McDonald's Pays $26 Million to Settle Wage Lawsuit in California
McDonald’s Corporation has agreed to pay $3.75 million to settle a California employment lawsuit claiming that it was liable for labor law violations by a franchisee. According to a report in the Insurance Journal, this marks the first time the company has settled legal claims made by a group of U.S. workers at one of its franchises. Lawyers representing about 800 employees at five restaurants owned by a single franchisee in California said McDonald’s would pay the workers $1.75 million in back pay and damages and $2 million in legal fees.
Why This Case is Significant
A federal judge must still approve the settlement. It comes at a time when McDonald’s is facing claims before two U.S. agencies that it is a “joint employer” of workers at franchise restaurants. This is significant because it could make the company liable for legal violations by franchisees and even require it to bargain with workers who unionize. Despite reaching the agreement, McDonald’s is maintaining that it is not a joint employer of franchise workers. A spokeswoman told the Insurance Journal that the corporation entered into a “mutually acceptable resolution to avoid the costs and disruption associated with continued litigation.”
This particular class-action lawsuit, which was filed in 2014, claimed that McDonald’s and its franchisee, Smith Family LP, violated California laws by failing to pay workers overtime, keep accurate pay records and reimburse workers for time spent cleaning uniforms. The franchisee previously settled those claims for $700,000. Last year, a judge made the determination that McDonald’s was not the plaintiffs’ joint employer, but that the company could still be held liable if the workers believed that McDonald’s was their employer. This is the first settlement for McDonald’s in a class action case brought by franchise employees.
Protecting Workers’ Rights
California has some of the strongest employee protections in the country when it comes to wage and hour issues. Workers in California have the right to meal and rest breaks, overtime after eight hours of work in a day, and a minimum wage that is higher than the federal standard.
If you believe that your employer has failed to pay you minimum wage, failed to reimburse you for overtime hours worked or has misclassified your position to avoid paying overtime or a fair wage, it is important that you know and understand your rights. Contact an experienced California employment lawyer who will fight hard to protect your rights and help you seek and obtain the compensation you rightfully deserve.