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McDonald’s Settles Lawsuit, Agrees to Pay $3.75 Million to Bay Area Franchise Workers

Workers rally outside a McDonald's in L.A. last year to show support for a $15-an-hour minimum wage. (Credit: Los Angeles Times)

For the first time, McDonald’s has settled a case with workers who said they were subject to labor violations at franchisee-owned stores.

The company agreed to pay $3.75 million to workers who alleged that several Bay Area McDonald’s stores miscalculated their pay, denied them overtime, and did not compensate them for cleaning their uniforms, according to documents filed Friday in a U.S. District Court in San Francisco.

McDonald’s has been battling for years in courts across the country to shield itself from wage and hour claims made by workers at franchisees, and has generally succeeded. For the last several months, the company has been fighting with the National Labor Relations Board in a case being heard by an administrative judge in New York about whether it is a joint employer of workers owned by franchisees.

The most recent San Francisco case marked the first time a federal judge allowed a class to sue the company for violations at franchisee stores, based on a different interpretation of the joint employer relationship.

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