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Individual and class sexual harassment, retaliation claims against McDonald’s entities advance

By Nicole D. Prysby, J.D.

The employer’s motion to dismiss the individual and class claims was denied due to allegations that the harassment and retaliation were a result of company-wide policies and practices concerning sexual harassment.

A federal district court in Illinois declined to dismiss the individual and class claims for sexual harassment, hostile work environment, and retaliation asserted by two employees against several McDonald’s entities. The employees alleged that they reported the harassment—from coworkers and customers—to managers and insufficient action was taken in response. The individual claims advanced based on allegations that multiple McDonald’s entities were a single integrated enterprise that jointly employed all workers. As to the retaliation claims, three or four months between a complaint and termination was not sufficiently long to make it implausible the employee was terminated in retaliation for complaining about harassment. As to the class claims, the court found commonality through allegations of a company-wide practice of sex discrimination and evidence of a pattern or practice of discrimination (Fairley v. McDonald’s Corp., July 20, 2021, Valderrama, F.).

Harassment. Employees of a McDonald’s restaurant brought individual and class claims for sexual harassment, hostile work environment, and retaliation under Title VII and the Florida Civil Rights Act against McDonald’s Corporation, McDonald’s USA, LLC (McDonald’s USA), and McDonald’s Restaurants of Florida, Inc. (McDonald’s of Florida) (collectively, McDonald’s or Defendants). One employee alleged that she was verbally and physically harassed by two male coworkers. According to the complaint, she reported the harassment to supervisors, who talked to the alleged harassers. Eventually, a McDonald’s operations consultant came to the restaurant to discuss the harassment and one of the alleged harassers was terminated. The employee’s hours were reduced after her complaint.

The second employee alleged she was harassed by a coworker and by customers, and that despite her complaints to management, no action was taken and eventually she was terminated. The employees filed a class action lawsuit on behalf of all female employees who worked in a position below that of general manager at McDonald’s restaurants in Florida. McDonald’s moved to dismiss all claims.

Individual claims advance. The companies claimed that the complaint was defective for impermissible group pleading. The court rejected that argument, concluding that the complaint provided sufficient notice of the claims through allegations of inadequate policies and training and identification of specific instances of sexual harassment that were reported to specifically named managers and supervisors who did not adequately address the alleged harassment. The court also rejected the companies’ argument the employees had no employment relationship with them—they alleged that the companies were a “single integrated enterprise” and that they “jointly employed all workers at the McOpCo restaurants in Florida,” which adequately pleaded the employment relationship. They also alleged that it was unclear exactly which McDonald’s entity employed them, but based on the information available to them—and in the possession of the companies—they adequately pleaded an employment relationship with each company and that each company had knowledge of the alleged harassment or failed to take appropriate corrective measures.

Failure to exhaust. The court also found the employees exhausted their administrative remedies, as their EEOC charges contained sufficient allegations that the companies engaged in a pattern and/or practice of maintaining a hostile work environment and retaliated against those who complained about sex discrimination and harassment. The allegations in the complaint did not add claims against new individuals, they simply made it more explicit that the allegations contained in the EEOC charges resulted from company-wide policies and practices concerning sexual harassment. Finally, the court concluded that the claims brought by one employee were not time barred; the employee alleged “daily” harassment and it was unclear exactly which day was the last possible day a claim accrued.

The retaliation claims advanced over the companies’ argument that one employee did not plausibly plead a connection between her complaints of harassment and her termination. She reported sexual harassment by a coworker and a customer several months before she was fired. Three or four months between a complaint and termination is not sufficiently long to make it implausible that the employee was terminated in retaliation for complaining about harassment. In addition, she alleged that other employees were not terminated for the same offense (being confrontational).

Because the Title VII claims survived dismissal, the Florida Civil Rights Act claims did as well.

Class claims. The court found commonality, through allegations of a company-wide practice of sex discrimination and evidence of a pattern or practice of discrimination. Although individual managers had discretion to administer the companies’ policy against harassment, the employees alleged inadequate responses and retaliation for reporting sexual harassment by at least one manager and HR representative who supervised multiple McOpCo restaurants. The also alleged a policy of incentivizing managers at McOpCo stores to ignore sexual harassment, among other policies enacted at the corporate level. These allegations were sufficient at the pleading stage.

Typicality was met through allegations that the companies’ company-wide practices of inadequate training and responses to sexual harassment gave rise to the employees’ and the class members’ claims, which were based on the same legal theories. Common questions could predominate, which was sufficient for the pleading stage.

The court did find potential problems with adequacy, because the proposed class could include individuals who allegedly contributed to the hostile work environment. However, the issue should be considered when the employees move to certify the class.