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New York sues Domino's Pizza for wage theft

Staff writer ▼ | May 24, 2016
Domino's Pizza and three of its franchises could be required to pay employees a lot of dough if a newly filed New York lawsuit succeeds.
Domino's Pizza
Food companies   Underpaid workers at least $565,000
Domino's Pizza and three of its franchisees underpaid workers at least $565,000 at ten New York-based stores, the state's state's top legal official alleged in a court action.

Filed by New York Attorney General Eric Schneiderman, the lawsuit charges that Domino's itself should be legally deemed a joint employer of workers at the 10 franchise locations because the company played an active role in hiring, firing and disciplining store staffers and closely monitored job performance.

The company's oversight included requirements for employees, attire, appearance and grooming, including restrictions on the diameter of earrings and color of undershirts, an investigation by Schneiderman's staff found.

Domino's urged franchise operators to use the company's "PULSE" computer system even though executives knew the system had under-calculated gross wages for years, the investigation found. Domino's decided not to fix the flaw, treating the issue as a "low priority," the investigation also concluded.

The pizza giant and its franchisees used the PULSE system nationwide, the investigation found. Schneiderman, whose legal jurisdiction is limited to New York, plans to flag the investigation findings to legal counterparts in other states who potentially could could check for similar wage violations.

The allegations mark the latest legal attack by Schneiderman's office on companies suspected of underpaying low-wage workers, and his first effort to hold a corporate franchise legally responsible along with individual franchisees.