McDonald’s Not the ‘Employer’ in Franchise Labor Cases

McDonald’s Corp. can’t be held liable for labor law violations by its various franchise owners, a federal appeals court held Tuesday.

The 9th US Circuit Court of Appeals upheld dismissal of a lawsuit by 1,400 workers claiming they were denied overtime premiums, meal and rest breaks by owners of franchises in the San Francisco Bay Area.

McDonald’s was not an employer with “control over the wages, hours, or working conditions” according to the court.

Based on California court precedents, McDonald’s cannot be classified of its franchisees’ workers, even though the company was aware that the Haynes family, the franchise owners, were violated California wage and hour laws.

In a partial dissent, Judge Sidney Thomas held that he would have revived the portion of the lawsuit about whether McDonald’s could be held liable as a joint employer at a franchise if it did permit violations to occur.

The opinion by Judge Susan Graber was joined by Judge Andrew Kleinfeld, while Thomas agreed with the “employer” portion of the ruling.

Case: Salazar v. McDonalds, No. 17-15673

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