McDonald's Overtime Lawsuit Granted Class Action Status

Sacramento, CAA California overtime lawsuit filed against McDonald's has been granted federal class action status. Although McDonald's tried to argue that it was not responsible for ensuring the pay of employees at its franchise restaurants, the judge agreed to grant class action status to the up to 500 employees who filed complaints against McDonald's in northern California.

According to The New York Times (7/15/16), the lawsuit was filed in 2014. In it, employees alleged that five McDonald's restaurants, all of which were owned by the same franchisee, broke wage and hour laws, including failing to pay overtime, failure to pay minimum wage, and reducing pay by falsely recording information on timecards.

The lawsuit was filed against both the franchisee and McDonald's corporation. The franchisee has reportedly already settled for around $700,000, leaving McDonald's to cover whatever the courts find remains owing.

McDonald's argued it could not be held responsible for how its franchisees manage pay, but the lawsuit alleged McDonald's own overtime-tracking software was preprogrammed to reduce employee overtime pay in certain situations. For example, the software was designed to assign all hours worked to the date a shift started, regardless of whether the hours occurred on that date. Employees that worked overnight and into early hours had the shift count toward the date the shift started, rather than having the hours on the actual date worked. In such circumstances, the employee could work more than eight hours within 24 hours, but because the software counted the shifts as occurring on two days, overtime pay was not given.

The judge noted in his ruling that employees were required to wear McDonald's uniforms, packaged food in McDonald's boxes, received information on their shifts on documentation marked with McDonald's logos, and often applied for their jobs through the McDonald's website.

"Significantly, on the other side of the ledger, McDonald's has submitted no evidence at all indicating that any named plaintiff or putative class member did not believe that McDonald's was their employer or that they were unjustified or unreasonable in relying on that belief," Judge James Donato wrote.

Although parts of the motion for class action were dismissed, the allegations of miscalculated wages claims, overtime claims, and maintenance-of-uniform claims were granted class action status.

The lawsuit is Ochoa, et al. v. McDonald's Corp., at al. case number 3:14-cv-02098 in the US District Court, Northern District of California.