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McDonald’s failed to show law judge abused discretion in NLRB subpoena enforcement dispute

By Ronald Miller, J.D.

McDonald’s failed to establish that an administrative law judge abused her discretion in granting in part the NLRB General Counsel’s motion for production of additional documents and determining that a court-enforced subpoena required McDonald’s to search for and produce the additional information specified in her order, ruled a divided NLRB in a 2-1 decision. In so ruling, the Board granted McDonald’s request for special permission to appeal, but on the merits denied the appeal. Member Miscimarra filed a separate dissenting opinion (McDonald’s USA, LLC, November 10, 2016).

Dispute over obligations under subpoena. This case involved whether fast food giant McDonald’s was a joint employer liable for unfair labor practice charges allegedly committed by 30 franchise employers. On February 9, 2015, the General Counsel issued a subpoena seeking certain information from McDonald’s. Thereafter, a dispute arose concerning McDonald’s obligations under the subpoena, and the General Counsel initiated enforcement proceedings. On October 30, 2015, a federal district court ordered that the subpoena be enforced in part. With regard to document custodians covered by the subpoena, the court ordered that the subpoena be enforced in full with respect to the 28 custodians initially identified by McDonald’s. Similarly, the subpoena was enforced with respect to the “20″ operations consultants who worked with 29 franchisees during the three years covered by the subpoena and with McDonald’s vice president for USA Franchising.

In the months following the partial enforcement of the subpoena, McDonald’s continued to dispute the scope of its obligations. On April 26, 2016, the General Counsel filed a motion for additional production of documents pursuant to the court-enforced subpoena. On June 15, 2016, an administrative law judge issued an order granting in part and denying in part the General Counsel’s motion, including a search of all emails addresses used by the custodians.

Authority of administrative to enforce subpoenas. In its request for special permission to appeal, McDonald’s indicated that it had agreed to comply with several aspects of the ALJ’s order but still contested certain aspects of the order, including repeat searches. McDonald’s argued that an ALJ is without authority to either enforce subpoenas or to issue sanctions for noncompliance; that the ALJ erroneously concluded that McDonald’s did not fulfill its duty to preserve potentially relevant documents; failed to consider the burdensomeness of compliance with the subpoena; and the ALJ exceeded her authority in ordering relief that conflicted with the district court’s order.

However, the Board rejected McDonald’s challenges and found that the law judge’s order fully comported with the scope of the subpoena as enforced by the district court, and that the ALJ had the authority to rule on the General Counsel’s motion. The Board observed that the court- enforced subpoena required McDonald’s to search various sources for responsive materials, including personal emails, text messages, and other sources listed in ALJ’s order.

Burdensomeness not established. Further, the Board determined that McDonald’s was mistaken in arguing that the district court limited the scope of the subpoena with respect to the potential sources of information, such as certain email or other communication on personal accounts or devices. Rather, the Board observed that the court declined to enforce the subpoena with respect to third parties and certain document custodians sought by the General Counsel, but did not otherwise limit the scope of the subpoena with respect to the 52 custodians included in the order. Moreover, because the documents named in the law judge’s order were consistent with what the district court ordered McDonald’s to produce, the Board concluded that McDonald’s could not properly raise burdensomeness, nor did it believe that McDonald’s had established the undue burdensomeness of the ALJ’s production order.

Dissent. In a dissenting opinion, Member Miscimarra argued that the ALJ had indeed exceeded her authority by issuing the order granting the General Counsel’s motion for additional production. According to Miscimarra, the district court was responsible for addressing the extent of McDonald’s production obligations pursuant to the subpoena, and it appeared clear that the present disputes involved questions regarding the scope of the district court’s rulings and whether McDonald’s had failed to comply with those rulings. Accordingly, the dissent argued that those questions should be addressed by the district court and not the Board.