B2B Payments

McDonald’s Owners Settle PA Payroll Card Class Action

McDonald’s franchise owners in Pennsylvania have settled a lawsuit filed in 2015 over their use of payroll cards, news reports on Wednesday (Oct. 25) said.

Owners of 16 McDonald’s locations across the state have agreed to pay nearly $3 million to hourly employees that joined a class action lawsuit against the fast food restaurant owners’ use of payroll cards they said were riddled with unfair fees. Employees were forced to pay fees whenever they went to an ATM to withdraw funds from their payroll cards, as well as when they made online bill payments.

The class action named the McDonald’s franchisees as well as the card-issuing banks, JPMorgan Chase & Co. and JPMorgan Chase Bank N.A., as defendants.

Reports in the Associated Press said the settlement was a result of an earlier ruling last year by a state appellate court that ruled the payroll debit cards were not “lawful money” or a “check” under Pennsylvania law.

Franchisees Albert and Carol Mueller reached the settlement and agreed to pay $1,200 to each employee, totaling nearly 2,400 plaintiffs, reports said, as well as to pay $858,000 in lawyers and court fees.

Last July, the defendants argued that they were not deceptive in their promotion of payroll card products to fast food workers, but Judge Thomas Burke Jr. overruled efforts by the defendants to dismiss the case. The judge had also previously denied a request for a summary judgment.

Legal action surrounding payroll cards and their fees is taking place in New York state. Earlier this year, the New York State Department of Labor appealed the Industrial Board of Appeals’ decision that ruled the Department of Labor overstepped its “rule-making authority” in regulating payroll cards.

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