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TheStreet Open House

Sozzi: Here Comes a McDonald's Employee Uprising

Stocks in this article: MCDWMT

NEW YORK (TheStreet) -- A range of new lawsuits recently sprung up involving McDonald's (MCD) low income workers. Here is the 411: in its thirst to profit, McDonald's has apparently installed software that monitors the ratio of labor costs as a percentage of revenue. When that ratio climbs above a target, the lawsuit says workers are forced to wait around before they can clock in. In other words, they could be guilt-tripped into working off the clock! In Michigan, the lawsuit alleges workers have to pay for their own uniforms.

I dug into the company's recently released annual report and found one key problem should more of these disturbing lawsuits arise.

  • According to McDonald's, "it does not believe that any such litigation matter currently being reviewed will have a material adverse effect on its financial condition or results of operations."

Umm yeah. Upcoming employee uprisings could certainly impact McDonald's global store opening and dividend plans. Might want to keep this in mind for Wal-Mart (WMT), too.

Watch More Videos From Brian Sozzi

-- By Brian Sozzi CEO of Belus Capital Advisors, analyst to TheStreet

At the time of publication, Sozzi held no position in the stocks mentioned.

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