If you're still having regrets about last weekend's midnight cheesy bread bender, today's news may be just what you need to swear off the stuff (or at least start tipping much better): Domino's has been systematically shortchanging its workers, stealing hundreds of thousands of dollars in wages over the past several years, NY Attorney General Eric Schneiderman alleged in a lawsuit filed today.
Domino's corporate, as well as three of its franchisees, are accused of committing wage theft at 10 stores in New York, withholding at least $565,000 from employees over four years.
Domino's apparently required those franchisees to use a payroll system called PULSE, which, the AG's investigation revealed, systematically under-calculated workers' wages. Schneiderman's office obtained emails that showed Domino's became aware of this flaw in the system years ago, but didn't take any action to correct it, and insisted that franchises keep using the broken system.
Over a two-year period, 33 of the 42 Domino's franchisees in New York reported in their own payroll records that they were paying workers less than the minimum wage at the time, and 36 out of 42 were paying less for overtime than is required by law. Overall, 86% of Domino's franchisees in the state violated basic wage protections for workers, the AG said today.
Schneiderman previously settled cases with 12 franchisees in New York, who will pay about $1.5 million in restitution to cheated workers. Those franchisees, as well as those named in this new suit, used the PULSE system, according to the AG's office, but this is the first time that Schneiderman has held a fast food corporation itself liable as a joint employer when alleging wage theft.
"It's time for Domino's parent corporation to be held accountable," Schneiderman said during a press conference Tuesday. "It's time for Domino's to step up to the plate, to stop hiding behind the franchise business model and to accept responsibility for the widespread harm they have inflicted upon working New Yorkers and the widespread fraud they have perpetrated and caused."
Tim McIntyre, a spokesperson for Domino's, said that the company had been working with Schneiderman's office for over three years to help its franchisees understand wage and hour laws, and was "disappointed to learn that the Attorney General chose to file a lawsuit that disregards the nature of franchising and demeans the role of small business owners instead of focusing on solutions that could have actually helped the individuals those small businesses employ."
Schneiderman isn't the only one who's accused the pizza giant of unfair wage practices: in 2014, 61 delivery workers won $1.3 million in a class-action lawsuit against Domino's, accusing a franchisee, DPNY Inc., of minimum wage and overtime violations. Not long before that settlement, employees at a Washington Heights Domino's claimed that they were fired after protesting unfair wages by participating in a nationwide walkout as part of the Fight for $15.
When asked whether pizza-craving customers should be buying from Domino's, Schneiderman said, "I don't," but added that "it's important to note that there are other chains that also have very, very bad records."
That would be Papa John's, one of whose NYC franchisees recently had to pay $2.12 million in a wage theft lawsuit also brought by Schneiderman. But it's not only fast food joints that have come under the AG's scrutiny: his office accused the bong-water-serving Manhattan eatery Per Se of withholding tips from employees, and last year, announced that the restaurant would have to pay a settlement of $500,000.
In response to news of this latest wage theft lawsuit against Domino's, Joseph Bello, who works at a Domino's franchise and is active in the Fight for $15 movement, said that "corporations like Domino's...can't mistreat their workers and then hide behind franchisees, pretending to have no responsibility. We're going to keep on joining together to make sure that fast-food companies don't steal our wages, and that they pay us $15 so we can support our families and respect our right to a union."