Domino’s Worker Brings Pizza Chain into Joint Employer Debate with Class Action
Riad Kucher, a former Domino’s Pizza employee, brought a class-action lawsuit this month against the national pizza chain alleging wage-and-hour violations.
Among the violations alleged in the complaint for Kucher v. Domino’s Pizza Inc. were minimum wage, overtime, and off-the-clock violations of New York state law. For example, though Kucher and his fellow employees “would ‘clock-out’ at the end of third scheduled shifts, [Domino’s] forced them to continue working for hours thereafter.” Kucher says he “was regularly scheduled to work approximately 40 to 45 hours per week, usually in eight to nine hour shifts, six days per week. However, with all the off-the-clock work, he actually worked well in excess of his scheduled hours, and usually in the range of 65 hours per week.”
What makes the lawsuit interesting is that Kucher is not just filing suit against the individual Domino’s franchise locations he worked for, but against the Domino’s Pizza corporation as franchisor. The lawsuit alleges that Domino’s Pizza, as a franchisor, is a joint employer of Kucher along with the franchises he worked at.
Franchisors as Joint Employers in Labor Law
Whether a corporation can be held as a joint employer with its franchisees is currently a hot-button issue in American labor law.
“Joint employers” are separate business entities that hire or control the same employees. In August of last year, the National Labor Relations Board (NLRB) issued its decision in Browning-Ferris Industries, a landmark labor law case that changed the standard for who could be considered a “joint employer” for the purposes of collective bargaining. In Browning-Ferris, a group of workers employed by a staffing agency called Leadpoint were assigned to work at a recycling plant run by Browning-Ferris Industries (BFI). The workers attempted to form a union and desired to bring both Leadpoint and BFI to the bargaining table, as both business entities retained control over the workers’ work, including wages, hiring decisions, and when overtime work was needed.
The NLRB held that Leadpoint and BFI were joint employers of the workers. In doing so, the NLRB lowered the standard for who could be considered a joint employer; for example, the alleged joint employer no longer had to exercise direct control over the workers, but simply had to retain a degree of indirect control for a finding of joint employer liability. The decision outraged many business-interest groups and conservatives, but its notable that the NLRB was not simply inventing these standards; in fact, the NLRB was returning to earlier, pre-Reagan era standards for joint employer liability, erasing additional standards that had been unnecessarily imposed through NLRB decisions of the past three decades.
The Browning-Ferris decision was significant because it paved the way for a finding of joint employer liability in a more well-known case, McDonald’s USA, involving McDonald’s and the SEIU. McDonald’s has long avoided a finding of joint employer liability in regards to individual fast food workers because McDonald’s is a franchisor, like Domino’s. As the individual McDonald’s franchise locations were the employer of the fast food workers, the McDonald’s USA, LLC corporation could never be held responsible for the franchisees’ labor and employment law violations.
The Browning-Ferris decision likely changed that; the lower standards for a finding of joint employer liability likely point to a finding of liability for McDonald’s in McDonald’s USA. At the time of writing, the NLRB trial for McDonald’s USA is entering its second month, with the General Counsel of the NLRB pushing for a finding of joint employer liability for the McDonald’s corporation.
Franchisors as Joint Employers in Kucher case
Though it touches on the same hot-button issue, Riad Kucher’s class action lawsuit is a different animal from McDonald’s USA.
In McDonald’s USA, the plaintiffs, fast food workers represented by the SEIU, brought unfair labor practice charges against McDonald’s. This is why the case is currently before the National Labor Relations Board instead of a court; as a labor law matter, the NLRB will decide on the validity of the unfair labor practice charges and whether to hold McDonald’s as a joint employer responsible for them.
In Kucher, Kucher has brought suit directly against Domino’s Pizza Inc. in federal district court. The complaint alleges violations of New York state employment law, and Kucher is not represented by a union, instead representing a class of individuals who worked at the Domino’s franchise locations named in the complaint.
Thus, the case should not be considered in exactly the same line as Browning-Ferris and McDonald’s USA. However, it is likely the NLRB decisions, particularly its eventual decision in the McDonald’s case, will be influential in how Kucher’s class action turns out. Federal judges are not bound by the NLRB’s decisions, but consider them when the litigation involves similar issues to labor law issues that have come before the NLRB.
Here, the key issue will again be the degree of control Domino’s Pizza Inc. had over the individual employees of its franchisees. The complaint alleges that, among other things, Domino’s Pizza Inc. trained employees like Kucher, and additionally controlled the employees work by “performing routine inspections of its franchise locations…, setting policies and procedures that must be followed by franchisees and their employees, controlling advertising, and regulating employee behavior, such as by dictating employee uniforms.” Like in McDonald’s USA, if the federal court finds Domino’s Pizza Inc. held a sufficient degree of control over franchisee employees like Kucher, it will likely hold Domino’s Pizza Inc. to be a joint employer.
Again, the NLRB’s decision in McDonald’s USA will have no binding authority over the federal court deciding Kucher v. Domino’s Pizza Inc. The issue, though, of corporate control over franchisee workers is largely the same. If the NLRB finds McDonald’s to be a joint employer of its franchisees’ employees, there is a good chance the federal district court will do the same to Domino’s in Kucher. Such a decision would be a boon to low-wage workers of franchises and pave the way for litigation on top of unfair labor practice charges when the franchises violate these workers’ rights.