Last week, New York Attorney General Eric Schneiderman sued Domino’s Pizza Inc. and three New York franchisees for wage and hour violations. The lawsuit alleges that that from July 2008 to the present, Domino’s franchisees did not pay its delivery drivers minimum wage and failed to adequately pay overtime, due to an in-house payroll software system that undercounted hours worked by employees. Unlike many other lawsuits, this lawsuit is the first one filed by the Attorney General’s office to claim that the corporate franchisor is liable for the violations of its franchisees under a joint employer theory. It accuses the company, Domino’s Pizza LLC, of requiring its franchisees to use a computer software system that it knew was flawed and claims that it was heavily involved in individual store operations. If the state wins, it will make it harder for corporations that run franchises to avoid responsibility for the unlawful actions taken by its franchisees.
Since 2014, the New York Attorney General’s office has settled cases with many other Domino’s franchisees for wage and hour violations, including securing a $446,000 settlement for delivery workers for unpaid minimum wage and overtime, as we previously reported. And since 2011, Schneiderman has obtained more than $26 million for nearly 20,000 workers who were shorted wages.