Category: wages

The fast-food giant agreed to pay $3.75 million in back wages and attorneys’ fees to about 800 McDonald’s workers at franchise locations in the Bay Area.

Disgruntled workers filed the lawsuit in March 2014, alleging, inter alia, that franchise owner Smith Limited Partnership failed to provide meal and rest beaks as provided by California law. Even though the McDonald’s Corporation has no direct control over wage, hour, and other employment law issues at franchise locations, the plaintiffs named the corporation as a defendant, under the theory that it jointly employed the workers along with the franchisee and therefore was responsible for such matters. In a statement,the company denied that it was a joint employer and insisted that the settlement was simply a business decision to avoid litigation costs. The settlement does not contain an admission of liability.

This case may be the first incident of a franchisor accepting responsibility for wage and hour issues at franchise locations.

Franchisor Liability

Ever since it was first announced, the joint employer rule has been harshly criticized by business groups. Several months ago, the National Labor Relations Board asked a federal judge in Chicago to declare that McDonald’s is a joint employer along with its franchisees; that case is currently on hold.

Joint employment is common not only in franchise locations, but also in warehouses, construction sites, and hotels. To determine if there is vertical joint employment (e.g. franchisor and franchisee), the court can examine  number of factors, including:

  • Control over Work: Does the proposed joint employer have the power to make the direct employer perform a certain type of work in a certain manner?
  • Control over Conditions: Does the proposed joint employer have the power to hire, fire, and set wages?
  • Permanency: Long-term agreements between companies point to joint employment, because one employer is economically dependent on the other.
  • Nature of Work: If the work performed is routine and rather unskilled, there is probably a joint employer relationship.

Other factors include whether the work is performed on the premises and whether the direct employer is economically independent from the proposed joint employer.

California Wage and Hour Laws

In addition to complying with the federal government’s rules, employers in the Golden State must comply with the standards set forth in Brinker Restaurant v. Superior Court (2012). Under California law, non-exempt workers are entitled to:

  • One half-hour meal break for every five hours worked; workers must have the option to leave the premises during these breaks and employers cannot interrupt them.
  • A ten-minute paid break every four hours; to the greatest extent possible, these breaks must be in the middle of the four-hour period.

Some employees can get paid for their meal breaks if they agree to be available for work and remain on premises at or near their workstations during the half hour. The rest break/meal break law is just one area where California law is considerably more worker-friendly than federal law.

Unfairly-treated California workers may have a remedy against both direct and joint employers. For a free consultation with an experienced employment law attorney in San Jose, contact the Briski Law Firm. We routinely handle cases in Santa Clara County and nearby jurisdictions.