New York Court Holds That Franchisor is Not Responsible for Franchisee’s Wage and Hour Violations

New York Court Holds That Franchisor is Not Responsible for Franchisee’s Wage and Hour Violations

      In a trio of decisions rendered by the US District Court for the Southern District of New York, it was held that Domino’s, as the franchisor, is not a “joint-employer” liable for the franchisees of alleged low-wage and hour violations. Kucher v. Domino’s Pizza, Inc., Case No. 1:16-cv-02492 (AJN) (SDNY), De Los Santos v. Hat Trick Pizza, Inc., Case No. 1:16-cv-06274 (AJN), Gannon v. Domino’s Pizza Inc., Case No. 1:18-cv-00846 (AJN) (S.D.N.Y.) (consolidated with the Kucher case).

      The cases turned upon whether Domino’s, as the franchisor, would be treated as an “employer” under the Fair Labor Standards Act (“FLSA”). That determination would turn upon the degree to which Domino’s exerted control over how the franchisee handled its labor situation. In this instance, Domino’s was not a joint employer because it did not make decisions as to the hiring or firing of individual employees, control their scheduling, or provide supervision as to how they perform their respective responsibilities. While Domino’s required the franchisees to perform background checks on applicants and set store hours, those controls were not sufficient to create and employer relationship

      This decision is another in a string in which efforts to hold franchisors liable for the misconduct of individual franchisees has been largely rejected.  HERE IS A LINK to a prior review of the question.