After nearly seven years of litigation, McDonald’s and a class of approximately 38,000 hourly paid employees at its corporate–run stores in California have agreed to the terms of a $26 million settlement of various state law wage and hour claims in Sanchez v. McDonald’s Restaurants of California Inc., No. BC499888 (Cal. Super. Ct., L.A. Cty.). Superior Court Judge Ann I. Jones had granted partial summary judgment to plaintiffs, holding that McDonald’s failed to properly pay daily overtime to employees working an overnight shift followed within twenty-four hours by a day shift by assigning all hours worked to the day that the overnight shift commenced. Such overtime, the court held, “should be based on the amount of work completed by an employee during any single twenty-four hour workday period, regardless of whether the employee works continuously through the day divide.” As a result, according to the Court, McDonald’s “does not calculate overtime based on . . . a workday” in accordance with the California Labor Code.
A hearing on the McDonalds’ unopposed motion for preliminary approval of the settlement is scheduled to be conducted on February 11, 2020. The settlement is a reminder of the importance of carefully monitoring the evolving and often arcane standards regarding California’s overtime pay and related wage and hour requirements.