UPDATE 1-Brazil unions sue McDonald's operator on pay, rules
(Adds details on Arcos Dorados sales)
RIO DE JANEIRO Feb 24 (Reuters) - Brazilian unions have filed a lawsuit alleging that the largest operator of McDonald's restaurants in Latin America violates Brazil's labor laws, a case that could lead to fines of up to 30 percent of annual sales.
According to the suit filed on Monday in Brazil's federal labor court in Brasilia, violations committed by Arcos Dorados Holdings Inc amount to "social dumping" and help McDonald's Corp illegally undercut competitors and boost profit.
The lawsuit against the world's largest McDonald's franchisee seeks to end the practices described in the suit and ban the opening of any new McDonald's restaurants in Brazil until the problems are fixed.
It also seeks lost pay and damages. No figure was mentioned, but fines under Brazilian labor law can vary between 1 percent and 30 percent of a company's annual sales.
Arcos Dorados' Brazil division had 833 restaurants and total revenue of $460.9 million for the third quarter that ended Sept. 30.
The suit is backed by two of Brazil's largest labor federations, CUT and UTG, as well as the Washington, D.C.-based Service Employees International Union (SEIU). It comes as U.S. unions representing retail and fast-food workers are pushing to improve working conditions and to boost wages for workers who typically are paid the minimum wage or a little more.
U.S. workers have filed lawsuits against McDonald's and its franchisees over allegations that include wage theft and sexual harassment.
The unions accuse Arcos Dorados of having unwholesome and unsanitary working conditions, time-clock fraud and failing to pay mandatory unemployment and retirement insurance. Continuación...