A former McDonald’s franchisee will pay out a six-figure settlement after allegedly subjecting student guest workers to 25-hour shifts, substandard housing and repeated retaliatory threats. The settlement, announced Tuesday by the federal Department of Labor, includes $205,977 in damages and back pay to 291 workers, the majority of whom landed at McDonald’s under the State Department’s J-1 visa program for “cultural exchange.” Fifteen of those workers drew international attention and support after mounting a surprise strike last March.
“The conditions at this McDonald’s were not the exception, but rather an extreme version of the rule,” charged National Guestworker Alliance director Saket Soni, whose group spearheaded the strike. Local DOL director Al Gristina alleged in a statement that franchisee Andy Cheung’s company Cheung Enterprises “willfully took advantage of vulnerable student workers living and working in our country under the J-1 visa program.” Andy Cheung and McDonald’s did not respond to requests for comment.
As I’ve reported, the McDonald’s workers first walked off the job March 6. “We are afraid,” guest worker Jorge Victor Rios told me before going on strike. “But we are trying to overcome our fear.” Rios and his comrades at central Pennsylvania McDonald’s locations accused Cheung of rampant and ongoing abuse: Schedules of as little as a handful of hours a week (despite paying $3,000 on the promise of full-time work), or as many as 25 hours straight, without any overtime pay. Cramped housing including bunkbeds in their boss’ basement, for which they paid him rent that could rival a meager week's pay. And threats ranging from curtailed hours to deportation, for offenses ranging from reporting abuse to refusing a last-minute order to come to work.
“Nothing that they told me is true, because everything is a lie,” striker Luis Fernando Suarez told me last year. Suarez said his so-called cultural exchange had been “like an ugly face of the United States … I didn’t feel safe.”
With backing from the National Guestworker Alliance – the non-union labor group behind guest worker strikes in the Hershey’s and Wal-Mart supply chains – the McDonald’s strikers picketed McDonald’s stores in several cities, rallied outside the McDonald’s CEO’s office and home in Chicago, and then mounted a June “Global Day of Action” after returning to their home countries. McDonald’s' only public concessions came early in the campaign: Minutes after a March 14 protest at a Times Square store, the corporation announced that Cheung had “agreed to leave the McDonald’s system.” The corporation did not accede to NGA’s other demands, including new organizing protections, disclosures about its use of guest workers, and full-time work for U.S. workers whose conditions the J-1 students argued they were being used to drive down. But Soni argued that Cheung’s settlement with the Labor Department vindicated the workers’ courage: “If the workers didn’t go on strike, I don’t think any of this would have come out.”
Soni called it “a shame that workers have to go that far just to be paid the meager salary that they earned, but that was stolen from them,” and warned that by failing to establish stronger labor standards for the franchisees who own and run its stores, the fast food corporation was setting the stage for future scandal: “McDonald's will continue to have its reputation … dragged through the mud every time the NGA finds workers like these.”
Noting that the DOL settlement would bring back pay to Cheung’s U.S. citizen employees as well as J-1 student workers, Soni touted it as an example that “workers who are at the bottom … are the most vulnerable, but they can also be ones who move to action and raise the floor for everyone else.”
Like other NGA campaigns, the McDonald’s effort has used a strike by a minority of the workforce as the anchor for a media and protest campaign targeting both corporations and policymakers. While the State Department is charged with overseeing the J-1 program, Rios charged that his pre-strike attempt to get help from the agency only made the situation worse: The government alerted GeoVisions, the group that sponsored the trip, which then sent a representative along with Cheung to visit Rios in the basement where he was staying. Rios said Cheung yelled at him while the GeoVisions representative deferred to Cheung like the franchisee was his boss. (GeoVisions’ CEO told me last year that Cheung had “a very good record in terms of hosting students in the past” and “we do try to resolve problems by bringing parties together”; a State Department spokesperson emailed that the J-1 visa was “NOT a work program” and noted reforms in 2012 had “enhanced oversight and vetting of sponsors and third parties …”)
Workers and organizers have also framed the alleged abuses at Andy Cheung’s McDonald’s locations as evidence of the need for broader guest worker reforms. Soni contended that pro-labor reforms in the Power Act – legislation included in the immigration reform bill passed by the Senate, but not the House, last summer – would reduce the risk that guest workers like the McDonald’s strikers would face deportation for exposing abuse. But he offered a more mixed assessment of the bill’s overall guest worker language, arguing that while it created a “sliver” of less-exploitative visas under a new, more pro-labor guest worker program, employers could still “opt out of that and choose a more exploitable worker” under the existing guest worker programs that the bill would expand. Given the choice between the new, more progressive program and the old and expanded ones, Soni told Salon, “I don’t know why any employer would choose to have a worker in the former category.”
While welcoming recent renewed national attention to the minimum wage – an issue pushed onto the agenda in part by fast food strikes – Soni suggested that the McDonald’s strikers offered a cautionary tale. “It’s not useful to raise the minimum wage if the guest worker program allows employers to opt out of the minimum wage entirely,” said Soni. “And this shows just how that works.”