The suit was filed Wednesday on behalf of Anishi Spencer and her two sons, who were 3 and 2 years old at the time of the alleged incident in February 2012.
The mother alleges the 2-year-old coughed up a piece of the condom and that both children required medical treatment.
The suit accuses McDonald's of failing to remove harmful debris from an area used by children.
McDonald's said Thursday it was investigating. It added in a statement that "providing a safe, clean environment is a top priority."
The woman's attorney, Jeffrey Deutschman, says he tried for months to reach a settlement but got no response.