Posted by Michaela Jerkowski.
In recent events, McDonald’s Restaurants settled a labor lawsuit pending from 2014, and was ordered in federal court to pay $3.75 million dollars to about 800 employees in California. The lawsuit states that Smith Family LP, who franchised five restaurants in California, “violated California law by failing to pay overtime, keep accurate pay records and reimburse workers for time spent cleaning uniforms.” (Fortune 6). The case was the first time in history that McDonald’s settled a class action law suit that was filed by franchise employees.
Over the past couple of years, McDonald’s has dealt with multiple different problems involving franchise employees. Aside from this multi-million dollar lawsuit, they were also hit with a sexual assault lawsuit involving 15 franchise employees. The McDonald’s corporation has been in and out of court trying to find out whether or not they are considered joint employers with the franchise owners who are causing this backlash with employees.
Although you might think that this lawsuit isn’t much of a high profile case, considering McDonald’s is a billion dollar company, the reason it’s been brought so much attention is because it’s the “the first time the company has settled legal claims by a group of U.S. workers at one of its franchises.”(Time 1). This lawsuit could open doors for many more that may appear in the future, so it would not be a surprise if the company now gets hit with more lawsuits.
Michaela is an accounting major at the Stillman School of Business, Seton Hall University, Class of 2019.
Sources:
http://time.com/4552835/mcdonalds-settlement-labor-law-california/?xid=IFT-Section
http://fortune.com/2016/11/01/mcdonalds-court-settlement-franchise-workers-california/