By Jeffrey T. Lewis
SAO PAULO–A group of Brazilian unions are suing McDonald’s Corp.’s Latin America franchisee, Arcos Dorados, alleging labor law violations that include paying less than the minimum wage and prohibiting employees from taking required breaks.
The National Confederation of Tourism and Hospitality Workers, or Contratuh, filed the suit Monday in a labor court in Brazil’s capital, Brasilia, with the backing of several other unions. The unions asked the court to force Arcos Dorados to comply immediately with Brazilian labor laws and to halt the opening of any new McDonald’s restaurants in Brazil until it does.
McDonald’s Corp. isn’t named in the suit and declined to comment on it. Arcos Dorados said it complies with all the relevant Brazilian labor laws and agreements, and added that it hasn’t been officially notified about the suit.
“All our employees are registered according to the law and receive remuneration and benefits complying with collective agreements reached with unions,” Arcos Dorados said in a statement emailed to The Wall Street Journal.
The suit alleges that Arcos Dorados restaurants in Brazil regularly commit a series of violations, including paying less than the minimum wage, not paying for overtime hours worked, not permitting workers to take legally required breaks and failing to make the legally required extra payments for work considered dangerous under Brazilian law, such as operating hot hamburger grills and french-fry makers.
The suit also alleges that Arcos Dorado manipulated time clocks at its restaurants to cheat workers of hours.
According to its website, Arcos Dorados is the world’s biggest McDonald’s franchisee, with more than 90,000 employees at more than 2,080 restaurants in 20 countries and territories in Latin America and the Caribbean region. The company said it has more than 700 restaurants in Brazil, which is one of McDonald’s 10 biggest markets.
McDonald’s is also facing lawsuits in the U.S. over labor practices. In January, 10 former restaurant workers sued McDonald’s and one of its franchisees for alleged wrongful termination, alleging they were fired because of their race, or quit because of racial harassment.
McDonald’s has said its franchisees are responsible for setting wages and controlling working conditions within their restaurants. The U.S. National Labor Relations Board’s general counsel in December issued complaints naming McDonald’s as a “joint employer” of workers at its franchisees, saying the franchiser has enough control over franchisee operations for it to share liability for labor law violations in the U.S.
Annie Gasparro in Chicago and Paulo Trevisani in Brasilia contributed to this article.
Write to Jeffrey T. Lewis at jeffrey.lewis@wsj.com
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