McDonald's franchise ends debit card-only payroll after controversy

You can now have it your way at McDonald’s. Your pay, that is.

The owners of 16 of the chain’s local restaurants succumbed Monday to the pressure of a lawsuit and mounting negative publicity — including a front page article in The New York Times — and said they would end the controversial practice of only paying employees with fee-laden debit cards.

The 16 regional McDonald’s stores owned by Albert and Carol Mueller of Clarks Summit will now give employees the choice of being paid by check, direct deposit or payroll card, a spokeswoman for the company said Monday, hours after the Times article appeared.

West Pittston attorney Michael Cefalo, who filed the class-action lawsuit, said it’s clear the lawsuit and negative national attention finally pushed the local owners to do the right thing.

“They’re moving in a direction they should have been moving in all along. We’re happy in a sense, gratified in a sense, but it doesn’t alter the lawsuit,” said Cefalo, whose lawsuit hastened a national focus on the growing use of the payroll cards by companies attempting to limit payroll expenses.

Cefalo sued the company on behalf of Natalie Gunshannon, 27, of Dallas Township, a former employee of the Shavertown McDonald’s who claimed the mandatory use of the cards violated state law. In most cases, the cards, issued by J.P. Morgan Chase, carry fees for withdrawals, online bill payments, balance inquiries and other transactions.

After Cefalo filed the lawsuit, the U.S. Attorney’s Office for the Middle District of Pennsylvania said it had asked the U.S. Labor Department to examine the practice. About 150 current and former McDonald’s workers have joined the lawsuit, Cefalo said Monday.

In previous statements, the Muellers said they strived to obey all laws governing employee pay. An attorney for the franchisees defended the practice of using the cards, saying there are ways to avoid fees, namely through withdrawing money at Visa-member banks.

By Monday, the pressure to pay employees through traditional, less fee-heavy methods, had reached a critical mass and the Muellers relented.

“An important part of our value system has always been to provide our employees with convenient, free and immediate access to their pay,” Christina Mueller-Curran, spokeswoman for Albert and Carol Mueller Limited Partners, said. “By expanding the options our employees have to receive their wages they will be better able to meet their individual financial needs and preferences.”

Cefalo said he will continue to push the lawsuit through the legal system because it seeks justice for vulnerable, low-wage workers who were forced to be paid by debit card. In addition to repayment of any fees paid, Cefalo said he wants punitive damages assessed against the local owners. He plans to take the case to trial if necessary.

“We’re going to find out the relationship (between the Muellers and J.P. Morgan Chase). We’re going to find where the fees were going,” Cefalo said. “We have a bank that is squeezing them because an employer is making them use a debit card. That’s just not fair.”

Reverse Course

The McDonald’s franchisees at the center of the pay card controversy issued a statement Monday on their decision to start paying employees through traditional means:

Albert and Carol Mueller Limited Partners today announced that effective immediately they are offering more options for their crew members to receive their wages either through a pay card, direct deposit or paper check in all of the 16 McDonald’s franchises under their ownership. All employees will receive a selection form, on which they will designate and authorize their payment choice.

“An important part of our value system has always been to provide our employees with convenient, free and immediate access to their pay. By expanding the options our employees have to receive their wages they will be better able to meet their individual financial needs and preferences,” said Christina Mueller-Curran, spokesperson for Albert and Carol Mueller Ltd.

Albert and Carol Mueller have been operating McDonald’s franchises for more than 40 years in Northeastern Pennsylvania.

———————-