Insights into the Workers’ Plan to Sue McDonald’s

McDonald’s may be known for its low prices, but if the allegations in several wage theft lawsuits filed against the company are true, the practices enabling such low prices may leave a bad taste in the mouths of consumers. After 2013 saw some of the largest organized strikes of fast food workers across the United States, workers shifted to a different strategy in 2014, with workers in California, Michigan, and New York accusing McDonald’s of engaging in illegal labor practices resulting in workers being paid below minimum wage.

Among the allegations in the labor lawsuits are that McDonald’s forced workers to pay for their own uniforms and other essential work wear, prevented them from taking breaks, refused to let them be on the clock for time they were at the restaurant just before and just after scheduled shift times, denied overtime pay, and had workers perform unpaid work.

Unfortunately for the workers, this lawsuit may be more complex than it appears. Typically, illegal labor practice lawsuits are launched by employees against the company that directly employs them. But rather than suing individual franchisee locations which employ them, the workers are suing McDonald’s, which in most cases does not own the restaurants that employees allege acted illegally.

While the franchise system may offer benefits to local owners and may not appear to impact the dining experience for consumers, the setup can actually have significant legal consequences. Having a franchise owner operating under the main corporation creates a certain level of separation that makes it difficult to pin liability on the corporation for the acts of its franchisees. This is distinctly different from the way in which the law typically allows plaintiffs to assign liability to controlling parties — such as holding employers responsible for the actions of their employees. Commonly, this theory of vicarious liability allows plaintiffs to recover from a corporation due to an employee’s actions.

But in the franchise context, the relationship is different and typically, the ultimate corporation – such as McDonald’s here – may be insulated from liability because of the significant control the franchise owner has over the operation. For its part, McDonald’s would suggest that it merely lent its name and some minor support to the franchisee, so it should not be held responsible in court. In fact, the McDonald’s franchise contract makes it clear that it is in no way a partner with the franchisee.

In these wage lawsuits, however, the plaintiffs hope to successfully argue that McDonald’s exerted enough control – including dictating hours of operations, menu items, special offers, and more — that it can be held responsible for the labor abuses that eventually occurred.