Domino’s Deal Heralds FLSA Woes for Fast-Food Chains

February 4, 2014 – In The News

Carolyn Richmond and Glenn Grindlinger were quoted in the Law360 article “Domino’s Deal Heralds FLSA Woes for Fast-Food Chains.” While the full text can be found in the February 4, 2014, issue of Law360, a synopsis is noted below.

An unusually large settlement recently scored by delivery workers from a Domino’s Pizza Inc. franchisee over alleged Fair Labor Standards Act violations included some surprising provisions that go beyond the average deal and unexpectedly implicated the franchisor – a combination that should have other brand named restaurant chains worried.

While Domino’s became entangled in helping cover the settlement affiliated with New York City franchisee DPNY Inc. through unique circumstances, its presence in the matter and several significant promises that were exacted from the franchisee should have fast-food chains on the watch for increasingly fierce FLSA fights.

“If I’m a franchisor, I’m going to be nervous now – across the country – about what my franchisee is doing” said Richmond.

The settlement could also help bolster other FLSA plaintiffs’ efforts to drag the mother-ship brand company into such fights. “This is somewhat nerve-racking when you have a rash of similar lawsuits over the last 10 years,” Richmond said.

Because Domino’s was linked as having a significant role in the training programs and payroll management of DPNY, the brand company agreed to several concessions. This unusual involvement with the company threw some unique wrinkles into the case.

“Such an involvement in the franchisee is not something you typically see,” said Grindlinger.

However, that kind of legal support is popping up more often and is another reason employers should be wary of getting hit with one of these suits, according to Richmond. “You get a lot of great legal minds being thrown at these cases,” she said.

FLSA suits have become increasingly popular over the last decade. “I’ve been noticing an increasing in filings, certainly on delivery worker cases,” Richmond said.