McDonald's Agrees to $3.75 Million Settlement With California Workers
October 31 2016 - 11:50PM
Dow Jones News
SAN FRANCISCO—McDonald's Corp. has agreed to pay $3.75 million
to settle a federal lawsuit that sought to hold the company liable
for allegations that a franchise owner in the San Francisco Bay
Area cheated hundreds of workers out of wages and overtime.
A lawyer for the workers on Monday called the settlement
agreement filed in court Friday a historic victory for hundreds of
workers, but the company said it settled to avoid further legal
costs.
The lawsuit filed in 2014 in federal court in San Francisco is
among several suits in recent years that have sought a court order
designating McDonald's as the joint employer of workers at its
franchise restaurants.
Franchised locations account for the majority of McDonald's more
than 14,000 U.S. restaurants.
Joint-employer status would make the company, not just the
franchise owners, responsible for working conditions at
restaurants.
The National Labor Relations Board is also arguing that
McDonald's should be considered a joint employer in a separate case
over claims workers at some of its restaurants were subject to
retaliation for taking part in protests and strikes seeking wages
of $15 an hour and union membership. A trial in that case began in
March in New York.
A judge in the San Francisco suit ruled last year that
McDonald's wasn't a joint employer. But he opened a different path
that could be used to hold McDonald's liable for the alleged labor
violations of the franchise owner by allowing the workers to argue
they believed the corporation was their employer.
Joe Sellers, an attorney for the workers, said Monday that the
$3.75 million settlement was "historic" because it marked the first
time that McDonald's committed to paying workers for labor
violations in a franchisee-operated store.
McDonald's spokeswoman Terri Hickey said in a statement that the
company reached a settlement to avoid the costs and disruption of
continued litigation.
"As this court previously ruled, McDonald's is not a joint
employer of its independent franchisees' employees," she said.
"With this agreement, McDonald's reconfirms that it is not the
employer of or responsible for employees of its independent
franchisees."
The lawsuit alleged workers at the five Bay Area McDonald's
franchises didn't receive all their earned wages through September
2013, overtime for overnight shifts, required meal periods and rest
breaks, and reimbursement for time and money spent ironing and
cleaning their uniforms.
It accused McDonald's of controlling the terms and conditions of
employment at the franchises in part by insisting that the owner
strictly monitor and curtail labor costs.
Mr. Sellers said more than 800 workers will benefit from the
settlement. Attorneys previously reached a settlement with the
franchise owner.
Copyright 2016 the Associated Press
(END) Dow Jones Newswires
October 31, 2016 23:35 ET (03:35 GMT)
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