October 27, 2015 / 7:00 PM / 4 years ago

UPDATE 1-McDonald's asks judge to toss out U.S. labor board's 'massive' subpoena

(Adds NLRB comment)

By Daniel Wiessner

Oct 27 (Reuters) - McDonald’s Corp has asked a U.S. judge to reject a subpoena from the National Labor Relations Board in its case claiming the company is a “joint employer” of franchise workers, saying the requests are unfair and costly.

In a filing in U.S. court in Manhattan on Monday, McDonald’s said it had spent more than $1 million over the last few months producing over 160,000 pages of documents in response to the subpoena, even though the company says it will owe no more than about $50,000 if it is found liable for alleged labor violations at 29 franchises in five states.

While McDonald’s is not facing a large payout to workers, the case is critically important to the fast food company and other franchisors, since a finding of joint employment would force them to bargain with unions and could impact the very basis of the franchise model.

The NLRB’s general counsel, which is comparable to a prosecutor’s office, is seeking emails and other documents from more than 50 McDonald’s executives and employees who work directly with franchise owners.

“The General Counsel’s subpoena to McDonald’s is, we believe, one of the most burdensome in the history of the agency,” the company’s lawyers wrote.

The filing came ahead of a Thursday court hearing before U.S. District Judge Colleen McMahon. A trial in the underlying case is scheduled to begin before an NLRB judge in New York in January. The dispute, which will likely end up before the five-member board and then federal appeals courts, could drag on for years, McDonald’s said on Monday.

The general counsel’s subpoena also seeks information on McDonald’s involvement in countering union-backed nationwide protests seeking a $15 minimum wage for fast food workers, which it says could indicate a joint employment relationship.

An NLRB spokeswoman said on Tuesday McDonald’s had caused “an unnecessary delay” in the case by challenging the subpoena.

NLRB lawyers in court papers filed in September said the subpoena stemmed from evidence the general counsel had already uncovered suggesting McDonald’s exerts a significant amount of control over the working conditions of franchise employees.

The board in an August decision in Browning-Ferris Industries Inc tossed out a 30-year-old standard defining joint employment as “direct and immediate control” over contract employees. The NLRB said that even the potential to control factors such as wages and discipline could be enough.

The case is NLRB v. McDonald’s USA LLC, U.S. District Court for the Southern District of New York, No. 1:15-mc-0322. (Reporting by Daniel Wiessner in Albany, New York; Editing by Alexia Garamfalvi, Christian Plumb and Marguerita Choy)

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