ campaign. The judge’s April 9 Order Granting and Denying in Part the Petitions To Revoke requires SEIU and the other Charging Parties to produce documents that could have provided McDonald’s and Respondent Franchisees with information about the Charging Parties’ campaign and employees’ activities in connection with that campaign. These documents, showing the public actions of SEIU and the other Charging Parties, are potentially relevant to McDonald’s defense;2 the remaining subpoenaed documents are not. The judge did not abuse her discretion in ruling that the majority of the subpoenaed documents were irrelevant, and the contention by McDonald’s and our dissenting colleague that the judge’s Orders preclude McDonald’s from obtaining relevant documents that may support its “brand protection” defense is without merit. Dated, Washington, D.C. March 17, 2016 ______________________________________ Mark Gaston Pearce, Chairman

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Contrary to the dissent, this is not an “inconsequential” exception to the judge’s grant of the petitions to revoke. In issuing this Order, we are not passing on the merits of McDonald’s “brand protection” defense, and we do not address the dissent’s discussion of prior Board decisions, such as Love’s Barbeque Restaurant No. 62, 245 NLRB 78 (1979), enfd. in rel. part sub nom. Kallmann v. NLRB, 640 F.2d 1094 (9th Cir. 1981), and S. G. Tilden, Inc., 172 NLRB 752 (1968). The dissent is incorrect in asserting that the judge’s Orders reject McDonald’s brand protection defense on the merits and suggesting that it is futile for McDonald’s to litigate this defense. Nothing in this Order, or in the judge’s Orders, prevents McDonald’s from presenting its brand protection defense based on its perception of the Charging Parties’ campaign. We further find that the judge did not abuse her discretion in granting the petitions to revoke McDonald’s subpoenas served on Mintz Group, LLC, LR Hodges & Associates LTD., Berlin Rosen, LTD., New York Communities for Change, Inc., and Hart Research Associates because they were cumulative and duplicative and therefore imposed an undue burden on non-parties. We find it unnecessary to pass on whether the judge correctly found that certain of the subpoenaed documents were also subject to the work product privilege. Finally, we observe that the dissent contains substantive legal errors, such as its treatment of joint employer status and joint employer liability as interchangeable concepts, when in fact they are crucially different, and its discussion of the basics of issuance, revocation and enforcement of Board subpoenas. Because they are not necessary to the result in this appeal, we need not address them.

______________________________________ Kent Y. Hirozawa, Member (SEAL)

NATIONAL LABOR RELATIONS BOARD

MEMBER MISCIMARRA, dissenting in part. This case involves whether McDonald’s USA, LLC (McDonald’s) is a joint employer liable for unfair labor practices (ULPs) allegedly committed by 30 franchisee employers.1 Although McDonald’s is not alleged to have committed any ULPs, the unusual structure of this massive consolidated case—which originated as 61 unfair labor practice charges filed in six NLRB Regions alleging 181 ULPs attributed to the 31 separate respondents— is based on the allegation that McDonald’s has jointemployer liability. At this point, none of the alleged violations is before the Board on the merits. However, the Board has previously decided the merits of five special appeals regarding procedural issues in this case. 2 Currently pending is whether McDonald’s may enforce certain requests contained in subpoenas seeking documents from certain parties and non-parties.3 My 1 The respondents include 30 franchisee-respondents who own or operate a McDonald’s restaurant, plus McDonald’s Restaurants of Illinois, Inc. (which is not alleged to be a franchisee of McDonald’s, nor is McDonald’s alleged to be a joint employer of McDonald’s Restaurants of Illinois, Inc.’s employees). Each of these separate respondents is distinct and has no operational interchange with other respondents. In this opinion, “separate respondents” refers to the 30 franchisees plus McDonald’s Restaurants of Illinois, Inc. (the 31 respondents alleged to have committed ULPs). 2 See Lewis Foods of 42nd Street, LLC, 362 NLRB No. 132 (2015) (finding that the judge properly denied McDonald’s request to have a transcript of a telephonic conference addressing scheduling and production of documents subpoenaed by the General Counsel); McDonald’s USA, LLC, 362 NLRB No. 168 (2015) (finding that judge properly denied McDonald’s motion for a bill of particulars regarding General Counsel’s alternative theory of joint-employer status, about which the consolidated complaints are silent); McDonald’s USA, LLC, 363 NLRB No. 91 (2016) (finding that judge properly denied motions filed by McDonald’s and New York franchisees to sever consolidated cases based on alleged prejudice to the respondents and the alleged denial of due process); McDonald’s USA, LLC, 363 NLRB No. 92 (2016) (denying appeals by McDonald’s and New York franchisees challenging Case Management Order based on objections to the structure of multiple-city hearings and the order in which evidence must be presented). I dissented from these decisions (as did Member Johnson in the two decisions in which he participated). In addition, in an unpublished Order issued on April 21, 2015, the Board denied McDonald’s USA, LLC’s request and supplemental request for special permission to appeal the February 9, 2015 Order of Administrative Law Judge Lauren Esposito denying its Request for Reconsideration Regarding Transcription of Conference Call. I was not on the panel that decided that matter. Other requests and appeals remain pending before the Board. 3 Strictly speaking, the Board does not “enforce” subpoenas. Subpoena recipients challenge subpoena requests by filing a petition to revoke the subpoena. See NLRA Sec. 11(1); Board’s Rules and Regulations Sec. 102.31(b). Therefore, denying a petition to revoke effec-

MCDONALD’S USA, LLC

colleagues, like the judge, rule that the Board will not enforce the disputed subpoena requests (with only inconsequential exceptions). In two respects, I believe these decisions by my colleagues and the judge are contrary to our statute and the Board’s Rules and Regulations and do violence to basic principles of fairness. First, these rulings improperly preclude McDonald’s from obtaining documents that may support a McDonald’s defense against joint-employer liability, and the joint-employer liability issue is the reason we have 32 respondents in this enormous consolidated proceeding. At this point, the Board is not deciding whether McDonald’s and the franchisee respondents will be successful in defending against joint-employer liability. However, especially considering the liberal standards applicable to Board subpoenas, I believe these McDonald’s subpoena requests warrant enforcement because the evidence sought by McDonald’s—documents allegedly showing that the SEIU and other groups conducted a centralized assault against the McDonald’s brand—is relevant to McDonald’s “brand protection” defense against jointemployer liability, and the “brand protection” defense clearly has some support in existing Board law. Second, the judge’s orders go substantially beyond merely denying enforcement of the disputed subpoena requests. The judge appears to have prematurely rejected McDonald’s “brand protection” defense on the merits. Thus, the judge’s orders describe the defense as “convoluted” (among other things), which improperly suggests tively requires parties to comply with the subpoena; granting a petition to revoke effectively denies enforcement to the subpoena; and an appeal from a decision granting a petition to revoke—which is what we are dealing with here—seeks to require compliance with the subpoena. To avoid these double or triple negatives, I use the term enforce as a shorthand reference. In any event, McDonald’s here appeals from the judge’s decisions granting petitions to revoke filed by various parties and non-parties, and McDonald’s asks the Board to require subpoena recipients to comply with the disputed subpoena requests. The petitions to revoke were filed by the Service Employees International Union (SEIU), the Fast Food Workers Committee, the Pennsylvania Workers Organizing Committee, a project of the Fast Food Workers Committee, the Workers Organizing Committee of Chicago, the Los Angeles Organizing Committee, and the Western Workers Organizing Committee (collectively, the Workers Committees), all of which are parties. Petitions to revoke were also filed by several non-parties: Hart Research Associates (Hart Research), the Mintz Group, LLC (Mintz Group), LR Hodges & Associates, Ltd. (LR Hodges), Berlin Rosen, Ltd. (Berlin Rosen), and the New York Communities for Change (NYCC). Although the judge revoked virtually all McDonald’s subpoena requests relevant to McDonald’s “brand protection” defense, the judge required production of some documents. In essence, however, the judge’s order would permit McDonald’s to obtain information it would already be likely to have. See fn. 24, infra. Obviously, the purpose of a subpoena is to obtain relevant documents or information not otherwise available to the party issuing the subpoena.

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it is futile for McDonald’s even to litigate this defense. I strongly disagree with this type of summary disposition of a central issue in this case. Currently before the Board is whether McDonald’s should be permitted to seek relevant evidence in support of this defense. Only after the hearing’s conclusion, based on a completed record, could this defense be appropriately evaluated on the merits by the judge or the Board.4 I agree with some of the judge’s subpoena rulings and therefore concur with my colleagues’ finding that the judge properly revoked certain subpoena requests.5 However, as described more fully below, I respectfully dissent from the conclusion that McDonald’s cannot enforce the subpoena requests that relate to McDonald’s “brand protection” defense. BACKGROUND The Board has never previously permitted a case like this one, which resulted from consolidating alreadyconsolidated cases that were investigated by six NLRB regional offices involving 61 separate charges and 181 alleged violations, with each violation being attributed to only one of the 31 separate respondents.6 All the respondents have been made parties to this megaconsolidated proceeding because the General Counsel seeks to establish that McDonald’s—which is not alleged to have committed any violations of the Act—has joint4 Under Section 102.24 of the Board’s Rules and Regulations, the Board may grant a motion for summary judgment (or issue a notice to show cause why summary judgment should not be granted) when there is “no genuine issue as to any material fact.” See, e.g., L’Hoist North America of Tennessee, Inc., 362 NLRB No. 110, slip op. at 1 (2015) (Member Miscimarra, concurring) (citations omitted). In the instant case, there appears to be little doubt that disputed questions of material fact exist regarding McDonald’s “brand protection” defense, and such questions would preclude summary disposition without a hearing. Id. 5 I agree with my colleagues that the judge did not abuse her discretion in granting the petition to revoke the subpoena served on SEIU employee Kendall Fells on the basis that the subpoena was cumulative and duplicative. I also agree that the judge did not abuse her discretion in granting the petitions to revoke McDonald’s subpoena requests served on non-parties Mintz Group, LR Hodges, Berlin Rosen, NYCC, and Hart Research because the requests were cumulative and duplicative and therefore placed an undue burden on the non-parties. I find it unnecessary to pass on whether the judge correctly found that certain of the documents subpoenaed from the non-parties were also subject to the work-product privilege. 6 As stated above, the litigation started as 61 separate charges filed in six NLRB Regions against 31 respondents. The General Counsel issued six consolidated complaints, each complaint consolidating multiple cases: 17 cases in Region 2; 3 in Region 4; 22 in Region 13; 4 in Region 20; 4 in Region 25; and 11 in Region 31. The consolidated complaints were then transferred to Region 2, and the General Counsel further consolidated the already-consolidated complaints into a meta- or mega-consolidation. See McDonald’s USA, LLC, 363 NLRB No. 91, slip op. at 2–3 (2016) (Member Miscimarra, dissenting).

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employer liability for whatever ULPs were committed by the 30 franchisee respondents.7 One other preliminary point warrants brief mention. Everyone—including the Board—is operating at a disadvantage when attempting to discern the General Counsel’s theories of joint-employer liability. The complaint contains only the most general allegations regarding alleged joint-employer status. We do not have more details about the basis for McDonald’s alleged jointemployer liability because the judge and a divided Board previously denied a motion filed by McDonald’s seeking this precise information.8 However, the General Counsel has indicated that he seeks to establish joint-employer liability based on at least two different sets of jointemployer principles argued in the alternative. One involves the Board’s traditional joint-employer test,9 and another is based on substantially different joint-employer principles that the Board recently adopted in BFI Newby Island Recyclery (Browning-Ferris Industries).10 In all cases, the determination of disputed questions should be governed by our statute, the Board’s Rules and Regulations, an objective appraisal of Board case law and basic principles of fairness. In my view, these latest decisions by the judge and my colleagues are inconsistent with each of these standards. 7 The diverse claims and parties have been consolidated into this proceeding because the General Counsel has indicated that he intends to prove that McDonald’s should have joint-employer liability for whatever ULPs were committed by the franchisee respondents. See McDonald’s USA, LLC, 363 NLRB No. 91, slip op. at 5 (Member Miscimarra, dissenting). The joint-employer issue is also responsible for the judge’s requirement that corporate and nationwide jointemployer evidence be introduced, at least by the General Counsel and the Charging Parties, before the introduction of any evidence regarding alleged violations of the Act. See McDonald’s USA, LLC, 363 NLRB No. 92, slip op. at 2–5 (Member Miscimarra, dissenting). 8 See McDonald’s USA, LLC, 362 NLRB No. 168, slip op. at 1 (denying McDonald’s motion for a bill of particulars regarding General Counsel’s alternative theory of joint-employer status, about which the consolidated complaints are silent). 9 The Board ostensibly applied its traditional joint-employer principles in CNN America, Inc., 361 NLRB No. 47 (2014). Although CNN only involved three entities, two locations, and one joint-employer standard, it required 82 days of hearings, more than 1,300 exhibits, a hearing record consisting of more than 16,000 transcript pages, and 10 years of Board litigation. Id., slip op. at 29 (Member Miscimarra, concurring in part and dissenting in part). 10 362 NLRB No. 186 (2015). See McDonald’s USA, LLC, 362 NLRB No. 168, slip op. at 2 fn. 1 (Members Miscimarra and Johnson, concurring in part and dissenting in part) (noting that the General Counsel stated, at a March 24, 2015 House subcommittee hearing on the Agency’s budget for fiscal year 2016, that the General Counsel will pursue a new theory of joint-employer liability in the McDonald’s litigation, in addition to arguing, in the alternative, that joint-employer liability should be imposed under the Board’s traditional criteria).

DISCUSSION A. The “Brand Protection” Concept and the McDonald’s “Brand Protection” Defense The main issues raised by the present appeal relate to the potential role played by “brand protection” as a defense to a franchisor’s alleged joint-employer liability, which is the defense McDonald’s has indicated it intends to pursue. It is not appropriate at this juncture to determine whether the “brand protection” defense has merit. McDonald’s has a right to pursue this defense to the extent it has a good-faith relation to matters raised in the complaint. McDonald’s is likewise entitled to the enforcement of subpoena requests in support of this defense because our statute and rules provide for subpoenas that reasonably “relate to . . . any matter . . . in question.”11 This standard broadly favors the issuance and enforcement of Board subpoenas, even if they require the production of documents that merely provide background information or may potentially lead to other relevant evidence.12 McDonald’s “brand protection” defense has two components, each of which relates directly to potential jointemployer liability of McDonald’s and the franchisee respondents, which the General Counsel has positioned as the most important question in this litigation. As explained more fully below, one component of the defense involves a “brand protection” principle that has been recognized in existing Board cases. The second component involves a contention that any centralized direction or control by McDonald’s, to the extent it occurred,13 was not in response to protected employee activities but, 11 See NLRA Sec. 11(1) (“The Board . . . shall upon application of any party . . . forthwith issue to such party subpoenas requiring attendance and testimony of witnesses or the production of any evidence in such proceeding or investigation requested in such application,” and a petition to revoke shall be granted if “the evidence whose production is required does not relate to . . . any matter in question in such proceedings . . . .”); Board’s Rules and Regulations Sec. 102.31 (implementing Sec. 11(1)). 12 Board’s Rules and Regulations Sec. 102.31(b), quoted in judge’s Order Granting and Denying In Part the Petitions to Revoke McDonald’s USA, LLC’s Subpoenas Duces Tecum Served Upon the Charging Parties and Kendall Fells (Charging Parties Order), p. 2. Cf. Rule 26(b)(1) of the Federal Rules of Civil Procedure (subpoenaed information must only be “reasonably calculated to lead to the discovery of relevant evidence”). The judge issued a separate order addressing petitions to revoke McDonald’s subpoenas served on non-parties Mintz Group, LR Hodges, Berlin Rosen, and NYCC. I will refer to this order as the “Non-Parties Order.” 13 McDonald’s denies that it exercised centralized control or direction, and it asserts the “brand protection” defense in the alternative (to the extent the General Counsel proves that such centralized control or direction took place). See McDonald’s USA, LLC’s Expedited Appeal from the Administrative Law Judge’s Orders Granting Petitions to Revoke, p. 3 (dated April 24, 2015) (hereinafter “McDonald’s Expedited Appeal”).


rather, was motivated by “brand protection”—i.e., the need to counter a centralized attack against the McDonald’s brand, allegedly conducted by the SEIU and other groups. 1. Colorable Support in Board Case Law The “brand protection” defense articulated by McDonald’s invokes Board law holding that control exercised by a franchisor over its franchisees in order to protect the franchisor’s brand are not indicative of joint-employer status. In S. G. Tilden, Inc.,14 the Board found that franchisor Tilden did not have joint-employer liability with two franchisees where the control exercised by Tilden over the franchisees was no greater than necessary “to keep the quality and goodwill of the Tilden name from being eroded.”15 In Love’s Barbeque Restaurant No. 62,16 the franchisor, Love’s Enterprises, was found not to have jointemployer liability for the actions of a franchisee, Kallmann, where the franchise agreement required franchisees “to best preserve, maintain and enhance the reputation, trade name and good will built up for the franchising system,” and where Love’s Enterprises’ control over Kallmann “has been retained solely in an effort to maintain the uniformity of the integrated enterprise for the mutual benefit of [the franchisor], . . . Kallmann and the other franchisees.”17 In his amicus brief in Browning-Ferris Industries, the General Counsel stated that a franchisor’s actions limited to protecting its brand would not result in joint-employer liability. The General Counsel stated: The Board should continue to exempt franchisors from joint-employer status to the extent that their indirect control over employee working conditions is related to their legitimate interest in protecting the quality of their product or brand. . . . The “traditional standard” cases finding that franchisors were not joint employers preceded the advent of new technology that has enabled some franchisors to exercise indirect control over employee working conditions beyond what is arguably necessary to protect the quality of the product/brand.18 To the same effect, the General Counsel made public statements about this litigation alleging McDonald’s en14

172 NLRB 752 (1968). Id. at 753 (emphasis added). 16 245 NLRB 78 (1979), enfd. in rel. part sub nom. Kallmann v. NLRB, 640 F.2d 1094 (9th Cir. 1981). 17 Id. at 93, 119–120 (emphasis added). 18 Amicus Brief of the General Counsel, pp. 15–16 fn. 32 (dated June 26, 2014), filed in Browning-Ferris Industries, 32–RC–109684 (citing Love’s Barbeque, 245 NLRB at 120). 15

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gaged in actions involving more than “protection of the brand.” An NLRB “fact sheet” about the McDonald’s litigation, formerly posted on the NLRB’s web site,19 stated: Our investigation found that McDonald’s, USA, LLC, through its franchise relationship and its use of tools, 19 The NLRB “fact sheet” about the McDonald’s litigation, previously available at http://nlrb.gov/news-outreach/fact-sheets/mcdonaldsfact-sheet, has been removed from the NLRB’s web site. However, not only was the “fact sheet” quoted in the brief submitted by McDonald’s, it has been extensively quoted in numerous other reports and publications that remain available on the Internet. See, e.g., McDonald’s Expedited Appeal, p. 2 (quoting http://nlrb.gov/news-outreach/factsheets/mcdonalds-fact-sheet); “McDonald’s-Franchisee Joint Employer NLRB Hearing Begins” (http://www.managementmemo.com/2015/04/02/mcdonaldsfranchisee-joint-employer-nlrb-hearing-begins-seiu-expands-fight-forfifteen-and-other-developments/); “The NLRB’s Politically Driven McDonald’s Show Trial” (http://dailycaller.com/2015/08/20/the-nlrbspolitically-driven-mcdonalds-show-trial/); “Could NLRB Ruling Destroy the Franchise Business?” (http://smallbiztrends.com/2015/09/nlrb-ruling-joint-employer.html); “NLRB Claims McDonalds Is ‘Joint Employer’ of Franchisee Employees” (http://www.goulstonstorrs.com/NewsEvents/Advisories?find=115102) ; “NLRB Complaints Claim McDonald’s USA is ‘Joint Employer’ Liable for Labor Violations by Its Franchisees” (https://www.perkinscoie.com/en/news-insights/nlrb-complaints-claimmcdonald-s-usa-is-joint-employer-liable.html); “Fast Food News— NLRB Names McDonald’s as a ‘Joint Employer’” (http://onlabor.org/2014/12/19/fast-food-news-nlrb-names-mcdonaldsas-a-joint-employer/); “McDonald’s, Already Struggling, Now Has to Fight the Government” (http://www.economics21.org/commentary/mcdonalds-labor-unionsNLRB-SEIU-02-02-2015); “NLRB takes on McDonald’s as ‘putative joint employer’” (http://www.employmentlawdaily.com/index.php/news/nlrb-takes-onmcdonalds-as-putative-joint-employer/); “Beyond the Franchise Model: The NLRB’s Plan to Treat Franchisees and Franchisors as Joint Employers Threatens Every Business” (http://savelocalbusinesses.com/2015/02/07/beyond-franchise-modelnlrbs-plan-treat-franchisees-franchisors-joint-employers-threatensevery-business/); “A New ‘Fact Sheet’ for Franchises at the NLRB” (http://franchisingworld.com/a-new-fact-sheet-for-franchises-at-thenlrb/). The General Counsel has not renounced any statements made in the McDonald’s “fact sheet,” including those that assert that an alleged “nationwide response” by McDonald’s went “beyond protection of the brand.” To the contrary, the judge’s orders acknowledge that the “General Counsel contends here that McDonald’s coordinated or directed the Franchisee Respondents’ conduct” allegedly in “response to the employees’ activities at the Franchisee Respondents’ locations, and to other aspects of the Charging Parties’ organizing campaign.” Charging Parties Order, pp. 2–3 (emphasis added). Even if the General Counsel’s attorneys reverse position by contending that McDonald’s has joint-employer liability as a franchisor even if any “nationwide response” activities were limited to “protection of the brand,” this would be a dispute about the merits, appropriately resolved only at the conclusion of this case. Existing Board law would still provide colorable support for McDonald’s “brand protection” defense, and only the Board—not the General Counsel—can decide relevant legal issues, including whether to apply or overrule existing case law.

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resources and technology, engages in sufficient control over its franchisees’ operations, beyond protection of the brand, to make it a putative joint employer with its franchisees, sharing liability for violations of our Act. This finding is further supported by McDonald’s, USA, LLC’s nationwide response to franchise employee activities while participating in fast food worker protests to improve their wages and working conditions.20 2. The “Brand Protection” Defense and the Disputed Subpoena Requests McDonald’s indicates it intends to prove that, to the extent it provided any “nationwide” direction to franchisees, this was not a “response to franchise employee activities” but, rather, a “response” to a “nationwide” SEIU-coordinated assault on the McDonald’s brand. Here is how the “brand protection” defense is characterized in McDonald’s brief to the Board: [A]ccording to press releases, it seems that a central component of the General Counsel’s joint employment theory will center on what he contends was “McDonald’s, USA, LLC’s nationwide response” to a campaign instituted by the SEIU and its allies. To be sure, McDonald’s denies that it directed any franchisee action in response to that campaign. Nevertheless, an alternate component of McDonald’s defense will consist of a showing that the SEIU’s campaign at issue is properly viewed as an attack on the McDonald’s brand and public goodwill. McDonald’s will make this showing because, even under the General Counsel’s apparent theory of the case, there is a jointemployment exemption or safe harbor for acts taken by a franchisor to protect its brand, notwithstanding that those actions may have a tangential effect on working 20 NLRB Fact Sheet regarding McDonald’s (formerly available at http://nlrb.gov/news-outreach/fact-sheets/mcdonalds-fact-sheet) (emphasis added). Board members cannot make public statements about the merits of pending cases. Consequently, all press releases and similar public statements about pending cases can only be authorized by the General Counsel, and the General Counsel has issued press releases regarding the McDonald’s litigation. See, e.g., “NLRB Office of the General Counsel Issues Consolidated Complaints Against McDonald’s Franchisees and their Franchisor McDonald’s, USA, LLC as Joint Employers” (Dec. 19, 2014) (https://www.nlrb.gov/newsoutreach/news-story/nlrb-office-general-counsel-issues-consolidatedcomplaints-against); “NLRB Office of the General Counsel Authorizes Complaints Against McDonald’s Franchisees and Determines McDonald’s, USA, LLC is a Joint Employer” (July 29, 2014) (https://www.nlrb.gov/news-outreach/news-story/nlrb-office-generalcounsel-authorizes-complaints-against-mcdonalds). As indicated above, the NLRB’s McDonald’s “Fact Sheet” was extensively quoted in articles and postings that are still available on the Internet. Although the “Fact Sheet” has been removed from the NLRB website, the General Counsel is obviously pursuing the same jointemployer theories against McDonald’s. See fn. 19, supra.

conditions for franchisee employees. As Counsel for the General Counsel has stated, “[t]he Board should continue to exempt franchisors from joint-employer status to the extent that their indirect [control] over employee working conditions is related to their legitimate interest in protecting the quality of their . . . brand.” Thus, assuming arguendo that the General Counsel can prove that McDonald’s undertook some sort of “nationwide response”[to] SEIU’s campaign against the McDonald’s brand, the Company will submit that this response is an element of brand protection that is irrelevant to the joint employer allegations in this case. It is not idle speculation to posit that the SEIU’s campaign can only be viewed as an attack on the McDonald’s brand, with goals far different than organizing workers in a particular restaurant. The SEIU and their allies have released multiple reports, studies and articles making dubious broad-based claims—that the Company strongly disputes—aimed at harming McDonald’s public goodwill by attempting to associate the word “McDonald’s” with poor corporate citizenship. And the campaign’s “days of action” involve media-focused demonstrations at franchisee operated restaurants, such as paying with pennies during peak times and busing in demonstrators to be arrested for trespass, as well as disruptive protests at shareholder meetings and executives’ homes. Notwithstanding such actions, the SEIU and their allies have not filed a single representation petition at any McDonald’s restaurant; they have not made a single demand for recognition; they have not engaged in a single day of recognitional picketing.21 In support of the “brand protection” defense, McDonald’s served subpoenas on various parties, including the SEIU, seeking all documents that reflect or relate to efforts to impugn or attack the McDonald’s brand. For example, the subpoena served on the SEIU sought documents concerning any “Fast Food Campaign,” “McDonald’s” or “any McDonald’s Franchisee, any McDonald’s-Brand Restaurant, the McDonald’s brand, franchised and/or fast food businesses, the allegations in the Consolidated Complaint, and/or the allegations contained in the unfair labor practice charges filed in those cases, including the joint employer allegations.”22 The 21

McDonald’s Expedited Appeal, pp. 3–4. Subpoena served on SEIU, Requests 4, 7, 9, 10, 11, 12, 18–22, 31. The subpoenas requested documents relating to the McDonald’s “brand” (as described in the text), including relevant brand-related communications with any Charging Party, brand-related communications with the NLRB, brand-related communications with Berlin Rosen, brand-related communications with politicians, brand-related job or 22


SEIU and other Charging Parties filed petitions to revoke the subpoena requests pertaining to McDonald’s “brand protection” defense, and McDonald’s filed a consolidated opposition.23 B. The Judge’s Decision Revoking McDonald’s “Brand Protection” Subpoena Requests With inconsequential exceptions, the judge denied enforcement of McDonald’s subpoenas seeking all documents relating to McDonald’s “brand protection” defense.24 The judge acknowledged that the General Counsel contends in part that McDonald’s is a joint employer because “McDonald’s coordinated or directed the Franchisee Respondents’ conduct in connection with the employees’ protected and union activities,” and this was allegedly a “response to the employees’ activities at the Franchisee Respondents’ locations, and to other aspects of the Charging Parties’ organizing campaign . . . .”25 As explained above, however, the judge revoked all McDonald’s subpoena requests that would bear on McDonald’s efforts to prove that any direction or control it exercised was not a “response to the employees’ activiconsultant postings, and brand-related requests for proposals and research studies, among other things. The judge and my colleagues effectively deny enforcement to all these requests based on what appears to be the judge’s rejection of McDonald’s “brand protection” defense on the merits. 23 The judge inadvertently referred to the General Counsel’s filing an opposition. McDonald’s filed the opposition to the petitions to revoke. 24 The judge enforced the subpoenas served on the Charging Parties only for the period September 1, 2012 through December 31, 2014, and only insofar as McDonald’s sought (1) documents regarding actual protected concerted or union activities of the discriminatees named in the Consolidated Complaint; (2) documents showing “public activities” engaged in by the Charging Parties or employees “in connection with the Charging Parties’ campaign regarding the terms and conditions of employment for employees at restaurants of McDonald’s and/or its franchisees,” excluding “internal matters and deliberations, operations, and activities not disclosed to the public, McDonald’s or its franchisees,” and (3) documents “made available to McDonald’s, its franchisees, or the public in connection with the Charging Parties’ campaign regarding the terms and conditions of employment for employees at restaurants of McDonald’s and/or its franchisees.” Charging Parties Order, pp. 7–8 (emphasis added). As indicated in fn. 3, supra, the judge essentially permits McDonald’s to obtain only those documents reflecting public information that it would already know or that it had previously obtained. This disregards the primary reason that a party seeks documents pursuant to a Board-issued subpoena in the first place, which is to obtain relevant documents that would otherwise be unavailable to the party issuing the subpoena. 25 Charging Parties Order, pp. 2–3 (emphasis added); Non-Parties Order, pp. 4–5 (emphasis added). As noted previously, the same jointemployer theory against McDonald’s—that McDonald’s conducted a “nationwide response to franchise employee activities” that went “beyond protection of the brand”—was described in the McDonald’s “fact sheet” formerly posted on the NLRB web site. See fn. 20, supra, and accompanying text.

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ties” or to any employee “organizing campaign” but was, instead, in response to a centralized assault on the McDonald’s brand, directed and controlled by the SEIU and other groups. The judge not only denies enforcement of the McDonald’s subpoena requests regarding the “brand protection” defense, her orders leave no doubt that she has concluded the potential defense lacks merit. Moreover, the judge effectively rejects the “brand protection” defense primarily because the General Counsel’s attorneys express disagreement with it. The judge’s orders, which speak for themselves regarding this issue, state the following: McDonald’s articulates a convoluted theory based upon this particular assertion of General Counsel’s in order to argue that the vast array of information it seeks is relevant under the rubric of the established joint employer analysis. McDonald’s argues that the Charging Parties’ campaign, comprised in part of the employees’ protected concerted and union activities, in fact constituted an assault against its brand. McDonald’s contends in its Opposition that pursuant to the joint employer theory advanced by the General Counsel, McDonald’s had the right to engage in coordinated actions to protect the integrity of its brand. Therefore, any coordination or direction of the Respondent Franchisees’ activities in response to Charging Parties’ purported “brand attack” does not constitute evidence of a joint employer relationship. McDonald’s apparently contends that the materials it seeks via Subpoena from the Charging Parties and the Non-Parties are necessary for it to prove that the Charging Parties’ activities constituted an actual as opposed to a merely perceived “brand attack.” An actual assault on its brand would, according to McDonald’s depiction of General Counsel’s position, divest any evidence of its coordinated response of relevance in the context of the joint employer analysis. At the hearing, however, General Counsel disavowed McDonald’s characterization of his position, and the interpretation of the case law on which it is based. General Counsel stated that in previous cases addressing the alleged joint employer status of a franchisor and franchisee, the Board had found that certain aspects of the franchisor’s control over franchisee operations were intended to ensure a standardized product or customer association, and were therefore not pertinent to joint employer status. For example, in Love’s Barbeque Restaurant, the ALJ found that materials prescribing the recipes for food preparation and the sizes and portions of the menu items offered ultimately did not tend to establish

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joint employer status, as they “relate to the image, the historical image, of [the franchisor’s] chain,” as opposed to labor relations. 245 NLRB 78, 120 (1979). However, General Counsel stated that he only interpreted the cases as holding that in those particular instances such evidence did not tend to establish joint employer status. General Counsel stated that he did not glean from the Board’s previous joint employer cases involving franchise relationships a general rule exempting everything related to the franchisor’s “brand identity” or other intangibles from the purview of the National Labor Relations Act. Therefore, McDonald’s characterization of the position of General Counsel from which it constructed its “brand assault” theory is apparently inaccurate.26 The judge’s orders conclude that (i) whether the SEIU or other groups were attacking the McDonald’s brand is “effectively meaningless”;27 (ii) the “motivations” of the SEIU and other Charging Parties are “irrelevant” to whether McDonald’s and its franchisees, as joint employers, took adverse employment actions against employees “as a result” of their protected concerted or union activity;28 (iii) the “motivations” of the SEIU and other Charging Parties are “also irrelevant” to whether “McDonald’s generally coordinated or directed the conduct of the Franchisee Respondents in connection with the Charging Parties’ [organizing] campaign”;29 and (iv) there is no “relevance” to any accusations of “misconduct” or “nefarious intent on the part of the Charging Parties and other non-parties.”30 The judge also states: “[I]t is the conduct of McDonald’s and the Franchisee 26 Charging Parties Order, pp. 3–4 (emphasis added); Non-Parties Order, pp. 5–6 (emphasis added). The Non-Parties Order omits the word “apparently” in the final sentence quoted in the text, and states: “McDonald’s characterization of the position of General Counsel from which it constructed its ‘brand assault’ theory is inaccurate.” 27 Charging Parties Order, p. 4; Non-Parties Order, p. 6. 28 Id. As explained elsewhere below, I believe the judge misconstrues and recasts the brand protection defense as relating to the “motivations” of the SEIU and the Charging Parties, because, as described by McDonald’s, the defense relates to the conduct of the SEIU and other Charging Parties, and not their “motive.” See fn. 34 infra. After indicating there is no relevance to the manner in which McDonald’s construed the “motivations” or “actual intent” of the SEIU and the other Charging Parties, the judge’s orders state in a footnote: “Indeed, the . . . [Charging Parties] argue that McDonald’s arcane ‘brand assault’ theory was devised for the express purpose of justifying the sweeping inquiry into the Charging Parties’ and other non-parties’ activities being attempted via the Subpoenas.” Charging Parties Order, p. 4 fn. 4; Non-Parties Order, p. 6 fn. 7. 29 Id. 30 Charging Parties Order, p. 4 fn. 6; Non-Parties Order, p. 6 fn. 9.

Respondents that is at issue here; SEIU and the other Charging Parties are not respondents in this matter.”31 C. The McDonald’s “Brand Protection” Subpoena Requests Warrant Enforcement If a person accused of murder maintains he was acting in self-defense, evidence that he was being attacked is obviously relevant. If the person was not being attacked, this would be relevant because the claim of self-defense would almost certainly fail. If the person was being attacked, then evidence about the nature, timing and extent of the attack would directly affect the evaluation of whether the person’s disputed actions were actually motivated by self-defense, whether the actions were reasonably necessary to repel the attack, and whether the actions might, in part, still have been based on hostility towards the attacker. When addressing these issues, it would not be reasonable to do what the judge did here:  

 

The judge rejected the theory of self-defense at the outset of the case, before any evidence has been introduced. The judge concluded there can be no plausible claim of self-defense primarily because the prosecuting attorney has expressed disagreement with it. The judge declared she will only evaluate the “conduct” of the accused, and she will not even consider whether he was being attacked. The judge precluded the accused from even exploring potential development of a selfdefense claim, which is the effect of revoking all subpoena requests that, if enforced, might show the accused was under attack when relevant events took place.

A self-defense claim in a murder case involves the right to take actions based on “person protection.” In the instant case, Board law supports a theory that a franchisor may take actions for “brand protection.” Our prosecuting attorney, the General Counsel, has stated that McDonald’s should be found a joint employer based on an alleged “nationwide response to franchise employee activities” that allegedly went “beyond protection of the brand.”32 Consistent with Board case law, McDonald’s indicates it will argue that any centralized direction or control it exercised was not a “response to franchise employee activities” but, rather, responded to a centralized attack on the McDonald’s brand by the SEIU and other 31

Id. NLRB “fact sheet” regarding McDonald’s litigation, quoted in the text accompanying fn. 20, supra (emphasis added). See also fns. 18 and 25, supra, and accompanying text. 32


groups. Again, at this stage, we are not passing on whether this potential defense has merit, nor has it been established anyone engaged in an attack on the McDonald’s brand.33 However, the “brand protection” defense has colorable support in Board precedent, and McDonald’s is entitled to seek evidence that might establish whether and what type of an attack on the McDonald’s brand might have been occurring when relevant events took place. Evidence about whether the SEIU or other groups were engaged in an attack on the McDonald’s brand clearly has potential relevance. For example, enforcing McDonald’s subpoenas may help prove that the “brand protection” defense lacks merit: if the subpoenas are enforced and McDonald’s cannot present persuasive evidence of an attack on its brand, this would undermine or defeat the “brand protection” defense. Conversely, if the evidence shows the SEIU and/or other groups were engaged in a centralized attack on the McDonald’s brand, this might support the “brand protection” defense, but it would not end the inquiry. Evidence about the nature, timing and extent of any attack could influence the Board’s consideration of important subsidiary questions, including (i) whether McDonald’s actions were a response to the attack rather than to protected employee activities; (ii) whether McDonald’s actions were reasonably necessary in view of the attack, and (iii) whether McDonald’s actions might have been unlawfully motivated by hostility towards protected employee activities, notwithstanding the attack on the McDonald’s brand.34 33 It remains an open question whether McDonald’s exercised any centralized control over its franchisees in response to employee activities or to an attack on the McDonald’s brand conducted by the SEIU and/or other groups. See fn. 13, supra. 34 My colleagues and the judge fundamentally misconstrue the McDonald’s brand protection defense when they recast it as relating to the “motive” of the SEIU or the other Charging Parties. Here, my colleagues state “McDonald’s motivation is relevant, but the actual motive of SEIU and the other Charging Parties is not.” See also Charging Parties Order, p. 4 (judge states “motivations” of the SEIU and the Charging Parties are “irrelevant”); Non-Parties Order, p. 6 (same). As indicated in the text, existing Board law suggests that a franchisor’s actions in defense of its brand may be disregarded when evaluating joint-employer status, and McDonald’s seeks to prove that any centralized direction or control it provided was in response to an attack on the McDonald’s brand that was conducted by the SEIU or other Charging Parties. Just like a claim of self-defense, when determining whether McDonald’s actions were in defense of its brand, it is plainly relevant to consider whether evidence shows that the McDonald’s brand was actually being attacked. Such evidence, to the extent it exists, involves the conduct of the SEIU and other Charging Parties, and not their “motive.” Moreover, as explained previously, evidence about the nature, scope, and timing of such an “attack” would directly bear on subsidiary issues such as whether McDonald’s actions were, in fact, responsive to the attack; whether McDonald’s “brand protection” actions were reasonable given the extent of the attack; and whether McDonald’s might

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It is premature to conclude whether any of these considerations are controlling, and other variables may affect the disposition of these issues. At present, the Board’s task is not to provide answers but to properly frame the question. Specifically, as to “any matter . . . in question,”35 parties have a right to subpoena a broad range of documents that relate to their respective contentions so they can determine what documents, if any, should be introduced as evidence. For these reasons, I believe Section 11(1) of the Act, Section 102.31(b) of the Board’s Rules and Regulations, and fundamental principles of fairness warrant enforcement of McDonald’s “brand protection” subpoena requests. In my view, several other aspects of the judge’s opinion are inappropriate and detract further from her conclusions. First, as noted above, the judge’s orders create the impression that she has already decided in favor of the General Counsel and the Charging Parties regarding the “brand protection” defense, even before McDonald’s has had the chance to litigate this issue.36 Indeed, in addition to using the terms “convoluted” and “arcane” to describe the “brand protection” defense, the judge goes so far as to suggest that the defense is akin to a “conspiracy theory.”37 In my view, it is premature for the judge to reach nonetheless still have been motivated, in part, by hostility towards protected activities engaged in by franchisee employees. 35 NLRA Sec. 11(1), quoted in fn. 11, supra; Board’s Rules and Regulations Sec. 102.31(b) (same) (emphasis added). 36 See text accompanying fns. 26–31, supra. 37 Id. The judge’s orders indicate that McDonald’s “brand protection” defense is “analogous” to what the judge describes as an “entrapment” or “conspiracy theory” defense asserted by the employer in Bettie Page Clothing, 359 NLRB No. 96, slip op. at 1–2 (2013), supplemented 361 NLRB No. 79 (2014). There, after discharging two employees in response to protected concerted activities, the employer claimed that the employees exhibited “happiness” at being fired, 359 NLRB No. 96, slip op. at 8, which, according to the employer, meant the employees “schemed to entrap their employer into firing them,” id., slip op. at 1. The Board agreed with the judge that the employer’s “conspiracy” theory was “nonsensical.” Id., slip op. at 1, 8 fn. 4. McDonald’s “brand protection” defense bears no resemblance to the “entrapment” theory defense espoused by the employer in Bettie Page, which was analogized to a “conspiracy” theory and rejected. Here, McDonald’s contends that any centralized control it exercised over franchisees was undertaken for “brand protection” in response to a coordinated attack on its brand; and unlike the “entrapment” theory espoused in Bettie Page, McDonald’s “brand protection” defense has support in existing Board law. See, e.g., S. G. Tilden, Inc. and Love’s Barbeque, discussed in the text accompanying fns. 14–17, supra. Moreover, McDonald’s does not argue that it was “entrapped” into violating the Act based on a brand attack allegedly coordinated by the SEIU and/or other groups. Rather, McDonald’s argues that the alleged attack against the McDonald’s brand bears directly on a fundamental question central to the General Counsel’s theory of joint-employer liability—namely, was any centralized direction or control by McDonald’s in response to protected employee activities (which the General Counsel alleges warrants joint-employer liability) or was it in response

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such conclusions, and if forced to evaluate them in the abstract when no record evidence has even been introduced, I believe the judge’s characterizations do not withstand scrutiny. Although McDonald’s “brand protection” defense may ultimately be found to lack merit, it has a colorable basis in existing Board law, the “brand protection” concept appears in statements made by the General Counsel, and McDonald’s has a right to introduce evidence in support of this defense rather than having it summarily rejected at the outset.38 Second, the judge’s orders are also objectionable because, as noted above, the primary reason given by the judge for rejecting McDonald’s “brand protection” argument is the fact that the General Counsel disagrees with it. It is unsurprising that the General Counsel’s attorneys would argue against McDonald’s “brand protection” defense, since the General Counsel’s primary objective is to impose joint-employer liability on McDonald’s in this case. More fundamentally, the judge erroneously suggests that this defense rests entirely on McDonald’s “characterization” of a “particular assertion” made by the General Counsel.39 This disregards the fact that McDonald’s “brand protection” defense has support in existing NLRB case law,40 not merely a “particular assertion” by the Board’s General Counsel. Moreover, the General Counsel has embraced the “brand protection” concept in multiple statements, including the General Counsel’s brief submitted to the Board in Browningto an attack on the McDonald’s brand (which response McDonald’s argues, relying on Board precedent, cannot be deemed evidence of joint-employer status)? Finally, at this point, McDonald’s is not even raising the “brand protection” argument as a defense. Instead, McDonald’s is merely seeking to subpoena relevant documents so this potential defense can be supported by evidence to be introduced subsequently in this litigation. In all these respects, the McDonald’s “brand protection” defense is materially different from the “entrapment” defense rejected in Bettie Page. 38 Unlike the judge, my colleagues state they “are not passing on the merits of McDonald’s ‘brand protection’ defense” and they state that “[n]othing in this Order, or in the judge’s Orders, prevents McDonald’s from presenting its brand protection defense based on its perception of the Charging Parties’ campaign.” I agree with my colleagues that the Board should not, at this point, pass on the merits of McDonald’s brand protection defense. However, by upholding the judge’s refusal to enforce the disputed subpoena requests, I believe the Board majority is improperly preventing McDonald’s from obtaining relevant evidence that may be central to its pursuit of this defense. 39 Charging Parties Order, pp. 3–4; Non-Parties Order, pp. 5–6. The judge reasons that McDonald’s “brand protection” defense lacks merit because “[a]t the hearing . . . the General Counsel disavowed McDonald’s characterization of his position” by stating “he did not glean from the Board’s previous joint employer cases involving franchise relationships a general rule exempting everything related to the franchisor’s ‘brand identity’ . . . from the purview of the National Labor Relations Act.” Id. 40 See fns. 14–18, supra, and accompanying text.

Ferris Industries41 and public statements by the General Counsel about McDonald’s joint-employer liability in this case.42 Even if the General Counsel’s attorneys argue for a narrower interpretation of existing law,43 this does not warrant a decision by the judge, at the outset of this case, that extinguishes McDonald’s right to subpoena documents relevant to a defense that rests on a colorable alternative construction of Board precedent. Indeed, although this litigation has barely begun, we do not need a crystal ball to recognize that any decision that the judge renders on the merits will likely reach the Board on exceptions and, potentially, the Federal courts of appeals on petitions for review. This makes it all the more important to permit all parties, at this stage, to create a proper record based on their respective interpretations of Board law regarding the “brand protection” principle and McDonald’s “brand protection” defense. Third, I am concerned that the judge’s orders and my colleagues’ decision suggest the existence of a double standard, under which extraordinary deference is accorded to the General Counsel’s attorneys, whose prosecutorial decisions are the driving force behind nearly everything in this unprecedented litigation,44 while McDonald’s and other respondents are being afforded no comparable latitude, even concerning a good-faith defense that has support in existing Board law. Even though the Board may eventually determine that the “brand protection” defense lacks merit, McDonald’s has a right to assert and develop this defense, which includes a broad right to subpoena relevant documents. I believe the judge and my colleagues improperly abridge these rights by granting the petitions to revoke these requests. Finally, I agree that the Board must exercise care when evaluating subpoena requests that potentially encompass documents unrelated to matters in question in the litigation, especially if some documents relate to an organization’s general operations, contain sensitive financial data, 41

See text accompanying fn. 18, supra. See text accompanying fn. 20, supra. 43 Such a narrow interpretation is suggested in the judge’s orders, which state the General Counsel contends that the Board’s “brand protection” cases should be limited to “those particular instances,” and the General Counsel argues against a “general rule exempting everything related to the franchisor’s ‘brand identity’ . . . from the purview of the National Labor Relations Act.” See text accompanying fn. 26, supra. 44 The General Counsel’s attorneys are pursuing multiple theories of joint-employer liability, one of which was contrary to then-existing law at the commencement of this litigation; the Board has never previously permitted such a mega-consolidation of unconnected claims and parties; and the judge has adopted unconventional case management procedures, based on proposals advanced by the General Counsel, that dramatically depart from conventional Board litigation. See fn. 2, supra. 42


or disclose the identity of persons engaged in unrelated protected activities. For these reasons, I agree with some of the judge’s rulings that revoke certain subpoena requests.45 However, parties have no blanket right to withhold relevant documents merely because they disclose non-public information, shed light on various activities, or are considered internal to the organization.46 Nor have McDonald’s and other respondents been spared the need to disclose extensive internal documentation, operating procedures and policies in response to voluminous requests. The General Counsel has enforced its own subpoenas against McDonald’s and various respondents,47 in addition to information obtained by six NLRB Regions when they investigated the 61 separate charges that have now been consolidated into the present case. CONCLUSION In First National Maintenance Corp. v. NLRB,48 the Supreme Court stated that the National Labor Relations Act “is not intended to serve either party’s individual interest, but to foster in a neutral manner a system in which the conflict between these interests may be resolved.”49 Our statute and Rules and Regulations give each party a broad right to subpoena documents regarding any matter in “question.”50 Although the General Counsel and McDonald’s may dispute everything else, they agree that the most important “question” in this case is whether McDonald’s has joint-employer liability. I believe the disputed subpoena requests encompass documents that are clearly relevant to this central issue. Therefore, I respectfully dissent from my colleagues’ decision to revoke subpoena requests relevant to McDonald’s “brand protection” defense, and I believe other aspects of the judge’s orders regarding McDonald’s “brand protection” defense are premature and inappropriate. Accordingly, as to these issues, I dissent from the majority’s decision. 45

See fn. 5, supra. See, e.g., Charging Parties Order, p. 4 fn. 4 (suggesting that McDonald’s subpoena requests are inappropriate because they constitute a “sweeping inquiry into the Charging Parties’ and other nonparties’ activities”); Non-Parties Order, p. 6 fn. 7 (same). 47 See, e.g., NLRB v. K. Mark Enterprises, LLC et al., 2016 WL 233096 (N.D. Ill. Jan. 20, 2016); NLRB v. Nornat, Inc. et al., 2016 WL 233098 (N.D. Ill. Jan. 20, 2016); NLRB v. AJD, Inc. et al., 2015 WL 7018351 (S.D.N.Y. Nov. 12, 2015). 48 452 U.S. 666 (1981). 49 Id. at 679 (emphasis added). 50 See fn. 11, supra. 46

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Dated, Washington, D.C. March 17, 2016 ______________________________________ Philip A. Miscimarra, Member NATIONAL LABOR RELATIONS BOARD ORDER GRANTING AND DENYING IN PART THE PETITIONS TO REVOKE MCDONALD’S USA, LLC’S SUBPOENAS DUCES TECUM SERVED UPON THE CHARGING PARTIES AND KENDALL FELLS The Consolidated Complaint and Notice of Hearing in this matter alleges that McDonald’s USA, LLC (“McDonald’s”), as a joint employer with its franchisees (the “Respondent Franchisees” or “Franchisee Respondents”), committed various violations of Sections 8(a)(1) and (3) of the Act in response to their employees’ protected concerted and union activities. McDonald’s and the Franchisee Respondents filed Answers denying the Consolidated Complaint’s material allegations. McDonald’s served Service Employees International Union (“SEIU”), and the Fast Food Workers Committee and other Charging Parties1 with Subpoenas Duces Tecum. Subsequently, the Charging Parties filed Petitions to Revoke, and General Counsel filed a consolidated Opposition. McDonald’s also served a Subpoena Duces Tecum on Kendall Fells, an employee of SEIU, and SEIU filed a Petition to Revoke . For the following reasons, I find that McDonald’s Subpoenas are overbroad, and require the production of material which lacks relevance to the issues raised by the Consolidated Complaint’s allegations. I also find that the production of documents as required by McDonald’s Subpoenas would have a chilling effect on the employees’ exercise of their rights protected under Section 7 of the Act. However, as discussed below, a subset of the materials sought are relevant to: (i) the protected concerted and union activities of the individuals named as discriminatees in the Consolidated Complaint; (ii) the Consolidated Complaint’s other allegations of retaliatory conduct; and the General Counsel’s contention that McDonald’s coordinated or directed the response of its franchisees to the Charging Parties’ campaign in a manner that tends to prove that McDonald’s and the Franchisee Respondents are joint employers. As a result, the Charging Parties’ Petitions to Revoke are granted and denied in part. Under Section 102.31(b) of the Board’s Rules and Regulations, documents sought via subpoena should be produced so long as they relate to any matter in question, or can provide background information or lead to other potentially 1 The Charging Parties Fast Food Workers Committee, Pennsylvania Workers Organizing Committee, a project of the Fast Food Workers committee, Workers Organizing Committee of Chicago, Los Angeles Organizing Committee, and Western Workers Organizing Committee, all served with Subpoenas Duces Tecum by McDonald’s , will be collectively referred to as the “Workers Committees.”

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relevant evidence. See also Perdue Farms, 323 NLRB 345, 348 (1997), affd. in relevant part, 144 F.3d 830, 833–834 (D.C. Cir. 1998) (information need only be “reasonably relevant”) . Under Rule 26(b)(1) of the Federal Rules of Civil Procedure, which the Board has referred to for guidance in deciding such issues, information sought in a subpoena must only be “reasonably calculated to lead to the discovery of relevant evidence.” See Brink’s, Inc., 281 NLRB 468 (1986) . A. The Consolidated Complaint and the Parties’ Contentions As I have discussed in previous Orders, two separate entities constitute joint employers of a single group of employees where the evidence establishes that they “share or codetermine those matters governing the essential terms and conditions of employment,” or “meaningfully affect[]” employment issues such as hiring, firing, discipline, supervision and direction of work. CNN America, Inc., 361 NLRB No. 47, at p. 3 (2014), quoting TLI, Inc., 271 NLRB 798 (1984) and Laerco Transportation, 269 NLRB 324, 325 (1984); see also Computer Associates Intl., 332 NLRB 1166, 1167–1168 (2000). The Board and the courts have also considered the putative joint employer’s involvement in determining the number of available jobs and setting wage rates and total overtime hours, and its participation in the collective bargaining process, as well as job descriptions, quality improvement, training, staffing levels, and workers compensation insurance. See CNN America, Inc., 361 NLRB No. 47, at p. 3, fn. 7; see also Quantum Resources Corp., 305 NLRB 759, 760 (1991); Moderate Income Management Co., 256 NLRB 1193, 1194 (1981); Pacific Mutual Door Co., 278 NLRB 854, 858–859 (1986); Whitewood Maintenance Co., 292 NLRB 1159, 1162 (1989) . In addition, General Counsel contends here that McDonald’s coordinated or directed the Franchisee Respondents’ conduct in connection with the employees’ protected and union activities in a manner which tends to prove that McDonald’s “share[s] or codetermine[s] those matters governing the essential terms and conditions of employment,” or “meaningfully affects” employment issues at the Franchisee Respondents’ locations. Thus, General Counsel argues that McDonald’s response to the employees’ activities at the Franchisee Respondents’ locations, and to other aspects of the Charging Parties’ organizing campaign, is relevant on this basis.2 2 McDonald’s raised nine Affirmative Defenses in its Answers. McDonald’s contends that the Complaints contained inadequate conclusory allegations regarding joint employer status which provided it with insufficient notice and deprived it of procedural due process. McDonald’s also contends that the NLRB lacks authority to depart from the common law of agency in itsjoint employer analysis and that, pursuant to Capitol EMI Music, 311 NLRB 997 (1993), McDonald’s neither knew nor should have known of the Franchisee Respondents’ unlawful conduct. McDonald’s other Affirmative Defenses assert that the General Counsel abused his prosecutorial discretion and deprived it of due process in the consolidation of charges, that the NLRB lacks jurisdiction, that the unfair labor practices were untimely pursuant to Section 10(b) of the Act, and that an inherent statutory conflict be-

McDonald’s articulates a convoluted theory based upon this particular assertion of General Counsel’s in order to argue that the vast array of information it seeks is relevant under the rubric of the established joint employer analysis. McDonald’s argues that the Charging Parties’ campaign, comprised in part of the employees’ protected concerted and union activities, in fact constituted an assault against its brand .3 McDonald’s contends in its Opposition that pursuant to the joint employer theory advanced by the General Counsel, McDonald’s had the right to engage in coordinated actions to protect the integrity of its brand. Therefore, any coordination or direction of the Respondent Franchisees’ activities in response to Charging Parties’ purported “brand attack” does not constitute evidence of a joint employer relationship . McDonald’s apparently contends that the materials it seeks via Subpoena from the Charging Parties and the Non-Parties are necessary for it to prove that the Charging Parties’ activities constituted an actual as opposed to a merely perceived “brand attack.” An actual assault on its brand would, according to McDonald’s depiction of General Counsel’s position, divest any evidence of its coordinated response of relevance in the context of the joint employer analysis. At the hearing, however, General Counsel disavowed McDonald’s characterization of his position, and the interpretation of the case law on which it is based . General Counsel stated that in previous cases addressing the alleged joint employer status of a franchisor and franchisee, the Board had found that certain aspects of the franchisor’s control over franchisee operations were intended to ensure a standardized product or customer association, and were therefore not pertinent to joint employer status. For example , in Love’s Barbeque Restaurant, the ALJ found that materials prescribing the recipes for food preparation and the sizes and portions of the menu items offered ultimately did not tend to establish joint employer status , as they “relate to the image, the historical image, of [the franchisor’s] chain,” as opposed to labor relations. 245 NLRB 78, 120 (1979). However, General Counsel stated that he only interpreted the cases as holding that in those particular instances such evidence did not tend to establish joint employer status. General Counsel stated that he did not glean from the Board’s previous joint employer cases involving franchise relationships a general rule exempting everything related to the franchisor’s “brand identity” or other intangibles from the purview of the National Labor Relations Act. Therefore, McDonald’s characterization of the position of General Counsel from which it attempts to construct its “brand assault” theory is apparently inaccurate. In addition, the distinction McDonald’s seeks to draw between an actual and perceived attack on its brand—which it purportedly requires the information sought in its Subpoenas tween the Lanham Act and the National Labor Relations Act precludes the NLRA’s applicability. 3 McDonald’s apparently does not contend that the activities of the employees at the Respondent Franchisee locations lost the protection of the Act on this basis.


to elucidate—is effectively meaningless given the overall joint employer analysis. In the context of General Counsel’s argument, the salient information is the evidence pertaining to McDonald’s coordination or direction of its franchisees’ activities, in and of itself, in response to the employees’ protected concerted and union activities and the other activities of the Charging Parties. Evidence of McDonald’s conduct in this regard either will or will not tend to establish that it shares, co-determines, or meaningfully affects the terms and conditions of employment at the Respondent Franchisee locations, regardless of the manner in which McDonald’s construed the Charging Parties’ motivations, let alone the Charging Parties’ actual intent.4 Furthermore, the motivations of parties engaged in protected concerted or union activity are irrelevant when it is the employer’s response that is the matter “in question” in the case. For example , the Board has squarely held that employees’ motivation for engaging in protected concerted or union activity is completely irrelevant in the context of an allegation that their employer retaliated against them on that basis. See Bettie Page Clothing, 359 NLRB No. 96, s l i p o p . at 1–2 (2013), 361 NLRB No. 79 (2014) (ALJ properly rejected employer’s “conspiracy theory” that employees allegedly discharged in retaliation for their protected concerted activity “schemed to entrap their employer into firing them”).5 I find McDonald’s “brand assault” theory analogous in this respect to the “entrapment” theory asserted by the employer and rejected by the Board in Bettie Page Clothing. Thus, the motivations of the SEIU and the Charging Party Workers Committees are irrelevant to whether the named discriminatees were engaged in protected concerted or union activity, and whether McDonald’s and the Franchisee Respondents, as a joint employer, took certain adverse employment actions against them as a result. The Charging Parties’ motivations are also irrelevant to whether McDonald’s generally coordinated or directed the conduct of the Franchisee Respondents in connection with the Charging Parties’ campaign.6 Charging Parties contend that given the overbreadth of the paragraphs contained in the Rider to the Subpoenas, the ir4 Indeed, the Fast Food Workers Committee and other Charging Parties argue that McDonald’s arcane “brand assault” theory was devised for the express purpose of justifying the sweeping inquiry into the Charging Parties’ and other non-parties’ activities being attempted via the Subpoenas. See Flaum Appetizing Corp., 357 NLRB 2006, 2010 (2011). 5 In addition, there is no equitable “unclean hands” defense cognizable under the National Labor Relations Act. See Staffing Network Holdings , 362 NLRB No. 12, p. 11 (2015); Woodworkers Local 3433 (Kimtruss Corp.), 304 NLRB 1 (1991). 6 Nor is there any relevance to the other accusations of misconduct and nefarious intent on the part of the Charging Parties and other nonparties contained in McDonald’s Opposition, given the Consolidated Complaint’s allegations. Again, it is the conduct of McDonald’s and the Franchisee Respondents that is at issue here; SEIU and the other Charging Parties are not respondents in this matter. Although McDonald’s Opposition is replete with claims of misconduct on the part of SEIU, the Workers Committees, and non-party New York Communities for Change, Inc., no charges alleging that any of them violated Section 8(b) of the Act were ever filed.

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relevance of the information sought, and the potential chilling effect on employees’ protected concerted and union activities, the Subpoenas should be revoked in their entirety. However, certain limited aspects of the information sought by McDonald’s are relevant. The protected concerted and union activities of the individual employees named in the Consolidated Complaint are relevant to the allegations that McDonald’s and the Franchisee Respondents retaliated against them in violation of Sections 8(a)(1) and (3). In addition, the protected concerted and union activities of employees at McDonald’s restaurants and the Charging Parties’ campaign are relevant to the Consolidated Complaint’s more general allegations of conduct in retaliation for those activities, and to General Counsel’s contention that McDonald’s coordinated or directed the response of the Franchisee Respondents to those activities in a manner evincing joint employer status. However, I find that, with the exception of the protected concerted and union activities of the alleged discriminatees, only information which would have actually imparted knowledge to McDonald’s and the Franchisee Respondents of the Charging Parties’ campaign and the activities of employees in connection with the campaign is pertinent. By contrast, information regarding the Charging Parties’ internal affairs, operations, strategies, and activities not disclosed to McDonald’s or to the public is not germane to the alleged violations committed by McDonald’s and the Franchisee Respondents, or to any coordination by McDonald’s of the Franchisee Respondents’ actions, in response. Thus, I find that the only information sought by McDonald’s relevant to the Consolidated Complaint’s allegations concerns the following: (i) the actual protected concerted and union activities engaged in by the individual employees allegedly subject to retaliation by McDonald’s and the Franchisee Respondents; (ii) the actual activities engaged in by the Charging Parties and the employees to which, according to General Counsel, McDonald’s and the Franchisee Respondents effected a coordinated response; and (iii) any other information that would have provided McDonald’s and the Franchisee Respondents with knowledge of the Charging Parties’ campaign, and the employees’ protected concerted and union activities. Charging Parties argue that McDonald’s Subpoenas should be revoked in their entirety, and that McDonald’s should be required to formulate more circumscribed demands for information in new Subpoenas and effect service again. However, in order to increase the efficiency of the hearing process and conserve resources for all concerned, I will instead require the production by Charging Parties of evidence relevant to the issues raised by the Consolidated Complaint in this Order. I now turn to the specific categories of information which McDonald’s Subpoenas would require that the Charging Parties produce. B. Information Sought Regarding Charging Parties’ Operations McDonald’s Subpoenas to the Charging Parties require the production of certain information regarding their inter-

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nal operations, structure, and finances. For example, the Subpoena served on SEIU seeks information regarding the job duties and compensation of individuals employed by or associated with SEIU (¶17).7 The Subpoenas to the Workers Committees require the production of documents regarding the creation of these entities, their organizational structure, constitution and by-laws, government filings, and finances (¶¶1–7). The Subpoenas also seek information regarding any financial relationship between the Charging Parties (SEIU Subpoena ¶24; Workers Committees Subpoenas ¶6). Because the Charging Parties’ inception, operations, and motives are irrelevant to the allegations of retaliation or the joint employer issue for the reasons discussed above, these paragraphs seek immaterial information. I note that the Board has in the past revoked subpoenas seeking general information regarding the organization, structure, and finances of unions when not directly related to a matter “in question” in the case. Burns Security Services, 278 NLRB 565, 565–566 (1986) (revoking subpoena requiring the production of documents regarding union’s general operations to purportedly establish that union was affiliated with a non-guard labor organization, and could not be certified pursuant to Section 9(b)(3)). As a result, the Charging Parties’ Petitions to Revoke these paragraphs are granted. C. Information Sought Regarding Charging Parties’ Organizi ng Strategy and Activity McDonald’s Subpoenas to the Charging Parties also seek information regarding their overall organizing strategies and tactics (SEIU Subpoena ¶¶13–16, 18–23; Workers Committees Subpoenas ¶¶11, 19). The Subpoenas further require the production of documents pertaining not only to McDonald’s and its franchisees, but to “the Fast Food Campaign or other similar activity,” and any “franchised and/or fast food businesses” (SEIU Subpoena ¶¶ 4, 7, 9,–12, 18–23, 31; Workers Committees Subpoenas ¶¶9–11). Such information is irrelevant to the Consolidated Complaint’s allegations that McDonald’s and the Respondent Franchisees violated Sections 8(a)(1) and (3) of the Act.8 See Interstate Builders , 334 NLRB 835, 841–842 (2001), revd. in part 351 F.3d 1020 (10th Cir. 2003) (revoking subpoena seeking materials regarding union’s internal operations and “organizing practices or ‘salting’ program” as irrelevant to the alleged discriminatory refusal to hire the employees in question). In addition, for the reasons discussed above, these materials have no 7 McDonald’s also served a separate Subpoena Duces Tecum on Kendall Fells, which SEIU petitioned to revoke. Fells has apparently been an employee of SEIU since 2006, and his activities in connection with the campaign and the protected concerted and union activities of employees at the Franchisee Respondent’s locations, if any, took place within the scope of that employment. As a result, I find that McDonald’s Subpoena served upon Fells is cumulative and duplicative of its Subpoena served on SEIU pursuant to Federal Rule of Civil Procedure 26(b)(2)(C)(i) . SEIU’s Petition to Revoke it is therefore granted. 8 McDonald’s contends that these paragraphs do not seek materials regarding organizing strategy, because no petition for a representation election has been filed. However, the actual filing of a petition is not necessary in order for organizing, or concerted and union activity protected by Section 7, to have taken place.

relevance to the contention that McDonald’s coordination or direction of its franchisees’ conduct in response to the employees’ protected concerted and union activities evinces a joint employer relationship. I therefore find that these materials are not pertinent to the issues raised by the Consolidated Complaint’s allegations, and the Charging Parties’ Petitions to Revoke these paragraphs are granted. D. Information Sought Regarding Protected Concerted and Union Activities McDonald’s Subpoenas to the Charging Parties also encompass the production of materials regarding the protected concertedandunionactivitiesofemployeesatthe Franchisee Respondents’ locations. I find that such materials—to the extent that they reflect activities of employees which actually occurred and are not internal documents reflecting overall strategy—are relevant to the Consolidated Complaint’s allegations. However, it is well settled that where information sought by subpoena or in testimony would disclose the identities of employees engaged in union activity who are not named as alleged discriminatees in a complaint, their confidentiality interests, which are of “overriding concern,” must be balanced against the Respondent’s right to conduct a comprehensive cross-examination. National Telephone Directory Corp., 319 NLRB 420, 421–422 (1995); see also Manorcare Health Services-Easton, 356 NLRB 202, 235–236 (2010), enfd. 661 F.3d 1139 (D.C. Cir. 2011). Although some paragraphs contained in the Riders to the Subpoenas specifically state that the names of employees engaged in protected activity should not be disclosed in the documents produced, other, broader paragraphs contain no such limitation . I find that the potential chilling effect of disclosure on the protected concerted activity of employees not named in the Consolidated Complaint outweighs the necessity of the information sought to McDonald’s defense. E. Conclusion For all of the foregoing reasons, the Petitions of Charging Parties SEIU and the Workers Committees to Revoke McDonald’s Subpoenas Duces Tecum are granted except as set forth below. The Petition to Revoke McDonald’s Subpoena Duces Tecum served on Kendall Fells is granted. The Charging Parties are ordered to produce the following documents, to the extent that they do not reflect organizing strategy or contain privileged material, for the period September 1, 2012, through December 31, 2014. Documents shall be redacted in all cases to omit information identifying any employees not named as alleged discriminatees in the Consolidated Complaint. 1. All documents regarding the actual protected concerted or union activities of the individuals named as alleged discriminatees in the Consolidated Complaint. 2. All documents showing the public activities engaged in by the Charging Parties or by employees of McDonald’s and/or its franchisees in connection with the Charging Parties’ campaign regarding the terms and conditions of employment for employees at restaurants of McDonald’s and/or its franchisees. Material involving internal matters


and deliberations, operations, and activities not disclosed to the public, McDonald’s or its franchisees, need not be produced. 3. All documents made available to McDonald’s, its franch isees, or the public in connection with the Charging Parties’ campaign regarding the terms and conditions of employment for employees at restaurants of McDonald’s and/or its franchisees. Dated: New York, New York April 9, 2015 LAUREN ESPOSITO, Administrative Law Judge. ORDER GRANTING THE PETITIONS TO REVOKE MCDONALD'S USA, LLC’S SUBPOENAS DUCES TECUM SERVED UPON MINTZ GROUP, LLC, LR HODGES & ASSOCIATES, LTD., BERLIN ROSEN, LTD. AND NEW YORK COMMUNITIES FOR CHANGE, INC. The Consolidated Complaint and Notice of Hearing in this matter alleges that McDonald’s USA, LLC (“McDonald’s”), as a joint employer with its franchisees (the “Respondent Franchisees” or “Franchisee Respondents”), committed various violations of Sections 8(a)(1) and (3) of the Act in response to their employees’ protected concerted and union activities. McDonald’s and the Franchisee Respondents filed Answers denying the Consolidated Complaint’s material allegations. In and around mid-February 2015, McDonald’s served Subpoenas Duces Tecum on non-parties the Mintz Group, LLC (“Mintz Group”), LR Hodges & Associates, Ltd. (“LR Hodges”), Berlin Rosen, Ltd. (“Berlin Rosen”), and New York Communities for Change, Inc. (“NYCC”).1 Subsequently, Mintz Group, LR Hodges, Berlin Rosen, and NYCC filed Petitions to Revoke, and McDonald’s filed a consolidated Opposition. The non-parties petitioning to Revoke the Subpoenas herein were retained by, or worked with, the Charging Parties in connection with their campaign to organize employees at McDonald’s and the Franchisee Respondent’s restaurants. The Mintz Group is a private investigative firm which provides litigation assistance to law firms and their clients, which has been engaged since 2013 by James & Hoffman, PC, counsel to Service Employees International Union (“SEIU”), in anticipation of the instant case and other potential litigation, to investigate indicia of joint employment. The Mintz Group states in its Petition to Revoke that it has acted under the direction and control of James & Hoffman, which established the objectives of its investigation and monitored its work. LR Hodges was also retained by James & Hoffman to provide similar investigative and consulting services in anticipation of this litigation. Berlin Rosen is a firm specializing in public affairs and strategic communications, which was hired by SEIU in connection with the union’s campaign to organize low-wage and fast food workers. NYCC is a nonprofit advocacy organization, which has collaborated with the Fast Food Workers Committee in order to organize fast-food workers and improve their working conditions. 1 For the sake of convenience, I will at times refer to these entities collectively as “the Non-Parties.”

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I find here that the materials sought by McDonald’s in its Subpoenas to the Non-Parties are not relevant to the issues raised by the Consolidated Complaint’s allegations. I further find that, under the Federal Rules of Civil Procedure, McDonald’s has not established that it has a substantial need for information which constitutes privileged work product and cannot obtain its substantial equivalent by other, more convenient and less burdensome means. As a result, the Petitions to Revoke McDonald’s Subpoenas Duces Tecum filed by the Non-Parties are granted. A. The Standard for Subpoenas Issued to Non-Parties Under Section 102.31(b) of the Board’s Rules and Regulations, documents sought via subpoena should be produced so long as they relate to any matter in question, or can provide background information or lead to other potentially relevant evidence. See also Perdue Farms, 323 NLRB 345, 348 (1997), affd. in relevant part, 144 F.3d 830, 833–834 (D.C. Cir. 1998) (information need only be “reasonably relevant”). Under Rule 26(b)(1) of the Federal Rules of Civil Procedure, which the Board has referred to for guidance in deciding such issues, information sought in a subpoena must only be “reasonably calculated to lead to the discovery of relevant evidence.” See Brinks, Inc., 281 NLRB 468 (1986). The Federal Rules of Civil Procedure restrict attempts to obtain information in a cumulative or duplicative manner, and which would burden non-parties to the litigation. Rule 26(b)(2)(C)(i) states that “the court must limit the frequency of extent of discovery otherwise allowed” where “the discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive.” See also Brinks, Inc., 281 NLRB at 468–469. Rule 45(d)(3)(A)(iv) requires the federal courts to “quash or modify a subpoena” which “subjects a person to undue burden.” As a result, the courts have delineated “a heightened regard for the burden to be imposed on a third party” in determining whether to quash a subpoena served upon a non-party to the case. In re Subpoena to Goldberg, 693 F.Supp.2d 81, 88 (D.D.C. 2010); Schaaf v. Smithkline Beecham Corp., 233 F.R.D. 451, 453 (E.D.N.C. 2005). In particular, the federal courts have quashed subpoenas to third parties when the information sought would be available from parties to the litigation. See, e.g. Amini Innovation Corp. v. McFerran Home Furnishings, Inc., 300 F.R.D. 406, 412, fn. 6 (C.D. Cal. 2014). These principles are pertinent here. McDonald’s has also served Subpoenas Duces Tecum on SEIU, the Fast Food Workers Committee, and the other Charging Parties in this matter. As the Non-Parties argue, the Subpoenas served on them by McDonald’s seek information which is materially identical to the information McDonald’s seeks in its Subpoena served on SEIU, a party to the proceeding. Other information sought by McDonald’s from the Non-Parties is also the subject of subpoenas served on the Fast Food Workers Committee and the other Charging Parties. As a result, I find that the majority of the information sought by McDonald’s in its Subpoenas to the Non-Parties, to the extent it is to be produced at all, can be obtained from another source—namely SEIU and the other Charging Parties. In particular, I find that the Charging Parties

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would be a more convenient, less burdensome source for the information sought. The Subpoenas issued by McDonald’s to the Non-Parties, which reiterate demands for materials also directed to SEIU and the other Charging Parties, are therefore cumulative and duplicative in nature. Pursuant to this standard, the Subpoenas present an undue burden on the Non-Parties, and their Petitions to Revoke on this basis are granted.2 B. Work Product Privilege In addition to the arguments regarding the burdensome nature of the Subpoenas as served upon non-parties to the proceeding, the Mintz Group and LR Hodges argue that the materials sought by McDonald’s constitute protected work product. Rule 26(b)(3)(A) provides that materials prepared by a party’s representative in anticipation of litigation are protected from discovery unless the party seeking production “has substantial need for the materials to prepare its case and cannot, without undue hardship, obtain their substantial equivalent by other means.”3 The Board has utilized Rule 26(b)(3) to determine the existence of a work product privilege as well. Central Telephone Co. of Texas, 343 NLRB 987, 988–990 (2004) (human resources specialist’s notes of interviews with union officers and employees, taken during investigation of their alleged misconduct, constituted protected work product). It is well settled that this protection for work product in anticipation of litigation extends to materials prepared by investigators assisting attorneys, as well as the attorneys themselves. U.S. v. Nobles, 422 U.S . 225, 238–239 (1975). I find that the investigative files prepared and maintained by the Mintz Group and LR Hodges constitute protected work product. There is no dispute that these two nonparties were retained by James & Hoffman to gather information pertinent to the joint employer relationship, if any, between McDonald’s and the Franchisee Respondents in anticipation of this litigation, and other cases in which the issue might arise. The materials McDonald’s seeks are therefore privileged work product. As a result, McDonald’s must show that it has a substantial need for the materials it seeks by Subpoena from the Mintz Group and LR Hodges, and cannot obtain their substantial equivalent without undue hardship. For the reasons discussed in Sections A and C, I find that McDonald’s has not satisfied these criteria.4 The Petitions of the Mintz Group and LR Hodges to 2 McDonald’s contends that the Non-Parties admit in their Petitions to Revoke that they do have some documents which may not be in the possession of SEIU. To the extent that this is the case, I find that such documents in possession of the Mintz Group and JR Hodges would be subject to work product privilege as discussed in Section B, and would otherwise be irrelevant for the reasons discussed in Section C. 3 The materials must also be discoverable under Rule 26(b)(1). 4 I also note that the investigations conducted by the Mintz Group and LR Hodges were directed toward obtaining information regarding McDonald’s own management procedures and operations with respect to its franchises and employees at the Franchisee Respondent locations. As the Mintz Group and LR Hodges argue, McDonald’s has ample access to this information without the materials it seeks via Subpoena. The Mintz Group also notes that McDonald’s has the same access to public records and to its former employees as did the investigators. See In Re Student Finance Corp., 2006 WL 3483487 at *14–15 (E.D. Pa. 2006).

Revoke McDonald’s Subpoenas on this basis are therefore granted. C. Relevance In its consolidated Opposition to the Petitions to Revoke, McDonald’s gives scant attention to the Non-Parties’ arguments regarding their burden as third parties in responding to subpoenas, the cumulative or duplicative nature of the subpoenas, and the applicability of the work product privilege. Instead, McDonald’s focuses on an argument that the information sought in its Subpoenas is necessary in order for it to present a defense to the Consolidated Complaint’s allegations regarding joint employer status. As I have discussed in previous Orders, two separate entities constitute joint employers of a single group of employees where the evidence establishes that they “share or codetermine those matters governing the essential terms and conditions of employment,” or “meaningfully affect[]” employment issues such as hiring, firing, discipline, supervision and direction of work. CNN America, Inc., 361 NLRB No. 47, slip op. at 3 (2014), quoting TLI, Inc., 271 NLRB 798 (1984) and Laerco Transportation, 269 NLRB 324, 325 (1984); see also Computer Associates lnt’l, 332 NLRB 1166, 1167–1168 (2000). The Board and the courts have also considered the putative joint employer’s involvement in determining the number of available jobs and setting wage rates and total overtime hours, and its participation in the collective bargaining process, as well as job descriptions, quality improvement, training, staffing levels, and workers compensation insurance. See CNN America, Inc., 361 NLRB No. 47, slip op. at 3, fn. 7; see also Quantum Resources Corp., 305 NLRB 759, 760 (1991); Moderate Income Management Co., 256 NLRB 1193, 1194 (1981); Pacific Mutual Door Co., 278 NLRB 854, 858–859 (1986); Whitewood Maintenance Co., 292 NLRB 1159, 1162 (1989). In addition, General Counsel contends here that McDonald’s coordinated or directed the Franchisee Respondents’ conduct in connection with the employees’ protected and union activities in a manner which tends to prove that McDonald’s “share[s] or codetermine[s] those matters governing the essential terms and conditions of employment,” or “meaningfully affects” employment issues at the Franchisee Respondents’ locations. Thus, General Counsel argues that McDonald’s response to the employees’ activities at the Franchisee Respondents’ locations, and to other aspects of the Charging Parties’ organizing campaign, is relevant on this basis.5 5 McDonald’s raised nine Affirmative Defenses in its Answers. McDonald’s contends that the Complaints contained inadequate conclusory allegations regarding joint employer status which provided it with insufficient notice and deprived it of procedural due process. McDonald’s also contends that the NLRB lacks authority to depart from the common law of agency in its joint employer analysis and that, pursuant to Capitol EMI Music, 311 NLRB 997 (1993), McDonald’s neither knew nor should have known of the Franchisee Respondents’ unlawful conduct. McDonald’s other Affirmative Defenses assert that the General Counsel abused his prosecutorial discretion and deprived it of due process in the consolidation of charges, that the NLRB lacks jurisdiction, that the unfair labor practices were untimely pursuant to Section 10(b) of the Act, and that an inherent statutory conflict between


McDonald’s articulates a convoluted theory based upon this particular assertion of General Counsel’s in order to argue that the vast array of information it seeks is relevant under the rubric of the established joint employer analysis. McDonald’s argues that the Charging Parties’ campaign, comprised in part of the employees’ protected concerted and union activities, in fact constituted an assault against its brand.6 McDonald’s contends in its Opposition that pursuant to the joint employer theory advanced by the General Counsel, McDonald’s had the right to engage in coordinated actions to protect the integrity of its brand. Therefore, any coordination or direction of the Respondent Franchisees’ activities in response to Charging Parties’ purported “brand attack” does not constitute evidence of a joint employer relationship. McDonald’s apparently contends that the materials it seeks via Subpoena from the Charging Parties and the Non-Parties are necessary for it to prove that the Charging Parties’ activities constituted an actual as opposed to a merely perceived “brand attack.” An actual assault on its brand would, according to McDonald’s depiction of General Counsel’s position, divest any evidence of its coordinated response of relevance in the context of the joint employer analysis. At the hearing, however, General Counsel disavowed McDonald’s characterization of his position, and the interpretation of the case law on which it is based. General Counsel stated that in previous cases addressing the alleged joint employer status of a franchisor and franchisee, the Board had found that certain aspects of the franchisor’s control over franchisee operations were intended to ensure a standardized product or customer association, and were therefore not pertinent to joint employer status. For example, in Love’s Barbeque Restaurant, the ALJ found that materials prescribing the recipes for food preparation and the sizes and portions of the menu items offered ultimately did not tend to establish joint employer status, as they “relate to the image, the historical image, of [the franchisor’s] chain,” as opposed to labor relations. 245 NLRB 78, 120 (1979). However, General Counsel stated that he only interpreted the cases as holding that in those particular instances such evidence did not tend to establish joint employer status. General Counsel stated that he did not glean from the Board’s previous joint employer cases involving franchise relationships a general rule exempting everything related to the franchisor’s “brand identity” or other intangibles from the purview of the National Labor Relations Act. Therefore, McDonald’s characterization of the position of General Counsel from which it constructed its “brand assault” theory is inaccurate. In addition, the distinction McDonald’s seeks to draw between an actual and perceived attack on its brand—which it purportedly requires the information sought in its Subpoenas to elucidate—is effectively meaningless given the overall joint employer analysis. In the context of General Counsel’s argument, the salient information is the evidence pertaining to McDonald’s coordination or direction of its franchisees’ activithe Lanham Act and the National Labor Relations Act precludes the NLRA’s applicability. 6 McDonald’s apparently does not contend that the activities of the employees at the Respondent Franchisee locations lost the protection of the Act on this basis.

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ties, in and of itself, in response to the employees’ protected concerted and union activities and the other activities of the Charging Parties. Evidence of McDonald’s conduct in this regard either will or will not tend to establish that it shares, codetermines, or meaningfully affects the terms and conditions of employees at the Respondent Franchisee locations, regardless of the manner in which McDonald’s construed the Charging Parties motivations, let alone the Charging Parties’ actual intent. 7 Furthermore, the motivations of parties engaged in protected concerted or union activity are irrelevant when it is the employer’s response that is the matter “in question” in the case. For example, the Board has squarely held that employees’ motivation for engaging in protected concerted or union activity is completely irrelevant in the context of an allegation that their employer retaliated against them on that basis. See Bettie Page Clothing, 359 NLRB No. 96, slip op. at 1–2 (2013), 361 NLRB No. 79 (2014) (ALJ properly rejected employer’s “conspiracy theory” that employees allegedly discharged in retaliation for their protected concerted activity “schemed to entrap their employer into firing them”).8 I find McDonald’s “brand assault” theory analogous in this respect to the “entrapment” theory asserted by the employer and rejected by the Board in Bettie Page Clothing. Thus, the motivations of the SEIU and the Charging Party Workers Committees are irrelevant to whether the named discriminatees were engaged in protected concerted or union activity, and whether McDonald’s and the Franchisee Respondents, as a joint employer, took certain adverse employment actions against them as a result. The Charging Parties’ motivations are also irrelevant to whether McDonald’s generally coordinated or directed the conduct of the Franchisee Respondents in connection with the Charging Parties’ campaign.9 For all of the foregoing reasons, I find that the information sought in McDonald’s Subpoenas Duces Tecum is not relevant to the issues raised by the Consolidated Complaint’s allegations. I therefore find that McDonald’s has not established a “substantial need” for the materials it seeks in order to prepare its defense in order to overcome the work product privilege. The lack of relevance also militates in favor of granting the Petitions to Revoke, given the burden on Non-Parties consid7 Indeed, the Fast Food Workers Committee and other Charging Parties argue that McDonald’s arcane “brand assault” theory was devised for the express purpose of justifying the sweeping inquiry into the Charging Parties’ and Non-Parties’ activities being attempted via the Subpoenas. See Flaum Appetizing Corp., 357 NLRB 2006, 2010 (2011). 8 In addition, there is no equitable “unclean hands” defense cognizable under the National Labor Relations Act. See Staffing Network Holdings, 362 NLRB No. 12, slip op. at 11 (2015); Woodworkers Local 3-433 (Kimtruss Corp.), 304 NLRB 1 (1991). 9 Nor is there any relevance to the other accusations of misconduct and nefarious intent on the part of the Charging Parties and Non-Parties contained in McDonald’s Opposition, given the Consolidated Complaint’s allegations. Again, it is the conduct of McDonald’s and the Franchisee Respondents that is at issue here; SEIU and the other Charging Parties are not respondents in this matter. Although McDonald’s Opposition is replete with claims of misconduct on the part of SEIU, the Workers Committees, and some Non-Parties, no charges alleging that any of them violated Section 8(b) of the Act were ever filed.

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ered under the Federal Rules of Civil Procedure and the fact that McDonald’s has served Subpoenas on the Charging Parties seeking substantially the same information. D. Issues Specific to NYCC’s Petition to Revoke McDonald’s Subpoena served on NYCC seeks additional materials regarding NYCC’s general operations, employees, funding, and strategies and processes for organizing employees (¶¶ 9, 10, 11, 13, 20). I find that such information is irrelevant to the Consolidated Complaint’s allegations that McDonald’s and the Respondent Franchisees violated Sections 8(a)(1) and (3) of the Act.10 See Interstate Builders, 334 NLRB 835, 841– 842 (2001), rev’d. in part 351 F.3d 1020 (10th Cir. 2003) (revoking subpoena seeking materials regarding union’s internal operations and “organizing practices or ‘salting’ program” as irrelevant to the alleged discriminatory refusal to hire the employees in question); Burns Security Services, 278 NLRB 565, 565–566 (1986) (revoking subpoena requiring the production of documents regarding union’s general operations to purportedly establish that union was affiliated with a non-guard labor organization, and could not be certified pursuant to Section 9(b)(3)). And these materials have absolutely no relevance to the contention that McDonald’s coordination or direction of its franchisees’ conduct in response to the employees’ protected concerted and union activities evinces a joint employer relationship. I therefore find that these materials are not pertinent to the issues raised by the Consolidated Complaint’s allegations, and NYCC’s Petition to Revoke these paragraphs on this basis is granted. E. Additional Considerations I further find, as argued by the Non-Parties, that the Subpoenas served on them would, by virtue of the breadth of the demands for information, result in a chilling effect upon the Section 7 activities of the employees. Where information sought by subpoena or in testimony would disclose the identities of employees engaged in union activity who are not named as alleged discriminatees in a complaint, the Board has held that their confidentiality interests, which are of “overriding concern,” must be balanced against the Respondent’s right to conduct a comprehensive cross-examination. National Telephone Directory Corp., 319 NLRB 420, 421–422 (1995); see also Manorcare Health Services-Easton, 356 NLRB 202, 235– 236 (2010), enfd. 661 F.3d 1139 (D.C. Cir. 2011). Although some paragraphs contained in the Riders to McDonald’s Subpoenas specifically state that the names of employees engaged in protected activity should not be disclosed in the documents produced, other, broader paragraphs contain no such limitation. Given the Subpoenaed materials’ lack of relevance to the issues raised by the Consolidated Complaint’s allegations, as discussed above, and the importance of the employees’ confidentiality interests as articulated by the Board, I find that the poten10 McDonald’s contends that these paragraphs do not seek materials regarding organizing strategy, because no petition for a representation election has been filed. However, the actual filing of a petition is not necessary in order for organizing, or concerted and union activity protected by Sec.7, to have taken place.

tial chilling effect of disclosure on employees’ protected concerted activity outweighs the necessity of the information sought to McDonald’s defense. Finally, I find that a number of paragraphs contained in the Rider to the Subpoenas are overbroad, in that they seek information regarding businesses other than McDonald’s, which have absolutely no relevance to the issues raised by the Consolidated Complaint’s allegations. Thus, for example, the Subpoenas seek materials—including communications with the Charging Parties, government agencies and officials, and the media, documents regarding the engagement of contractors, and research, studies, and publications—regarding not only McDonald’s and its franchisees, but any “franchised and/or fast food businesses.” The Subpoenas also require the production of documents pertaining to communications between the Charging Parties and with current and former employees of McDonald’s and the Franchisee Respondents, to public filings, and to firms engaged in perform work. Furthermore, although the Charging Parties assert that the campaign began in late 2012, and the earliest violation contained in the Consolidated Complaint is alleged to have occurred in September of that year, McDonald’s Subpoenas seek materials beginning in 2009. For all of the foregoing reasons, the Petitions of non-parties the Mintz Group, LLC, LR Hodges & Associates, Ltd., Berlin Rosen, Ltd., and New York Communities for Change, Inc. to Revoke the Subpoenas Duces Tecum served by McDonald’s USA, LLC are granted. Dated: New York, New York April 9, 2015 LAUREN ESPOSITO, Administrative Law Judge. ORDER GRANTING HART RESEARCH ASSOCIATES’ PETITION TO REVOKE MCDONALD’S USA, LLC’S SUBPOENAS DUCES TECUM The Consolidated Complaint and Notice of Hearing in this matter alleges that McDonald’s USA, LLC (“McDonald’s”), as a joint employer with its franchisees (the “Respondent Franchisees”), committed various violations of Sections 8(a)(1) and (3) of the Act in response to their employees’ protected concerted and union activities. McDonald’s and the Respondent Franchisees filed Answers denying the Consolidated Complaint’s material allegations. On March 26, 2015, McDonald’s served a Subpoena Duces Tecum on Hart Research Associates (“Hart Research”), which is not a party to the case. Hart Research describes itself as a survey research firm which conducts public interest surveys and focus group interviews for public and private clients. McDonald’s Subpoena seeks information regarding two surveys conducted by Hart Research. One, conducted on behalf of “Low Pay Is Not OK,” involved what Hart Research describes as “wage theft” experienced by fast food employees. The second, conducted for the National Council for Occupational Safety and Health, addressed onthe-job injuries incurred by fast food employees. On April 2, 2015, Hart Research filed a Petition to Revoke the Subpoena, and on April 9, 2015 McDonald’s filed an Opposition. I find that the issues raised by Hart Research’s Petition to Revoke the Subpoena Duces Tecum are substantially similar


to those raised by the Petitions to Revoke McDonald’s Subpoenas Duces Tecum filed by non-parties the Mintz Group, LLC, LR Hodges & Associates, Ltd., Berlin Rosen, Ltd., and New York Communities for Change, Inc. As a result, for the reasons discussed in my Order dated April 9, 2015 granting the Petitions to Revoke filed by the other non-parties, Hart Research’s Petition to Revoke McDonald’s Subpoena Duces

Tecum is granted. Dated: New York, New York April 15, 2015 LAUREN ESPOSITO, Administrative Law Judge.

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