On March 10, the US District Court for the Northern District of California granted summary judgment to McDonald's in a putative class action brought by employees of several of its franchise restaurants. The employees claimed the owner of the franchise restaurants owed unpaid wages and had failed to provide meal and rest breaks. The employees also alleged that McDonald's was liable in addition to the franchise restaurant owner.
As a matter of California law, McDonald's cannot be held liable to the franchise restaurant workers unless it is their "employer." California defines an "employer" as one who "directly or indirectly, or through an agent or any other person, employs or exercises control over the wages, hours, or working conditions of any person." The plaintiffs argued that the phrase "through an agent" permitted a finding of liability under an "ostensible agency" theory—essentially, on the grounds that McDonald's had negligently caused the franchise restaurant employees to reasonably believe that the owner of the franchise restaurant was an agent of McDonald's. The court previously ruled that McDonald's did not exercise control over wages, hours, or working conditions of the employees.
The court ruled that, without evidence of such control, the plaintiffs could not succeed on their ostensible agency theory. It reasoned that the language "through an agent" was expressly limited by the language that followed, and that the plaintiffs' interpretation would render such language superfluous. Moreover, because the language was clear, the court did not need to consider the plaintiffs' policy arguments, which could not properly be a basis for "re-writ[ing] applicable legislation." The ruling brings an end to a case that was originally filed against McDonald's in 2014.
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