Judge says McDonald's must give employee emails to U.S. labor board

McDonald's Wants Subpoena Tossed

A U.S. judge on Friday gave McDonald's Corp 30 days to hand over thousands of employee emails to a federal labor agency that says the company should be held liable for labor violations by franchisees.

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At a hearing Friday morning, U.S. District Judge Colleen McMahon in Manhattan accused the company of "playing games" in order to avoid complying with a subpoena from the National Labor Relations Board seeking documents from workers who deal directly with franchisees, which the company says would be irrelevant and costly.

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Judge says McDonald's must give employee emails to U.S. labor board
SAN FRANCISCO, CA - APRIL 22: Signs are posted on the exterior of a McDonald's restaurant on April 22, 2015 in San Francisco, California. McDonald's reported a decline in first quarter revenues with a profit of $811.5 million, or 84 cents a share compared to $1.2 billion, or $1.21 a share, one year ago. (Photo by Justin Sullivan/Getty Images)
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A picture taken on January 22, 2014 in Paris, shows the logo of a US fast food restaurant Mac Donald's. Vice-president for finance of McDonald's France Alexis Bourdon reiterated in a statement to the press on January 22, 2014 that the American fast-food giant, suspected of trying to avoid paying taxes on 2.2 billion euros ($3 billion) of income from its 314 French eateries, 'pays all of its taxes' on the 'totality of its revenue', denying a report of French magazine L'Express. AFP PHOTO / KENZO TRIBOUILLARD (Photo credit should read KENZO TRIBOUILLARD/AFP/Getty Images)

"You're not even close to proving that the burden on McDonald's would outweigh the relevance" of the documents, McMahon told the company's lawyers.

The NLRB says McDonald's is a "joint employer" of franchise workers because of the control it exerts over them through guidelines imposed on franchisees.

The case, which is scheduled to go to trial before an administrative judge in January, is expected to have a major impact on U.S. franchisors, potentially forcing them to bargain with unions and pay damages to workers for labor law violations by franchisees.

McMahon on Friday also expressed impatience with the board, telling its lawyers they shouldn't have waited until the eve of trial to seek enforcement of the broad subpoena, which includes nearly 200 separate requests.

The judge rejected the board's demand for records from several McDonald's executives and information on the company's response to a union-backed nationwide protest movement calling for a $15 minimum wage.

NLRB attorney Rachel See said an effort by the company to stifle the campaign could be proof of joint employment, but McMahon called that "a stretch."

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One of the company's lawyers, Willis Goldsmith, said McDonald's could not produce all of the remaining documents in 30 days, since the NLRB also wants employees' personal emails, text messages and phone records.

McMahon told the board it only needed work emails.

McDonald's in a court filing this week said it had already spent more than $1 million producing over 160,000 pages of documents in response to the subpoena.

The January trial is the next chapter in a protracted battle that is likely to end up before the five-member NLRB and then federal appeals courts.

The board in an August decision in Browning-Ferris Industries Inc overturned a 30-year-old standard defining joint employment as "direct and immediate control" over contract employees, saying 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; Editing by Alexia Garamfalvi and Alan Crosby)

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