Recently New York Attorney General Eric Schneiderman filed a lawsuit against Domino’s Pizza for underpaying staff.
According to Legal Reader, last year the Attorney General’s Office settled for $1.5 million with 12 Domino’s franchisees found to be underpaying workers. This is the second lawsuit the Attorney General has brought against Dominoes Pizza, and the current lawsuit includes the following allegations:
Are Wage and Hour Violations the Franchisee’s or Franchisor’s Liability?
The Dominoes Pizza parent company (franchisor) argues that wage and hour violations are the individual franchise owner’s (franchisee) liability and not the Dominoes parent company’s liability. Yet, the Attorney General names both as parties in the case. Typically wage and hour lawsuits exclude franchisors and only target franchisees. However, a landmark case where the National Labor Relations Board is suing McDonald’s may set a precedent that makes franchisors jointly liable for a franchisee’s violations.
Dominoes claimed that for more than three years it had collaborated with franchisees to bring them into compliance with wage and hour laws but that it is not obligated to do so.
Details of the Lawsuit
Because the parent company instructs franchisees to use its computerized payroll system, Schneiderman alleges that the parent company bares equal liability for underpaying workers.
He also stated that his office discovered that Dominoes Pizza headquarters was extensively involved in with franchises and how they operated and actually caused many of the pay violations.
Rely on Experienced Legal Counsel
Small and large businesses alike should consult with experienced legal counsel to limit liability and ensure compliance with labor and employment laws.
At Stephen Hans & Associates, our Queens, NYC employment defense firm brings decades of legal experience to the table. We can help you protect your rights and put policies in place to avoid liability.