Papa John’s Once Again Pays for Wage Theft Practices

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Papa John’s Once Again Pays for Wage Theft Practices

Jessica Mason Pieklo

The order is the second against a Papa John's franchise owner for wage theft this year.

A New York Papa John’s franchise and its owner must pay delivery drivers more than $2 million for failing to abide by minimum wage laws, underreporting employee hours, and other abuses in the second high-profile wage theft judgment leveled against Papa John’s this year.

Manhattan Supreme Court Justice Joan Kennedy ordered the business to pay employees just over $2.1 million in back wages, reimbursed expenses, damages, and interest. New York Attorney General Eric Schneiderman in October sued the Papa John’s International Inc. franchisee, New Majority Holdings LLC, and its owner, Ronald Johnson.

Johnson, who owns five Papa John’s stores in Harlem, was named in 2002 as one of Crain’s New York Business’ “40 Under 40” rising stars in the New York business scene.

“Beyond making money, I’m getting to have an impact on other people’s lives,” he said in the profile. “I’m having a lot of fun.”

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Schneiderman filed suit on behalf of 400 delivery workers who allege Johnson failed to pay them overtime, rounded their hours down to the nearest whole hour, and forced them to pay for their bikes and other delivery equipment, which costs workers as much as $500 per year.

The lawsuit was the result of a year-long investigation by the attorney general’s Labor Bureau into New Majority’s pay practices. That investigation found delivery workers were often paid as little as $5 per hour, much less than the $7.25 hourly minimum wage that was required for most of the time period covered by the lawsuit.

Luis Juarez, one of New Majority’s employees involved in the suit, described the working conditions in a statement released following the judgment.

“Although my employers only paid me to make deliveries, they assigned me work on everything,” Juarez said. “I had to make pizzas, pack up the food, and organize boxes, all for a salary of $5.00 per hour. And when my bike was stolen on the street, my employers threatened to fire me from my job if I did not buy another one immediately.”

This is the second judgment this year against Papa John’s in New York. Schneiderman’s office in February announced it had obtained a wage theft order for almost $800,000 against Emstar Pizza, which operates seven Papa John’s franchise locations in Brooklyn and Queens.

Schneiderman is reportedly considering legal action against the franchisor, Papa John’s International Inc., in at least one of these wage theft cases on the theory that it is a joint employer and thus shares the liability for the actions of its franchisees. It’s an emerging theory in the fight over wages and working conditions for food service employees across the country.

The National Labor Relations Board, in a first of its kind ruling made in July, found McDonald’s to be a joint employer and thus liable for wage and labor violations at its franchise locations.

Should Papa John’s International be found to be a joint employer, it would provide employees affected by these judgements the opportunity to collect their stolen wages directly from the franchise’s corporate parent.

“I call on all fast food franchisors, including Papa John’s, to take steps necessary to ensure that their workersthe backbone of their business—are treated fairly and paid the wages the law requires,” Schneiderman said in a statement following the order.

“We will continue to investigate wage and hour violations in the fast food industry,” Schneiderman said. “More broadly, franchisors need to step up to the plate.”