New York’s Attorney General Sues Domino’s Over Lost Employee Wages
New York Attorney General Eric Schneiderman filed a lawsuit against Domino’s and three of its franchisees, claiming it systematically unpaid its workers, failed to pay overtime, and didn’t reimburse delivery staff for their gas, mileage and wear and tear on their vehicles. The suit alleges that the lost wages amount to approximately $565,000, spread throughout ten New York-based stores.
Typically, franchisors are not held jointly responsible for the actions of their franchisee, since franchisees are often seen as independent businesses. However, Scheniderman argues Domino’s is liable as a joint employer because it exercised a high level of control over employee conditions at these stores and it knew about flaws in the computer system, which led to the wage violations. Domino’s believes Schneiderman’s decision to hold the parent company jointly liable could eventually eliminate opportunities for independent business owners to make their own employment decisions.
In the last few years, the New York Attorney General’s office has made it their goal to stop companies from underpaying low-wage workers. The office has already settled similar cases with 12 Domino’s franchisees (61 stores) for approximately $1.5 million. In October 2015, Schneiderman and U.S. Department of Labor forced four Papa John’s Pizza franchisees in New York to pay close to $500,000 in back wages and damages to more than 250 short-changed employees. Since 2011, the attorney general’s wage theft cases have returned $26 million to nearly 20,000 workers.
Schneiderman’s office is not the only group pushing to hold parent companies accountable for their franchisees’ actions. Currently, the National Labor Relations Board is conducting a hearing that may establish McDonald’s as jointly liable for employee work conditions.
It will be interesting to see how these cases play out, as a ruling against Domino’s and McDonald’s may impact how franchisors are viewed in future legal proceedings.Back