Wave of class action suits brought against McDonald's for wage theft

March 13, 2014 | by Alicia Kelso

McDonald's has been accused of systematic wage theft by an estimated tens of thousands of employees in California, New York and Michigan.

On a conference call today, attorneys in each state spoke about the accusations brought forth, and the consequent lawsuits that have been filed against the QSR giant. Among the accusations are:

  • Requiring employees to perform work that was never paid; off clock work;
  • Denying (California) workers timely breaks;
  • Denying overtime pay; 
  • Forcing (Michigan) employees who "barely earn minimum wage" to buy their own uniforms.

Because of some of these practices, employee pay levels "often fall below federal and state minimum wage" requirements, according to Joe Sellers, co-counsel in the lawsuits filed in California and New York.

"McDonald's is unlawfully failing to pay its workers for all the hours they work and for necessary expenses they incur relating to the uniform they're required to wear," he said. "Not only do its practices cause a substantial burden for workers, they violate state and federal minimum wage laws."

'Evidence of corporate control'

Two of the lawsuits have been brought against McDonald's Corp. directly, naming corporate-owned stores. The others include franchisees and the parent company.

Attorneys said on the call that there is evidence the parent company has "exerted control over these restaurants that makes it jointly responsible for these practices."

One of the most egregious accusations involves software monitoring of labor costs in real-time.

Attorney Edgar James, who brought forth the two cases in Michigan on behalf of about 1,500 employees at two Detroit area franchised locations, said it is common for an employee to show up for work and be told not to clock in until this real-time data shows that labor costs have gone below a certain percentage number. The software that measures this data exists systemwide, he said.

Uniform policies have also caused a financial burden for employees, the plaintiffs claim. Attorney Jim Reif, who filed the suit in New York, said the state's regulations require specific payments in specific amounts to workers who are required to wear uniforms. However, he claims, McDonald's doesn't issue uniform maintenance pay.

"If you start a worker at minimum wage and make them spend time and money cleaning their uniform — many have to do so three or four times a week separately from their own personal clothes — the consequence is forcing them to work off the clock and spend money out of their own pocket, which is when they wind up below minimum wage," he said.

Why McDonald's, why now?

These wage theft lawsuits are an extension of the growing number of strikes throughout the country held by employees asking for higher wages. Reif said McDonald's can afford to provide its workers to clean their uniforms, since it made $28 billion in revenues in 2013.

Catherine Ruckelshaus, general counsel at the National Employment Law Project, said this move was necessary to address the "consistent abuses in the fast food industry."

"This rampant noncompliance affects everybody," she said. "The average workers lose more than $2,600 a year due to wage theft, which is a significant portion of their already paltry paycheck. Recouping this isn't just a matter of justice, it's about communities suffering. The less money they bring home, the less they have to spend and it deprives local business of much-needed consumers."

Attorneys said McDonald's was named specifically because there have been enough complaints brought forth to disprove a "coincidence" factor.

"McDonald's is an industry leader and we're hoping these cases will not only change the practices of McDonald's, but also the behavior that is imitated by other companies and lead to a change throughout the industry," Sellers said.

"If you're going to engage in franchising, you need to make sure you're doing it responsibly and pay attention to your workers," Ruckelshaus added. "If McDonald's is going to engage with low-capitalized franchisees and impose a lot of restrictions, it can't do so without being held responsible."

The plaintiffs' attorneys said they continue to receive inquiries and more suits may be coming, including against other restaurant companies.

They said the plaintiff referrals have been brought forth by a number of local organizations that address workplace issues, rather than one specific organization. They declined to disclose who was paying for attorney fees.

Specifically, seven suits have been filed this week; six of which are new and one in California that is seeking to amend a complaint already on file. Four of those cases are in California and are state cases. Two are in Michigan and are federal cases with state class. And the New York case is filed in federal court with state class.

All of the cases are seeking backpay and potentially liquidated damages. Attorneys said these equate to a "substantial amount" of damages for the tens of thousands of employees, but did not specify how much, exactly, is at stake with the lawsuits.

McDonald's response

Following today's conference call, McDonald's issued the following statement:

"McDonald's and our independent owner-operators share a concern and commitment to the well-being and fair treatment of all people who work in McDonald's restaurants. We are currently reviewing the allegations in the lawsuits. McDonald's and our independent franchisees are committed to undertaking a comprehensive investigation of the allegations and will take any necessary actions as they apply to our respective organizations."

Topics: Franchising & Growth , Operations Management , Staffing & Training

Alicia Kelso / Alicia has been a professional journalist for 15 years. Her work with FastCasual.com, QSRweb.com and PizzaMarketplace.com has been featured in publications around the world, including NPR, Good Morning America, Voice of Russia radio, Consumerist.com and Franchise Asia magazine.
View Alicia Kelso's profile on LinkedIn

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