McDonald’s Faces Trial on Damages for Unpaid Overtime

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By Kevin McGowan

McDonald’s is liable for shortchanging crew members on overtime pay at its corporate-owned California restaurants and must face trial next month on damages that could reach millions of dollars ( Sanchez v. McDonald’s Rests. of Calif. , Cal. Super. Ct., No. BC499888, 4/20/17 ).

That’s the result of an April 20 California Superior Court ruling that the fast-food giant violated state law by not crediting overnight-shift workers for all the overtime pay they were owed.

The court will hold a trial beginning May 23 to determine how much in damages McDonald’s must pay to a class of about 13,000 former and current employees, said Michael Rubin of Altshuler Berzon LLP in San Francisco, one of the attorneys representing the workers.

The ruling stems from a lawsuit in which thousands of former and current employees at about 120 McDonald’s-owned restaurants in California alleged the company paid insufficient overtime, didn’t provide required rest breaks and committed other state labor code violations, Rubin told Bloomberg BNA April 21.

McDonald’s and some of its California franchisees previously settled other wage and hour cases in the state, Rubin said. That includes Ochoa v. McDonald’s Corp., in which McDonald’s agreed in 2016 to pay $3.75 million to settle alleged meal and rest break violations at five franchisee-operated San Francisco Bay Area stores.

McDonald’s use of timekeeping software that deprived crew members of overtime credit if they worked an overnight shift and then worked additional hours later the same day led to the current dispute, Rubin said.

Judge Ann Jones of the Los Angeles Superior Court April 20 ruled the timekeeping system violated the state’s 24-hour workday rule for calculating overtime hours.

It’s possible some franchisees that use the McDonald’s-provided timekeeping software also could face liability for overtime pay violations, Rubin said.

The trial in May will determine damages, prejudgment interest and injunctive relief, Rubin said. Both expert witnesses and McDonald’s employees are expected to testify, he said.

McDonald’s has estimated damages from unpaid overtime to be $400,000. But the class members contend that the amount is more than $2 million plus interest, fees and civil penalties under California’s Private Attorneys General Act, Rubin said.

“So it’s potentially many millions of dollars” at stake, he said.

Attorneys representing McDonald’s didn’t respond to Bloomberg BNA’s requests for comment April 21.

The Matern Law Group and Cohen Milstein Sellers & Toll PLLC also represented the workers. Jones Day represented McDonald’s.

To contact the reporter on this story: Kevin McGowan in Washington at kmcgowan@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Christopher Opfer at copfer@bna.com

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