In March 2014, attorneys representing McDonald’s workers in California and New York filed class action lawsuits in federal and state courts claiming the fast food giant was unlawfully denying payment for work and other benefits required by the law by failing to provide legally mandated meal periods and rest breaks, failing to pay overtime for overnight shifts, and failing to reimburse workers for the time and expense of cleaning required uniforms. The suits demand that McDonald’s pay these wages and stop its illegal theft of workers’ pay.
According to national employment rights specialist Joseph M. Sellers of Cohen Milstein Sellers & Toll PLLC: “Despite reaping tremendous revenues and profits thanks to the labors of crew members who earn at or just above minimum wage, 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 McDonald’s requires them to wear. Not only do its practices cause a substantial financial burden for McDonald’s workers, they violate state and federal minimum wage laws as well as other state labor laws.”
This is not an isolated issue. Shortly before these suits were filed, New York’s Attorney General Eric Schneiderman launched an investigation into pay practices in the state’s fast-food industry, which has turned into groundbreaking litigation in that state. The U.S. Department of Labor has also focused on the fast-food industry as an important element of its strategic enforcement plan.
"We are tired of McDonald's abusive behavior,” said Guadalupe Salazar, a McDonald’s worker and Plaintiff in California who earns about $480 for each 15-day pay period. “The company continues to take advantage of me and my coworkers. We can’t allow them to play by a different set of rules just because they’re big. They need to respect us, and this suit will help them do that.”
Cohen Milstein, along with other experienced employment firms, represents the workers in five cases in California and New York. McDonald’s workers who would like more information about the cases or who would like to speak to an attorney about wage theft at McDonald’s should contact us toll-free by calling 1-800-262-8077.
Cohen Milstein is involved in four suits in California, three of which assert that McDonald’s, in addition to the franchisees that operate the stores, is jointly responsible for denying wages and other benefits to workers in those stores. A fourth case makes similar wage-theft claims on behalf of workers in restaurants that are owned and operated by McDonald’s and for whom there is no dispute that McDonald’s is their employer.
“We’ve uncovered several unlawful schemes, but they all share a common purpose – to drive labor costs down by stealing wages from McDonald’s workers,” said Michael Rubin of Altshuler Berzon LLP, an attorney who filed the lawsuits in California Superior Court in Los Angeles and in Alameda counties. “These McDonald’s workers have courageously stepped forward to shine a light on these illegal practices, and already we’ve begun to hear from several co-workers with similar wage theft claims.”
The California McDonald’s workers are represented by Cohen Milstein and Altshuler Berzon LLP, as well as the Matern Law Group on one of the California cases.
Ochoa v. McDonald’s Corporation & The Edward J. Smith and Valerie S. Smith Family Limited Partnership
In early 2016, the Plaintiffs reached a settlement with franchise owners The Edward J. Smith & Valerie S. Smith Family Limited Partnership (Smith). This settlement has received final approval from the Court, leaving claims against McDonald’s to proceed in litigation.
Approximately six weeks before trial was scheduled to begin against McDonald’s in December 2016, Plaintiff workers and McDonald’s also reached a settlement of the claims against McDonald’s. Earlier in the year, the Honorable James Donato of the U.S. District Court for the Northern District of California denied McDonald’s request to dismiss the case; it further ruled that the Plaintiffs could proceed to trial on the legal theory that McDonald’s could be held jointly liable for workplace violations in the Smiths’ stores because Smith, as a franchisee of the fast food company, was ostensibly an agent of McDonald’s. The Court allowed this theory to proceed on a classwide basis for all hourly workers in Smith’s stores.
The settlement provides class members with over 100% of the economic damages they suffered, as well as a significant portion of the corresponding legal penalties and a portion of the losses the class members experienced on claims that could not proceed as class claims. Significantly, the settlement also leaves in place rulings recognizing McDonald’s liability for the violations of its franchisee under the ostensible-agency doctrine and the hourly crew members’ ability to proceed to trial as a class. In response to media inquiries, Cohen Milstein’s Joseph M. Sellers described the settlement as follows:
“This is a historic settlement and the first case in the country in which McDonald’s has committed to paying workers for labor violations they suffered in a franchisee-operated store. As a result of this settlement, more than 800 workers will receive monetary relief from McDonald’s itself, in addition to more than $500,000 received from an earlier settlement with the franchisee. From these two settlements combined, workers will have recovered more than 100% of their economic losses. Additionally, McDonald’s has agreed to create a training program that will help ensure crew members are properly paid in the future.”
The settlement with McDonald’s has been preliminarily approved by the Court, with final approval expected this summer.
Individuals with questions about either settlements or the certified class should contact us at 1-800-262-8077 (toll free) or Altshuler Berzon, LLP at 1-415-421-7151.
Salazar v. McDonald’s Corporation & The Bobby O. Haynes, Sr. & Carole R. Haynes Family Limited Partnership
The Salazar case, which is substantively similar to the Ochoa case, was filed by Plaintiff workers on behalf of a class of crew members who have worked at stores operated by a different McDonald’s franchisee. After receiving rulings dismissing the Plaintiffs’ individual and class claims by the Honorable Richard Seeborg in the U.S. District Court for the Northern District of California, the Plaintiffs have appealed this case to the U.S. Court of Appeals for the Ninth Circuit. Plaintiffs look forward to the opportunity to litigate the issue of McDonald’s joint-employment liability before the Circuit court and anticipate a favorable ruling for workers within this Circuit.
Individuals with questions about this case should contact Cohen Milstein at 1-800-262-8077 (toll free) or Altshuler Berzon, LLP at 1-415-421-7151.
Hughes v. McDonald’s Corporation & Fremak Arches/Marpenny Corporation
Hughes v. McDonald’s Corporation also raises the issue of McDonald’s liability for workplace violations in stores owned and operated by a franchisee. The parties reached a settlement of this case in the summer of 2016, and the Alameda County Superior Court granted final approval of this settlement on March 24, 2017.
Individuals with questions about this settlement should contact Cohen Milstein at 1-800-262-8077 (toll free) or Altshuler Berzon, LLP at 1-415-421-7151.
Sanchez v. McDonald’s Corporation
On April 20, 2017, after a two week-long Private Attorneys General Act (PAGA) bench trial, the Honorable Ann I. Jones Superior Court of California, County of Los Angeles ruled that McDonald’s Restaurants of California was liable for failure to compensate workers for overtime on overnight shifts at McDonald’s company-run stores, in violation of California labor laws. A trial on damages began on May 23, 2017 and continued into early June. On July 6, 2017, the court issued a statement of decision ruling that McDonald’s was liable to the plaintiffs for $750,000 in damages and penalties under the California Private Attorneys General Act (PAGA). The other claims involved in this case remain pending before the court.
Named plaintiff Maria Sanchez filed the original lawsuit in January 2013, alleging several violations of both state and federal labor laws. A year later, David Cruz, Ines Mendez Merino and Jonathan Valentin joined the suit. The court certified a class of workers who incurred but were not paid for overtime on overnight shifts, and this class claim proceeded through trial, as noted above.
Sanchez’s posture as a PAGA class action is unique; California’s PAGA statute—in which aggrieved employees are effectively deputized as private attorneys general pursuing labor code violations— is still considered novel, and in many respects uncharted. Through the Sanchez litigation, attorneys at Cohen Milstein are helping to establish legal precedents in this area.
Individuals with questions about the class certification or trial should contact us at 1-800-262-8077 (toll free), Altshuler Berzon, LLP at 1-415-421-7151, or Matern Law Group at 855-888-2577.
Cohen Milstein also brought a suit against McDonald’s on behalf of workers in corporately owned New York restaurants. Plaintiffs claimed that McDonald’s failure to compensate and reimburse workers for the time and cost of cleaning their uniforms, which McDonald’s required them to wear and to keep clean, violated New York state law. The workers in this class are represented by Cohen Milstein and Gladstein, Reif and Meginniss LLP.
“Because McDonald’s restaurants pay so little, forcing workers to clean their Golden Arches uniforms on their own dime drives many workers’ wages below the legal minimum,” said James Reif of Gladstein, Reif and Meginniss LLP. “With $28 billion in revenue in 2013 alone, McDonald’s can certainly afford to provide its minimum wage workers with this money to clean their uniforms, as required by law, instead of making them pay for the privilege of wearing McDonald’s advertising.”
On October 31, 2016, the Honorable Nicholas G. Garaufis of the U.S. District Court for the Eastern District of New York granted final approval to a classwide settlement that the parties reached in late 2015. This settlement provides compensation to workers for time and cost spent cleaning their uniforms. Settlement funds were distributed in early 2017.
New York McDonald’s workers who would like more information about the settlement should contact Cohen Milstein at 1-800-262-8077 (toll free), Gladstein, Reif, & Meginniss, LLP at 1-212-228-7727, or Garden City Group (the Claims Administrator) at 1-855-590-8709 (toll free).