Domino’s Pizza Sued for Allegedly Cheating Workers on Pay

Updated on
  • Lawsuit claims workers at 10 stores underpaid by $567,000
  • Franchisees running 61 stores previously paid $1.5 million

Domino’s Pizza Inc. cheated workers at 10 stores out of their full wages by using a company payroll computer that systematically shorted their pay by at least $567,000, New York Attorney General Eric Schneiderman claimed in a wage-theft lawsuit.

The company micromanaged operations and employee relations at its franchises and knew about flaws in the computer system, according to the complaint released Tuesday. Schneiderman said the case is the first in which a fast-food corporation would be held liable as a joint employer for labor violations at its franchises.

"This really puts other parent corporations on notice,” Schneiderman said at a news conference. You’re not going to evade liability"

Schneiderman has previously settled cases with 12 Domino’s franchisees who own 61 stores and agreed to pay $1.5 million, he said. The company played a role in hiring, firing and disciplining workers, and it encouraged franchisees to adopt an anti-union position, according to the attorney general.

“We were 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,” Domino’s said in a statement. 

“We believe that every employee deserves to be treated fairly and paid what they are entitled to under the law,” the company said. The franchisees are “solely responsible” for hiring, firing and paying employees, it said. 

Schneiderman sued the company and three franchisees claiming they violated minimum-wage and overtime laws and failed to reimburse workers for expenses such as pizza deliveries by car or bicycle.

“We’ve found rampant wage violations at Domino’s franchise stores,” Schneiderman said. “We’ve discovered that Domino’s headquarters was intensely involved in store operations, and even caused many of these violations.”

The attorney general asked a judge to rule that Domino’s is a joint employer at the 10 stores named in the complaint and that it defrauded the franchisees. He sought the appointment of a monitor to ensure future compliance.

Domino’s said it had been working with the attorney general’s office for more than three years to “see what we could do to help our franchisees understand and comply with some of the many complex wage and hour laws that apply to their decisions.” 

The case is Schneiderman v. Domino’s Pizza, Supreme Court of the State of New York (Manhattan).

(Updates with Schneiderman comment in third paragraph.)
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