Superior Court Sides With Local McDonalds Workers In Debit Card Pay Case
The state Superior Court has upheld a decision by a Luzerne County judge who ruled that the owners of 16 local McDonald’s restaurants violated the law by paying hourly employee strictly with fee-laden debit cards.
A three-judge panel said it agreed with Judge Thomas F. Burke’s ruling that said paying employees with a debit card did not fall in line with the Pennsylvania Wage Payment and Collection Law that mandates “wages shall be paid in lawful money of the United States or check.”
“The language is clear. A debit card is not ‘lawful money” and it is not a ‘check’ ...” Superior Court Judge Anne Lazarus wrote in the court’s opinion.
Burke issued his ruling in June 2015 in the class action lawsuit, considered to be the first of its kind in Pennsylvania.
He denied a request by McDonald’s franchise owners Albert and Carol Mueller of Clarks Summit for the suit to be dismissed via summary judgement. The couple appealed Burke’s ruling in September 2015.
They argued that a debit card was the “functional equivalent” of a check or lawful money.
The Superior Court panel called that argument “unavailing,” because the cards were mandatory and “forced users to incur fees” for all types of transactions.
The Superior Court noted the state legislature is still deciding how to regulate debit cards as a form of payment for work.
“The use of a voluntary payroll debit card may be an appropriate method of wage payment. However, until our General Assembly provides otherwise, the plain language of the (payroll law) makes clear that the mandatory use of payroll debit cards at issue here, which may subject the user to fees, is not,” the court ruled.
West Pittston attorney Michael Cefalo said the ruling was a big victory for his nearly 2,400 plaintiffs.
“The court ruled Burke’s decision was well reasoned and scholarly,” Cefalo said. “It was bulletproof.”
The J.P. Morgan Chase payroll cards issued to local McDonald’s employees carried fees for nearly every type of transaction, according to Cefalo’s lawsuit, including a $1.50 charge for ATM withdrawals, $5 for over-the-counter cash withdrawals, $1 to check the balance, 75 cents per online bill payment and $10 per month if the card is left inactive for more than three months.
After Cefalo filed the lawsuit, it quickly gained national attention, including a front-page story in The New York Times and an investigation by federal officials.
Soon after, the Muellers announced they were abandoning the pay practice and would give employees the choice of being paid by check, direct deposit or by payroll card.