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McDonald's wins summary judgment, defeats class certification and PAGA claims in wage and hour class, joint employer action

January 2017

Plaintiffs filed suit in 2014, seeking to represent more than 1,200 employees at eight McDonald’s restaurants owned by a McDonald’s franchisee in franchises in Oakland, California, against both the franchise owner and the franchisor, arguing that Jones Day client McDonald’s was liable as their joint employer on a variety of wage and hour claims, or that McDonald’s was alternatively liable for those claims under an aiding and abetting, negligence, actual agency, or ostensible agency theory.

On May 6, 2016, McDonald’s moved for summary judgment, arguing that McDonald’s was not Plaintiffs’ joint employer and that there were no facts to support any of Plaintiffs’ alternative theories of liability. Following oral argument, the court granted McDonald’s motion as to Plaintiffs’ joint employer, aiding and abetting, negligence and actual agency theories. As a result, McDonald’s was able to limit the basis on which Plaintiffs could pursue class claims to their secondary theory that the Plaintiff employees incorrectly believed that the franchise owner acted as an agent of McDonald’s, and that McDonald’s was liable for the franchise owner’s alleged violations of California wage and hour laws under an ostensible agency theory.

With the issues in the case narrowed, McDonald’s affirmatively moved to deny class certification on the basis that Plaintiffs’ ostensible agency theory – which required Plaintiffs to prove both class members’ individual beliefs as to who their employer was and that had relied on those beliefs – presented too many individualized issues to be determined on a classwide basis. Plaintiffs also moved for class certification. McDonald’s also moved to strike Plaintiffs’ PAGA claim as unmanageable. The court issued its decision on January 6, 2017, denying class certification as to all of Plaintiffs’ remaining claims and striking all Plaintiffs’ PAGA claims.

Salazar v. McDonald's Corporation, Case No. 3:14-cv-02096-RS (N.D. Cal.)

For additional information about this matter, please contact: Lawrence C. DiNardo, Elizabeth B. McRee, Brent D. Knight

Client(s): McDonald's Corporation
Practice(s): Labor & Employment