New York Times Reports On Settlement In Legal Aid Class Action Case On Behalf Of Pizza Delivery Workers

The New York Times reported on a settlement in a Legal Aid federal court class action case on behalf of pizza delivery workers. "It took three years of litigation, but it’s a great victory for them," Karen Cacace, the Supervising Attorney of The Legal Aid Society's Civil Practice Employment Law Unit, told the Times. "Hopefully it will inspire other delivery workers and low-wage workers to take action if they’re not being paid correctly, and hopefully it will make employers recognize that there can be a significant cost to violating wage laws," she said. "It was brave of these guys to come forward," Ms. Cacace added. "You often get fired when you sue people."

In Cano v. DPNY, et al., the Society’s Employment Law Unit, along with pro bono counsel Shearman & Sterling LLP, has represented pizza delivery workers in a class action law suit in federal district court against a franchise that operates four Domino’s Pizza stores, its owners and managers, and the corporate franchisor. The Domino’s workers came to Legal Aid through an organization the Society has worked closely with in several cases: the National Mobilization Against Sweatshops, ("NMASS"), a workers’ organization that was founded in NYC in 1996. Legal Aid and NMASS have worked together to support and represent workers in a wide variety of industries, including garment workers, domestic workers, restaurant workers, and workers who did clean up following the 9/11 disaster.

The allegations in the case against Domino’s involved systemic wage theft by forcing workers to work off the clock and removing work hours from their time records. The claims were for unpaid minimum wage and overtime, violations of the tip credit rules, and retaliation against workers who complained about these practices, among others. After conditional certification of a collective action was granted, the claim grew to include more than 60 current and former delivery workers from countries as diverse as Mexico, Bangladesh, and Burkina Faso.

Although the case was originally brought only against the franchise and store managers, Legal Aid gathered sufficient evidence in discovery to seek to amend the complaint to include corporate Domino's, the franchisor. Holding a franchisor responsible for wage violations of its franchisees is not often litigated, but was critical in this case because the defendant franchise filed for bankruptcy. Based on the Plaintiffs' allegations of corporate Domino’s involvement in training local store owners, collecting and maintaining payroll data, and establishing policies and procedures that governed the working conditions of workers, the court allowed Plaintiffs to amend their complaint to include corporate Domino’s as a defendant.

A settlement in the case has now been approved by the bankruptcy court. As outlined in the documents submitted to the court, the settlement provides a total of $1.282 million to be paid by defendants, with almost $1.2 million of that amount going to the workers, who will receive compensation in proportion to the number of weeks they worked at the stores. In addition, the settlement includes some prospective components – most critically, the franchise will now pay the full minimum wage to its delivery workers instead of a lower “tipped” wage. Under the settlement, corporate Domino’s is contributing to the settlement amount by forgiving an interest payment the franchise owed to Domino’s, lowering its interest rate on some payments, and deferring payments owed by the franchise until after the workers are paid. Defendants began making the first round of payments to the workers at the end of December.

The Legal Aid Society's staffing for this case consists of: Supervising Attorney Karen Cacace, Staff Attorneys Richard Blum and Hollis Pfitsch, and Paralegals Jean Marie Miranda and Russell Greene. From Shearman & Sterling, the staffing includes: Partners Douglas Bartner, Adam Hakki, and John Nathanson; Counsel Susan Fennessey and Jill Frizzley; Associates Darren Ishmael, Randall Martin, Mojoyin Onijala, James Park, and Doreen Xia; and Technology Support Staff Carine Rubinetti and Marek Januszewski.

The New York Times
Domino’s Delivery Workers Settle Suit for $1.3 Million
By Steven Greenhouse
February 1, 2014

Carlos Rodriguez Herrera said he often worked 65 hours a week as a deliveryman for a Domino’s pizza shop on East 89th Street in Manhattan but was paid for just 45 hours. A co-worker, Anatole Yameogo, remembers working from 10 a.m. to 8 p.m. one Saturday, but his pay stub said he worked just five hours that day.

"One manager told me you will work more than 50 hours a week but we’ll pay you for 40," Mr. Yameogo said. "That helps the managers increase their bonus."

Citing these and other complaints, the two bicycle deliverymen sued the Domino’s franchisee that employed them, accusing it of minimum wage and overtime violations. Eventually, dozens of delivery workers joined the lawsuit, and their lawyers announced on Friday that the Domino’s franchisee, DPNY Inc., had agreed to pay $1.28 million to 61 workers to settle the claims.

The awards will range from $61,300 to $400 per delivery person, depending on how long each worked for DPNY, which owns four Domino’s in Manhattan.

"It took three years of litigation, but it’s a great victory for them," said Karen Cacace, a lawyer for the Legal Aid Society, which brought the case. "Hopefully it will inspire other delivery workers and low-wage workers to take action if they’re not being paid correctly, and hopefully it will make employers recognize that there can be a significant cost to violating wage laws."

The lawsuit accused DPNY of many violations, among them, not giving a legally required lunch break, not paying for their uniforms, and paying a subminimum tip wage even when the workers did untipped work, like cleaning ovens and floors or distributing Domino’s fliers. David Melton, the owner of DPNY, said he had settled "to get the situation behind us and move forward with our business."

"In any dispute people say things that may or may not be true, and that is the case here," Mr. Melton said. "We made some mistakes in our business."

He added that in his 25 years running DPNY, "thousands of our team members over those years have greatly benefited from their relationships with us."

Mr. Yameogo, who worked for DPNY from 2005 to 2009, said, "I knew they were stealing my hours, but I had no choice but to stay because I had a family to support." He sends part of his earnings to his wife and children in Burkina Faso.

Mr. Rodriguez, an immigrant from Mexico, said he initiated legal action after he first complained to his manager that he had been improperly underpaid and was fired on the spot in 2007. "The boss would always tell people, ‘If you don’t like it here, the door is open to go elsewhere,’" he said.

Mr. Rodriguez took his complaint to the State Department of Labor, but after it did little on the case for two years, he turned to the Legal Aid Society. Midway through the lawsuit, DPNY filed for bankruptcy, saying it could not afford the potential liability. Lawyers from Shearman & Sterling worked pro bono to help the plaintiffs on bankruptcy and other issues.

Magistrate Judge James C. Francis IV of Federal District Court granted the plaintiffs’ request to include the national Domino’s Pizza company as a defendant, after the delivery workers asserted that it was a joint employer that knew or should have known about the franchisee’s alleged wage violations.

At a bankruptcy hearing, a lawyer for DPNY valued Domino’s contribution to the settlement at $140,000, in various forms, including waiving and delaying some of the franchisee’s payments. Ms. Cacace said Judge James M. Peck of federal Bankruptcy Court required a contribution from the national company as part of the settlement.

In a statement, Domino’s said it was "not ‘contributing’ to the settlement in any way."

It said that Mr. Melton owed the company several hundred thousand dollars in back royalties.

"We are holding off in collecting that money," the statement said, "so that he can use it to pay off his other creditors, including the parties involved in the settlement agreement."

The lawsuit asserted that DPNY should have paid the full state minimum wage rather than the $5.65 tip wage for delivery workers because the company failed to keep proper records of their tipped hours and failed to properly explain tip wages.

"It was brave of these guys to come forward," Ms. Cacace said. "You often get fired when you sue people."