McDonald's settled, for $3.75 million, a federal lawsuit alleging that a franchise owner in the San Francisco Bay Area cheated hundreds of workers out of wages and overtime. Approximately 800 workers should be covered by the settlement.
The lawsuit was filed in 2014 in federal court in San Francisco. It sought a court order designating McDonald's as the joint employer of workers at its various franchise restaurants. Joint employer status means that the company (not just individual franchisees) is responsible for working conditions at restaurants.
The lawsuit alleged workers at the five Bay Area McDonald's franchises did not receive their full 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. McDonald's was accused of controlling the terms and conditions of employment at the franchises in part by insisting that the owner strictly monitor and curtail labor costs.
In 2015, however, a judge ruled that McDonald's was not a joint employer. Nevertheless, the judge allowed the employees to argue they believed McDonald's was their employer.
McDonald's spokeswoman Terri Hickey said in a statement that the company reached a settlement in order to avoid the costs and inconvenience of continued litigation. She stressed that the court had previously ruled that McDonald's is not a joint employer of its independent franchisees' employees.
