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New York AG Settles with Franchisees on Labor Violations, Domino’s Not Off the Hook

New York AG settles case against Domino's franchisees
AG Schneiderman on May 2016 announces lawsuit against Domino's wage theft

Attorney General Eric T. Schneiderman yesterday settled with three Domino's Pizza franchisees, totaling $480,000 in restitution to hundreds of workers subject to wage and labor violations at ten franchise locations. As part of the settlement, the shop owners will be dismissed from the lawsuit the AG filed last May, leaving Domino's as the only defendant.

To date, Schneiderman has secured agreements with 15 individual franchisees who collectively own half of New York State's Domino's franchise locations, paying nearly $2 million in restitution to their employees.

"In the past three years, my office's investigations have revealed a consistent and outrageous record of disregard for workers' rights by franchisees, and as we allege, with the full knowledge of Domino's Pizza," Attorney General Schneiderman said. "My office will continue with our lawsuit against Domino's Pizza to end the systemic violations of workers' rights that have occurred in franchises across the State. We will not allow businesses to turn a blind eye to blatant violations that are cheating hard working New Yorkers out of a fair day's pay."

In continuing its lawsuit against Domino's Pizza Inc., Domino's Pizza LLC and Domino's Pizza Franchising LLC, the Attorney General has asserted that Domino's was heavily involved in the employment practices of the three franchisees and, as a result, is a joint employer of the workers at the franchisees' stores and is responsible for underpaid wages to these workers. Schneiderman has also alleged that Domino's encouraged franchisees to use payroll reports from the company's computer system (called "PULSE"), even though Domino's knew for years that PULSE under-calculated gross wages. Domino's typically made multiple updates to PULSE each year, but decided not to fix the flaws that caused underpayments to workers or tell franchisees about the flaws, deeming it a "low priority."

Martin Silver, attorney for one of the three franchisees who settled this week, told the New York Daily News, "We're paying a fine based on some violations that were totally inadvertent on my client's part. It was totally unintentional and we resolved it as a business decision."


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About Janet Sparks

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Janet Sparks is the former publisher of the Continental Franchise Review, an industry newsletter that covered the franchise community for over 30 years. She has also been a columnist for a leading franchise magazine for the past 13 years. Today she is an independent journalist who engages in investigative reporting, tackling complex issues that impact the franchise industry.

Janet can be reached at jsparks@bluemaumau.org or at 303-799-7398.