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DOMINO’S FRANCHISE WAGE AND HOUR LAWSUIT SETTLES

Posted by Kashif Haque | Sep 29, 2016 | 0 Comments

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The class action lawsuit against a Georgia Domino's franchise has settled, awarding class members $995,000 collectively. The lawsuit was initially filed in 2015, and aimed to recover the unpaid wages due delivery drivers for the chain, who were not properly reimbursed for the use of their personal vehicles. Not being paid enough to cover vehicle expenses caused the drivers' pay to dip below the federal minimum wage at times.

Defendants Cowabunga Inc. and Cowabunga Three LLC are one of the largest Domino's franchises in the country, with over 100 stores across 3 states (Georgia, South Carolina, and Alabama). According to the company website, they employ over 1,800 people. Ironically enough, the company website also touts their company values to include “respect, responsibility, trust, fairness, and contribution”. A total of 565 drivers opted into the lawsuit, which means the average amount each individual will receive is $1,138. The named plaintiff Chadwick Hines will also receive a $7,500 service award. Chadwick was employed by the company in Savannah, GA from approximately April to October of 2014.

The minimum wage violation occurred because while the company reimbursed their drivers, the amount was too little to compensate for out of pocket costs drivers incurred by using their own personal vehicle to make deliveries. By using their personal vehicles, drivers became responsible financially for upkeep of the car including the cost of gas, insurance, vehicle maintenance, and depreciation. According to the court complaint, drivers were reimbursed only one dollar per delivery. The IRS reimbursement rate for the applicable period of time ranged from $.55-$.57 per mile, while AAA found that the average cost to drivers in the job field (who drive a sedan) was actually $.592-$.608 per mile. Per the complaint, “The driving conditions associated with the pizza delivery business cause more frequent maintenance costs, higher costs due to repairs associated with driving, and more rapid depreciation from driving as much as, and in the manner of, a delivery driver. Cowabunga's delivery drivers further experience lower gas mileage and higher repair costs than the average driver used to determine the average cost of owning and operating a vehicle described above due to the nature of the delivery business, including frequent starting and stopping of the engine, frequent braking, short routes as opposed to highway driving, and driving under time pressures.” Because Cowabunga only reimbursed drivers $1 per delivery, an average delivery of 5 miles round trip means that drivers were only being reimbursed $.20 per mile. The drivers should have received, at the very least, $2.80 reimbursement per delivery. With all of the out of pocket costs factored in, the drivers received an hourly pay rate of only $3.65-$4.95 per hour – far below the federal minimum wage of $7.25 per hour. The complaint also mentions that several employees brought these pay issues to the attention of the management, but nothing was ever done to address the concerns.

The suit alleges a violation of the FLSA (The Fair Labor Standards Act), which is a “federal law that protects employees' rights in order to ensure workers receive fair wages, are fully compensated for all hours worked, and work in a safe work environment. The law ultimately protects workers from potential exploitation or abuse from employers.”

Many people don't realize it, but delivery drivers (and others who drive for a living) are often subject to many forms of wage and hour violations. Aside from not being reimbursed for vehicle expenses such as gas and insurance as this lawsuit mentions, they are also typically vulnerable to lost lunches and breaks. Because more often than not they are the sole operator of the vehicle, no one is there to relieve them for breaks and lunches when they are on a time crunch or have a deadline to meet. Additionally, there is no manager there to ensure a break or lunch occurs. Cases such as this one are rampant in the driver work field.

About the Author

Kashif Haque

Kashif Haque is a trial attorney and one of the founding attorneys of Aegis Law Firm. He served as the 2015 Chairman of the Orange County Bar Association—Labor and Employment Section. Mr. Haque has obtained millions of dollars on behalf of his clients through trial, arbitration and settlement. A...

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