With Joint Employer Cases Pending, McDonald's Settles with Franchisee Employees

For the first time, McDonald's has ceased fighting a joint employer legal action and agreed to a $3.75 million settlement with franchisee employees over a wage dispute. The burger corporation was facing a lawsuit in San Francisco and a battle with the National Labor Relations Board (NLRB) over the issue of whether it was a joint employer responsible for the actions of its franchisees, but it blinked. Now some 800 McDonald's workers in San Francisco will split $1.75 million, while the lawyers arguing their case will pocket $2 million. The San Francisco area workers alleged in their lawsuit that they believed they worked for the head corporation because their paychecks and uniforms all bore the McDonald's logo. Still pending is another wage lawsuit filed by 1,200 employees, also in San Francisco, where a federal judge is expected to rule on the suit's class action status in December. In the past few years, McDonald's has beat back similar joint employer legal actions. Being a joint employer means the corporate franchisers would be responsible jointly with the franchisees for legal issues.