New York Pizza Franchises Incur Judgments, Fines for Minimum Wage and Overtime Violations

pizza-boxes-358029_640.jpgThe New York Attorney General (AG) has obtained about $3.8 million in judgments and settlements from multiple pizza franchise operators in recent months for violations of state minimum wage and overtime laws. This includes judgments against two companies that operate Papa John’s pizza delivery businesses and settlements with five Domino’s franchisees. Many state attorneys general pursue civil claims against employers for wage violations, but state and federal laws also allow employees to file suit themselves.

Under the federal Fair Labor Standards Act (FLSA), the minimum wage is $7.25 per hour. 29 U.S.C. § 206(a)(1)(C). New York’s minimum wage is $8.75 per hour as of December 31, 2014. N.Y. Lab. L. § 652. The FLSA requires overtime pay equal to one-and-a-half times the wage of covered employees for hours worked in excess of 40 hours in a week, or 80 hours in a two-week pay period. 29 U.S.C. § 207. New York law follows the FLSA.

The AG filed suit against a Papa John’s franchisee and its two owners in December 2014 for a wide range of alleged wage violations, including under-reporting and rounding down employee hours to avoid paying overtime. New York v. Emstar Pizza, Inc., et al., No. 017345/2014 (N.Y. Sup. Ct., Kings Co.) The lawsuit claimed that various illegal wage practices had been going on for at least six years at the defendants’ six locations. The AG’s Labor Bureau reportedly found that employee paychecks were sometimes short by hundreds of dollars due to under-reporting of hours, failure to pay overtime, and lack of accurate payroll records.

In late January 2015, a judge ordered the company and one owner to pay more than $789,000 in unpaid wages, liquidated damages, and interest. That owner has appealed the judgment. The other owner entered into a settlement agreement with the AG that included joint and several liability with the company for over $541,000.

In another lawsuit involving a different Papa John’s franchisee, a court in Manhattan entered an order finding the company and its owner liable for a total of over $2.1 million. New York v. New Majority Holdings, LLC, et al., No. 452487/2014, order and judgment (N.Y. Sup. Ct., N.Y. Co., Mar. 3, 2015). This amount includes about $1 million in restitution for unpaid wages and unreimbursed expenses, $650,000 in liquidated damages, $278,000 in Notice of Pay Rate damages, and $171,000 in interest. The lawsuit claimed that the company underpaid workers over a period of more than four years by rounding down the amount of time reported on timesheets.

The AG announced in April 2015 that it had reached settlement agreements with four Domino’s franchisees, which operate a total of 29 locations around the state, and one former franchisee that had operated six locations. The allegations against the companies were similar to those against the Papa John’s franchisees: rounding down of employee hours, underpayment or nonpayment of overtime, and failure to reimburse employees who used their own automobiles or bicycles for deliveries. The Domino’s franchisees agreed to pay $970,000 in restitution and to improve their policies and procedures.

If you are involved in an employment law dispute in New Jersey or New York, a knowledgeable and experienced employment law attorney can help you understand your rights and fight for your interests. Contact the Resnick Law Group online, at 973-781-1204, or at 646-867-7997 to schedule a confidential consultation with a member of our team.

More Blog Posts:

New York State Attorney General Sues Pizza Franchisee for Alleged Wage Violations, The New Jersey Employment Law Firm Blog, December 18, 2014
NLRB Allows McDonald’s Employees to File Complaints Against McDonald’s and Individual Franchisees as “Joint Employers”, The New Jersey Employment Law Firm Blog, November 3, 2014
Court Rejects Proposed Settlement in Class Action Lawsuit Alleging Wage Fixing by Silicon Valley Employers, The New Jersey Employment Law Firm Blog, October 23, 2014
Photo credit: Hans [Public domain, CC0 1.0], via Pixabay.

Contact Information