A multiyear investigation has culminated with a lawsuit announced on Tuesday that was filed against Domino’s, alleging the company underpaid workers in ten different New York locations.
New York Attorney General Eric T. Schneiderman’s office filed the suit, which charged that Domino’s franchisees paid subminimum wages, failed to pay overtime, abused the tip credit and did not fully reimburse employees for delivery-releated expenses.
"We've found rampant wage violations at Domino’s franchise stores. And, as our suit alleges, we've discovered that Domino's headquarters was intensely involved in store operations, and even caused many of these violations," Schneiderman stated.
During the investigation, officials discovered that Domino's allegedly urged franchisees to use the company’s computer system for their payrolls, even though the same system was known for years to undercalculate gross wages, according to the attorney general's office. The company deemed fixing the flaws that caused the underpayments a "low priority."
"Under these circumstances, New York law – as well as basic human decency – holds Domino's responsible for the alleged mistreatment of the workers who make and deliver the company’s pizza. Domino's can, and must, fix this problem," Schneiderman stated.
The attorney general's lawsuit aimed to establish that Domino's was the joint employer of the workers at the franchises named in the suit, determine the full restitution owed to workers at those stores and to find that Domino’s violated state franchise law.
Schneiderman has settled cases with 12 Domino's franchisees who have agreed to pay around $1.5 million, the attorney general’s office stated. The three franchisees named in Tuesday’s lawsuit operate 10 stores in the New York City area as well as Westchester, Nassau and Montgomery counties.