A federal judge has overturned a prior ruling that made it more difficult for employees to win lawsuits against companies for violations made by franchisees or contractors. The Labor Department proposed the prior ruling in 2019 and finalized it in January 2020. The prior rule effectively shielded parent companies and prevented workers at franchises like McDonald’s and Burger King from winning cases regarding minimum-wage law infractions and overtime infractions. More than 15 states disputed the rule, and last week in the U.S. District Court in Manhattan, Judge Gregory H. Woods stood by them. Woods argued that the Labor Department had abandoned the statute governing minimum-wage and overtime rules without ample reasoning. He added that the department did not “make more than a perfunctory attempt” to take into account how the rule would negatively effect franchise workers. In his ruling, judge Woods wrote that the process for establishing liability in parent companies had been “flawed in just about every respect.” Read more here at The New York Times, or here at The Counter.
Photo Source: Paul Sancya/Associated Press