Lawsuit: Chicago-Area Dunkin’ Donuts Systematically Stole Workers’ Wages

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Lawsuit: Chicago-Area Dunkin’ Donuts Systematically Stole Workers’ Wages

Michelle D. Anderson

“It’s part of a bigger project to improve the working conditions, for the employees’ health and safety,” said Lam Nguyen Ho, founder and executive director of the Community Activism Law Alliance and one of the plaintiff's attorneys.

Two Chicago-area residents have filed a lawsuit in federal court against a local Dunkin’ Donuts franchise, claiming the company repeatedly committed wage theft over the past decade.

Plaintiffs Christina Padilla and Jessica Zamudio alleged in a lawsuit filed May 4 that Sirajudden Virani, franchise owner, and Faisal Merchant, director of operations, failed to pay employees for overtime work and stole money from workers to compensate for cash register shortages.

Padilla, who said in the lawsuit that she regularly worked more than 40 hours a week, charged that the Dunkin’ Donuts franchise “frequently made deductions” from employees’ paychecks to make up for register shortages, but never secured workers’ permission to do so, as state law requires.

The lawsuit does not name corporate parent, Dunkin’ Brands, as a defendant.

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Wage theft among small businesses and national chains alike has drawn the attention of legislators on the local and state level in recent years. Research has shown that women are more likely than men to have wages stolen from them, and people of color are more likely than whites to experience losses via wage theft.

Padilla, 23, who was a shift supervisor at Dunkin’ Donuts, told the Chicago Tribune that she was forced to make up for register shortages and deduct time from employees’ recorded work hours. She told the Tribune last week that she once lost $160 due to a register shortage.

Virani, who owns three downtown Dunkin’ Donuts locations where the wage theft allegedly occurred, along with 13 other Chicago-area locations, told the Tribune that the wage theft accusations were false and that his business follows “the rules and regulations.”

Lam Nguyen Ho, founder and executive director of the Community Activism Law Alliance (CALA) and one of the plaintiff’s attorneys, told Rewire that several dozen workers are due lost wages for the alleged violations of federal overtime and state minimum wage laws. The lawsuit, which is aiming for class action status, isn’t just about recouping lost wages, he said.

“It’s part of a bigger project to improve the working conditions, for the employees’ health and safety,” Ho said.

Nguyen said he learned about the case through Arise Chicago, a nonprofit organization that works with immigrants and leaders from various backgrounds to end workplace abuse.

Arise Chicago is one of the grassroots groups CALA works with to provide free legal aid to highly vulnerable residents, such as undocumented immigrants, Ho said. The collaborations are part of a model of legal practice called “community activism lawyering,” which is designed to have greater impact on underserved people, he said.

Ho said CALA typically works with individuals, but the agency occasionally identifies groups it can help. The agency is working on a potential class-action lawsuit on behalf of local entertainers who work as dancers and strippers.

Wage theft is prevalent in the metropolitan Chicago area, researchers at the University of Illinois at Chicago reported in 2010.

Conducted by the university’s Center for Urban Economic Development, the study found that nearly half of 1,140 people who worked for low wages experienced at least one pay-related violation in the previous workweek. The employees lost about 16 percent their earnings, on average.

Likewise, wage theft is widespread among people who work for low wages in Pennsylvania, especially in Philadelphia, where there is a high concentration of immigrants and historically underrepresented people.

The Sheller Center for Social Justice at Temple University’s Beasley School of Law last year released, “Shortchanged: How Wage Theft Harms Pennsylvania’s Workers And Economy.” That report revealed an estimated 400,000 workers in Pennsylvania experience a minimum wage violation and more than 300,000 experience an overtime violation every workweek.

Ho estimated that about 100 Dunkin’ Donuts employees could be owed a yet-to-be determined amount in stolen wages. The defendants have until early June to formally respond to the lawsuit, he said.