SAN FRANCISCO (CN) - A wage-theft class action against McDonald's will proceed, a federal judge ruled, though he remained unconvinced that McDonald's Corp. exercises enough control over working conditions in its franchises to be liable for fair wage and overtime claims.
"McDonald's did not exercise direct or indirect control over plaintiffs' wages, hours, or working conditions," U.S. District Judge Richard Seeborg wrote in his Tuesday order, adding that the corporation's operating standards protect the integrity of the McDonald's brand, but exclude hiring, firing, discipline and other personnel decisions.
But he also said a jury could find McDonald's a joint employer under the "ostensible agency" theory, since workers hold the reasonable belief that they are employed by McDonald's. "Though it is a close call, particularly as plaintiffs are long-term employees, viewing the evidence in the light most favorable to plaintiffs, a jury could reasonably find McDonald's to be a joint employer by virtue of an ostensible agency relationship," Seeborg said.
Led by cashiers Guadalupe Salazar, Genoveva Lopez and Judith Zarate, the class sued McDonald's and franchise owner Bobby Haynes in March 2014, claiming they were denied meal and rest breaks and were not paid for all the hours they worked because the McDonald's computer system killed overtime from their timecards.
The Haynes Partnership has owned eight franchises in Oakland and San Leandro since 2010. Seeborg noted that Haynes controlled hiring, firing, discipline, wages and general working conditions, much like the franchisees in Ochoa v. McDonald's Corp., another wage and hour class action filed in the Northern District of California.
The Ochoa case is set to go to trial on Dec. 5 on the same ostensible agency theory.
"Looking at the record, there is considerable evidence, albeit subject to dispute, that McDonalds [sic] caused plaintiffs reasonably to believe Haynes was acting as its agent," Seeborg wrote. "To begin, plaintiffs uniformly declare they believed both they and Haynes worked for McDonalds. They also must wear McDonalds uniforms, prepare and serve McDonalds food in McDonalds packaging, and greet customers by saying 'Welcome to McDonald's.' Plaintiffs' managers, who were subject to training by McDonalds and interacted regularly with McDonalds consultants, wore McDonalds' uniforms, and referred to themselves as 'working for McDonald's.'"
"Although plaintiffs were disappointed that Judge Seeborg did not deny McDonald's summary judgment motion in full, it should make no practical difference," class attorney Michael Rubin said in an email. "If plaintiffs prevail on our ostensible agency theory at trial, we will have no need to appeal the ruling on our other liability theories. And if we do not prevail at trial on ostensible agency, we have very strong grounds for appeal given the many disputed issues of fact that we believe are material to McDonald's 'joint employer' status."
McDonald's attorney Lawrence Di Nardo did not respond to an email request for comment.
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