U.S. District Judge Richard Seeborg denied the 1,200 workers class certification under the theory of ostensible agency, where a franchisor can be believed to be acting on behalf of the parent company.
Cashiers Guadalupe Salazar, Genoveva Lopez and Judith Zarate, sued McDonald’s and franchise owner Bobby Haynes in March 2014, claiming they were denied meal and rest breaks and that McDonald’s miscalculated their wages.
The Haynes Partnership has owned eight franchises in Oakland and San Leandro since 2010.
Ruling on McDonald’s motion for summary judgment back in August, Seeborg observed that Haynes controlled hiring, firing, discipline, wage-setting and the employees’ general working conditions. Seeborg dismissed the workers’ claims against McDonald’s based on actual agency because McDonald’s didn’t make direct personnel decisions.
The Haynes Partnership settled with the workers in 2015, allowing the class to go forward on the ostensible agency claim against McDonald’s, but Seeborg ruled there isn’t enough evidence to show a common set of circumstances classwide.
“Even interpreting broadly the rule that ostensible agency may be inferred from circumstances, plaintiffs’ factual showing falls short,” he said.
Though their attorneys argued that the workers wore McDonald’s branded uniforms, received paychecks bearing the McDonald’s logo, received McDonald’s orientation packets and watched McDonald’s training videos, Seeborg said some workers received different information that led them to believe Haynes was their employer.
“These differences preclude an inference of common belief among class members. Indeed, the record shows that some class members understand that McDonald’s does not employ them, while others do not,” Seeborg wrote.
“Here, the information that any crew member knew or should have known varies. For example, some crew members are told at or near the time of their hire that they were employees of Haynes and/or that they were not employees of McDonald’s,” he added. “Some of Haynes’ family members tell new hires that Haynes is their employer during new-hire orientation conducted at Haynes’ offices. Likewise, some shift managers and general managers tell crew members that the Haynes family owns their restaurant.”
Attorney Michael Rubin with Altshuler Berzon, who represents the workers, said Seeborg’s ruling may have a silver lining, as the workers will be able to present their joint-employer theory to the Ninth Circuit.
“We’re disappointed, but in the long run it may be for the best,” Rubin said in an interview Thursday. “The key issue in this case has always been McDonald’s liability as a joint employer. Ostensible agency was never our principal legal theory, but it gave us two bites at the liability apple. The consequence of Seeborg’s ruling is undoubtedly that we will get the principal joint-employer issue adjudicated much more quickly with far less expenditure of time and money than if we first went through a classwide ostensible agency trial.”
McDonald’s attorney, Lawrence Di Nardo with Jones Day, did not respond to a phone request for comment.