McDonald’s, Franchisees Facing Worker Lawsuits Over Pay

McDonald’s Corp., the world’s biggest restaurant chain, was sued by workers claiming they’re being idled without pay for minutes and hours at work when demand slackens, in violation of U.S. and state labor laws.

Lawsuits filed in Michigan, California and New York come as the restaurant industry faces increased scrutiny from lawmakers over wages. Last year, thousands of workers across the U.S. at chains including McDonald’s, Wendy’s Co. and Burger King Worldwide Inc. went on strike, demanding $15 an hour in pay and the right to unionize.

“These suits have been filed to stop this widespread wage theft,” Joseph Sellers, a lawyer for plaintiffs in the New York and California cases, said on a conference call today.

Detroit-area McDonald’s employees allege that, in addition to not being paid during times managers deem their locations overstaffed, they are required to pay for their uniforms, which drives their pay below legal minimums, according to two complaints filed today in federal court in Detroit. Sellers, of Cohen Milstein Sellers & Toll PLLC, said some workers also aren’t getting proper meal and break times.

Complaints were also filed in California state courts in Alameda County and Los Angeles County and in federal court in the Eastern District of New York, the law firm said in a statement. Not all the complaints could be immediately be confirmed in court records.

‘Comprehensive Investigation’

“We are currently reviewing the allegations,” Heidi Barker Sa Shekhem, a spokeswoman for Oak Brook, Illinois-based McDonald’s, said in an e-mailed statement. “McDonald’s and our independent franchisees are committed to undertaking a comprehensive investigation of the allegations and will take any necessary actions as they apply to our respective organizations.”

This month in Congress, Democratic Representatives George Miller of California and Joe Courtney of Connecticut sent letters to chains including McDonald’s and Yum! Brands Inc., owner of KFC, seeking information on their franchise agreements, worker-training materials and wage-and-hour law violations.

The U.S. federal minimum wage is $7.25 an hour, and President Barack Obama has asked Congress to boost it to $10.10. Some states require higher pay rates than the current national minimum. McDonald’s has more than 14,200 U.S. stores and about 89 percent of those are owned by franchisees.

Class Action

The Detroit-area workers are seeking to sue on behalf of a class of their co-workers. One defendant franchisee employs 1,000 “crew members,” while the other has hundreds, according to the complaints. Sellers said as many as 30,000 workers could be represented in the cases.

In Detroit, the restaurant employees are challenging what they call “just-in-time” staffing where -- using sales projections based on historical data -- location work schedules are calibrated weekly to maximize profits.

If a day’s sales don’t meet those projections, employees are taken “off the clock” and off payroll for minutes or hours at a time to maintain profit targets, according to the complaints.

“Meanwhile, these workers -- who had been scheduled to work that day -- must wait,” the employees alleged. “They cannot effectively use that time to work at another job or even to enjoy their leisure.”

The workers are seeking unpaid wages, additional compensatory damages and disgorged profits earned as a result of the allegedly unlawful business practices.

The Detroit cases were filed by the Washington law firm of James & Hoffman PC, together with McKnight, McClow Canzano Smith & Radtke PC in Southfield, Michigan.

The Detroit cases are Wilson v. McDonald’s Corp. (MCD), 14-cv-11082, and Pullen v. McDonald’s Corp., 14-cv-11081, U.S. District Court, Eastern District of Michigan (Detroit).

To contact the reporters on this story: Andrew Harris in federal court in Chicago at aharris16@bloomberg.net; Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Andrew Dunn, Charles Carter

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