McDonald’s Settles Away a Labor Black Eye in California

by: The Knowledge Group

December 04, 2019


California has long been known as a frontier of liberalism versus the rest of the country. Highly pro-union, democratic-leaning and pushing boundaries on individual rights, the western state has frequently been the poster child of everything far left in the country, figuratively and literally. So it’s a bit of a surprise to find a case like that of McDonald’s being sued by its workers for failing to provide overtime pay, breaks and notification of well-known labor rules in the state.

Since 2013 the fast-food restaurant company has been fighting a lawsuit in the Los Angeles courts alleging that McDonald’s systematically prevented workers from their full compensation when working them past a normal shift, failed to pay the required minimum wage per state law, and failed to consistently provide rest and meal breaks among other claims.

After almost seven years of litigation, the famous burger and milkshake restaurant agreed to settle the labor litigation for $26 million. However, following a standard press release approach to the matter, McDonald’s spokespeople framed the matter as a private dispute, strongly arguing the company was well in compliance with state labor code. Therefore, the settlement was more of a matter of getting people to agree to close the matter and make it go away.

Under the agreement, which still needs the approval of the court, McDonald’s will compensate the involved workers for their lost wages as well as provide required noticing at their restaurants of worker benefits related to overtime pay, breaks and rest. Affected crew members will also get their worn uniforms replaced by the company versus out of pocket. Interestingly, the settlement only applies to corporate-owned locations of the company, which leaves practices that occur at franchises potentially out of compliance with the latest legal changes. Such operations are considered independent businesses, but everyone is aware that McDonald’s still influences a tremendous amount of franchisee behavior through franchise contract terms.