mcdonalds
© Lucy Nicholson / ReutersGroups behind the campaign are hailing the settlement as an important victory for workers across the country.
Fast food giant McDonald's paid out US$3.75 million dollars to settle an industrial dispute with more than 800 franchise workers in California on Tuesday. The company said they reached the agreement to avoid further litigation.

McDonald's agreed to pay US$1.75 million in back pay and damages as well as US$2 million in legal fees to around 800 workers from five restaurants all owned by the Smith Family LP franchise.

In the case in the U.S. District Court in San Francisco, both the Smith franchisee and McDonald's were accused of breaking the law by "failing to pay overtime, keep accurate pay records, and reimburse workers for time spent cleaning uniforms," according to Reuters.

One of the main voices behind the legal campaign and workers rights struggles around the country is Fight for $15. The group has united fast food workers and other low paid industries to fight for what they call a "living wage" and establish more employee protections and bargaining power.

Fight for $15 say that McDonald's is practicing "cannibal capitalism" by not fairly compensating its workforce while attempting large-scale tax avoidance. The group has been protesting around the country calling on presidential candidates to adopt a US$15 minimum wage nationally.

The group claims that since launching their campaign 17 million Americans have gotten raises. The movement also campaigns against racially discriminatory pay, where many Black and Latinx workers are paid less than white workers, often well below US$15.

"The courageous McDonald's worker who brought this suit forced one of the world's most powerful companies to take responsibility for the way it treats us," said Anggie Godoy, a Fight for $15 member and Los Angeles McDonald's employee.

Earlier in October, sexual harassment complaints were filed against McDonald's on behalf of 15 workers and the company is currently involved in a legal battle with the National Labour Relations Board to determine if it is a joint employer of the franchise workers under federal union laws.

McDonald's maintains that they are not a joint employer of franchise workers. "We entered into this mutually acceptable resolution to avoid the costs and disruption associated with continued litigation," said company spokesman Terri Hickey.

The outcome of the case will affect thousands of workers across the U.S. The fast-food chain has more than 14,200 outlets in the United States that employ 90,000 workers.