"McDonald's Settles Franchisee-Worker Class Action As Legal Protections Erode," Investor's Business Daily
October 31, 2016
McDonald's (MCD) just lost a battle in its legal war to shield itself from liability over the treatment and wages of the roughly 750,000 U.S. workers employed by its franchisees.
The Golden Arches agreed to pay $3.75 million to settle a class-action lawsuit brought by workers of five restaurant-franchise operators over unpaid overtime and other labor violations. The settlement, revealed by plaintiffs' lawyers in a Friday court filing, is the first of its kind between McDonald's and franchisee workers and reflects a weakening of the legal protections for franchise chain operators.
McDonald's shares were up 0.4% to 112.57 at the close on the stock market today.
McDonald's is the prime target in the National Labor Relations Board's attack on the franchise industry as it aims to label the fast-food empire a "joint employer" of franchisee workers, upending the legal protections that have fueled the growth of franchising.