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LAS and Shearman & Sterling LLP Reach Settlement in Class Action on Behalf of Delivery Workers

Wednesday, March 05, 2014

  • Organization: The Legal Aid Society

After years of litigation, The Legal Aid Society has reached a settlement in a 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 New York 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.

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