SAN FRANCISCO (CN) – A federal judge Thursday told attorneys for a class of fast-food workers he does not believe McDonald’s can be held liable for claims of wage theft.
Led by cashiers Guadalupe Salazar, Genoveva Lopez and Judith Zarate the class sued McDonald’s and franchise owner Bobby Haynes in March 2014, saying they were denied meal and rest breaks and were not paid for all the hours they worked because McDonald’s computer system killed overtime from their time cards.
But U.S. District Judge Richard Seeborg said the class failed to show that McDonalds exercises enough control over the day-to-day operation of its franchisees to be considered their employer. Seeborg said at the Thursday hearing that he was inclined to grant McDonald’s’ motion for summary judgment on vicarious liability.
“McDonald’s is simply not a joint employer. I think the undisputed facts are pretty clear. The basic working condition arrangements are with Haynes and not McDonald’s,” Seeborg said.
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 in the Northern District of California.
In Ochoa, U.S. District Judge James Donato found that McDonald’s did not directly employ the plaintiffs, as all staffing decisions were made by franchise owner Edward J. Smith and Valerie S. Smith Family Limited Partnership.
“The Ochoa case, while not binding on me, is quite persuasive,” Seeborg said.
Class attorney Barbara Chisholm disagreed.
“The court got it wrong in Ochoa,” she told Seeborg. Chisholm said McDonald’s is indeed a joint employer, and that it exercised, at the very least, indirect control over the Haynes restaurants by setting requirements for staffing and scheduling. A business consultant visited the restaurants every so often, and in their depositions, Chisholm said, both Salazar and Zarate said they saw the consultant correct employees and shift managers on how to do their jobs. They also allegedly told Haynes not to let employees take breaks during busy times.
Seeborg seemed unpersuaded. As to hiring, firing, supervision and discipline of employees — the factors that create a direct employer relationship — Seeborg said: “At the end of the day, the Haynes get to make the choice.”
But Chisholm said there are unresolved questions about whom the plaintiffs believed they were working for. She said that when Salazar was asked about Haynes, she was told that Haynes is part of McDonald’s.
“The confusion as to who really is their employer and whether Haynes is part of McDonald’s is highly reasonable,” Chisholm said. “These are low-wage workers we’re talking about.”
McDonald’s attorney Lawrence DiNardo said that the Haynes family viewed McDonald’s training programs and operating procedures as suggestions, not requirements.
DiNardo said McDonalds did not have the kind of power to be considered a joint employer with Haynes.
“The notion of indirect control here is that by some device you still have the power to hire fire, set wages, etc. It’s not just that you have an influence on those matters,” he said. “That’s not enough to make you an employer under the Labor Code.”
Seeborg did not indicate when he would rule.
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