Wednesday, March 19, 2014

McDonald's workers file suits over wage theft in three states, McDonald's settles for $500,000

This DKos story came out last week.  Apparently McDonald's workers filed lawsuits against the company and several franchise owners in California, Michigan, and New York asserting the company conducted wage theft against the workers.  According to the source story in The New York Times:
In two lawsuits filed in Michigan against McDonald’s and two Detroit-area franchise owners, workers claimed that their restaurants told them to show up to work, but then ordered them to wait an hour or two without pay until enough customers arrived.
Those lawsuits also argued that a McDonald’s requirement that employees pay for their uniforms illegally reduced their pay below the federal minimum wage of $7.25 an hour.
“Our wages are already at rock bottom,” Sharnell Grandberry, a McDonald’s worker in Detroit, said in a news release announcing the suit. “It is time for McDonald’s to stop skirting the law to pad profits. We need to get paid for the hours we work.” 
In three lawsuits brought in California, the workers claim that the McDonald’s restaurants employing them did not pay them for all hours worked, shaved hours from pay records and denied them required meal periods and rest breaks.
Several McDonald’s workers also filed suit in New York, contending that they were not reimbursed for the cost of cleaning their uniforms.
 That was the lawsuit, which the NY Times story was published on March 13th.  In the NY Times story, the lawyers for the McDonald's workers stated that "McDonald’s should be considered a joint employer and share liability with its franchisees, although the (McDonald's) company, like many other fast-food chains with franchises, has argued in the past that it is not a joint employer and should not be liable for its franchisees’ misdeeds on the ground that the franchised restaurants are independently run businesses."  One of the seven lawsuits were filed against the 100 McDonald's restaurants that are owned and operated by the corporation.  The lawyers for the workers were planning to make this into a class action lawsuit, representing around 27,000 current and former McDonald's employees.

And that is why McDonalds Corporation is settling so quickly.  According to The Huffington Post:
New York state has reached a settlement with the owner of seven McDonald's franchises that will give nearly $500,000 to fast-food workers who claimed they were shorted on pay, according to state Attorney General Eric T. Schneiderman.
The attorney general's labor bureau found that cashiers regularly performed off-the-clock work before and after their shifts at the Manhattan restaurants owned by Richard Cisneros. Workers weren't given an allowance for the time and costs associated with cleaning uniforms they had to wear, nor did they receive an extra hour of minimum-wage pay after shifts in which they worked 10 consecutive hours -- requirements of New York law.
The settlement money will go to more than 1,600 current and former McDonald's employees.
None of the restaurants were operated directly by McDonald's, which franchises the majority of its locations.
This works out to around $300 per employee--probably less when you subtract the attorney fees.   And so far, this lawsuit was settled against the franchises, and not McDonald's Corporation.  But the lawsuits are still going on in California and Michigan.

I worked in a fast food restaurant for a number of years, at a place called Fosters Freeze in Campbell California.  I started cooking lunch rush hour french fries at a minimum wage, and worked my way up to supervising night and closing operations at the store.  The work was hot, physically hard, greasy, with long hours and low pay.  It was a small business franchisee, which owned around four Fosters Freeze stores in the South Bay area.  In all the years working at Fosters Freeze, I never had the managers ask me to perform off-the-clock work, nor did I have to pay for, or clean, my uniforms--the company installed a stackable washer / dryer in the store to clean the employee uniforms each night (First time I have ever seen a stackable washer / dryer).  Looking back, it was probably one of the more better run, better managed companies that I've worked at--and this was around 20 years ago. 

Fast forward to today, and you've got a McDonald's franchisee store that is requiring employees to purchase and clean their uniforms? 

Probably the more damaging allegations are of McDonald's workers working off-the-clock, or their waiting for work.  If I ever had to come in for work in Fosters Freeze, I punched in for work.  I did not sit and wait around for enough customers to come in to pay for my time.  In terms of wage theft, one scheme an employer could use is force an employee to perform too many tasks in an eight-hour shift, then force the employee to complete the tasks off-the-clock under the threat of firing--all under the "Do more with less" mantra.  Walmart was famous for engaging in wage theft.  I can't say what schemes McDonald's played in their wage theft against employees, but there is an interesting detail in the NY Times story on the McDonald's lawsuit filing:
The lawyers said most McDonald’s franchisees used software provided by the company that calculates employee-to-sales ratios and instructs restaurants to reduce staffing when sales drop below a certain level in any given hour. As a result, the lawyers said, some McDonald’s workers in the suit were ordered, upon reporting to work, not to clock in for an hour or two and instead wait until more customers arrived.
In several lawsuits, workers contend that they were at times told to clock out but remain in the restaurant or parking lot for an hour to two after business slowed down — perhaps when business slackened after the breakfast rush — so they could be on hand to clock back in when hourly sales picked up.
Jason Hughes, a McDonald’s employee in Fremont, Calif., said sometimes he was ordered to punch out soon after starting work and to hang around unpaid. “I’d have to be ready to punch in as soon as the store gets busy,” he said. “When the store is understaffed, our management would tell us we can’t take our breaks.”
So the McDonald's franchisees uses a corporate software program to calculate employee-to-sales ratios, which instructs the franchisee owner to reduce employee labor when sales drop below a required hour.  I'm guessing this corporate software program looks at the employee-to-sales ratio at a given hour, and not on an eight-hour-per-day shift ratio.  At a given McDonald's store, there would be a breakfast rush, which would then slow down for a time period until the lunch rush crowd shows up.   The corporate software would push this employee-to-sales ratio to the absolute minimum per hour, or there would probably be some kind of corporate punishment against the franchisee owner.  Thus, the franchisee owner would engage in such practices of employees to show up for work without clocking in, or clocking out, but remain on company premises during the slow time, so they could clock back in when the rush started.  When I worked at Fosters Freeze, we had our lunch and dinner rushes, and our slow periods.  When it was slow, we would perform all the prep work of cleaning, and restocking food for the next rush.  When all those tasks were completed, there were certainly times we would wait on company time for the next rush.  The managers knew what happened.  If it was too slow, the managers would let some employees home early, or take longer lunch breaks--but never force the employees to wait on company premises. 

This company software program could be especially damaging to McDonald's corporate.  It really depends on how far reduced the employee-to-sales ratio is that the corporation is forcing on the franchisees.  If it is an impossible ratio, then the individual franchisees can't adapt to the ratio, depending on their individual hourly store sales and rushes.  Any direct relationship between this corporate software program and the franchisees direct actions of wage theft could clearly show that McDonald's corporation is also responsible for employee wage theft, as it is their corporate software that is forcing such unrealistic demands on their franchisees.  

I wonder if McDonald's corporate is trying to sweep these lawsuits under the fast food floor mats?

There is only so far that you can push efficiency--push the "Do more with less" meme.  Beyond that point, you run the risk of failing to adapt to the random, daily changes that may occur.  Or you run the risk of engaging in illegal practices to keep up with this endless efficiency quest.  As fast food workers are continuing to fight for higher living wages against McDonald's and other companies, something tells me we're not going to see the end of these lawsuits. 

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