- Title: N.Y. official sues Domino's over alleged wage theft
- Date: 24th May 2016
- Summary: NEW YORK, NEW YORK, UNITED STATES (MAY 24, 2016) (REUTERS) VARIOUS OF DOMINO'S EXTERIOR VARIOUS OF DOMINO'S WORKERS VARIOUS OF DOMINO'S EXTERIOR
- Embargoed: 8th June 2016 17:57
- Keywords: Domino's wages pizza law New York abuse
- Location: NEW YORK, NEW YORK, UNITED STATES
- City: NEW YORK, NEW YORK, UNITED STATES
- Country: USA
- Topics: Company News Markets,Economic Events
- Reuters ID: LVA0024J64WO5
- Aspect Ratio: 16:9
- Story Text: The New York attorney general's office on Tuesday (May 24) sued Domino's Pizza Inc, claiming it is liable for wage theft by franchisees because the company used a computer system that it knew under-calculated workers' pay.
The lawsuit is the first by Attorney General Eric Schneiderman's office to claim a fast-food company is a "co-employer," meaning it is liable for labor violations by its franchisees. It is the latest such case by U.S. regulators against companies, including McDonald's Corp.
Domino's micromanaged workers at 10 stores owned by three franchisees in New York City and its suburbs, the lawsuit says, including ordering the disciplining or firing of specific workers and discouraging union organizing. The company and the franchisees were each named as defendants.
Employees at the restaurants were underpaid by $565,000 (USD) because of a faulty computer program Domino's refused to fix, the attorney general said.
"(Domino's) required the franchises to use flawed software that Domino's knew to be flawed. In disclosures to franchises, Domino's promised that Pulse would perform properly and that any errors would be remedied. In reality, the software did not perform as promised. The company did nothing to solve the problem," said Schneiderman during a news conference in New York City.
The attorney general added, "As a co-employer, as the cause of so many of these violations, as a active partner with franchisees in key employment decisions, Domino's and their franchisees are in this together."
"We are asking the court to order an accounting and order full restitution for the cheated workers," said Schneiderman.
Domino's spokesman Tim McIntyre said franchisees are solely responsible for hiring, firing and paying their employees. Nonetheless, he said, the company has worked with Schneiderman's office and franchisees to ensure employees are paid properly.
"The attorney general now wants the company to take steps that ... could impact the viability of the franchise model," he said.
Schneiderman's office since 2014 has settled cases with 12 other Domino's franchisees who had been accused of depriving workers of minimum wage and overtime pay.
Tuesday's lawsuit comes as McDonald's Corp faces a high-profile trial at the National Labor Relations Board on claims that it is liable for various labor violations because of the degree of control the company exerts over franchises.
The NLRB last year issued a controversial ruling that companies may be considered joint employers of contract workers if they possess even the potential to control working conditions.
Business groups say that ruling, which is being challenged in a federal appeals court, could upend labor contracting and the franchise model.
Robert Cresanti, president of the International Franchise Association, a trade group, said in a statement that the Domino's lawsuit was the latest instance of government agencies furthering a political agenda on behalf of unions. - Copyright Holder: REUTERS
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