It might become the biggest tip in the history of New York pizza: a lawsuit cracking down on one of the country’s fast-food giants, linking its chain-business model to three franchise bosses charged with collectively owing workers more than half a million dollars in stolen wages.
According to a lawsuit filed by New York Attorney General Eric Schneiderman’s office last week, the Domino’s pizza empire and its franchise operators share the blame for years of cheating workers out of tipped wages and overtime pay. Both the parent company and the franchise operators are targeted as joint employers, charged with failing to adhere to wage-and-hour laws for workers. While wage theft is rampant throughout the restaurant business, the lawsuit alleges that the proprietary payroll software system Domino’s uses in its franchises is rigged to encourage cheating workers by design. A multi-year investigation has traced a digital paper trail from each pizza shop straight up to corporate headquarters.
The suit contends that Domino’s PULSE software system registered workers’ job data in a way that facilitated the undercounting of their hourly earnings, including tipped wages and overtime pay. But both the franchisees and the parent company worked in tandem to orchestrate a pattern of wage theft. State investigators contended that Domino’s
allegedly urged franchisees to use payroll reports from [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, deeming it a “low priority.”
The PULSE software served as an administrative database for basic business processes at each Domino’s outlet: “tracking pizza delivery information, maintaining store-specific data such as personnel data or product prices, acting as a timekeeping system in which employees clock in and clock out…tracking employee work tasks continuously, and recording tips.”
The lawsuit also alleges that Domino’s controlled many day-to-day operations in franchisees’ workplaces, including setting the budget and inventory and deciding which managers to hire. The company also regularly directed operators to “discipline employees, report back on that discipline, and terminate employees,” and sent corporate representatives to “inspect stores in person several times a year, often unannounced and without the franchisee present…. Domino’s representatives have given orders directly to employees…with one representative stating bluntly, ‘I’m your boss.’”