March 12, 2014– When customers of Papa John’sPizza Franchise, in New York City, were charged a mandatory $1.50 “service fee” they were, falsely, led to believe this was a tip for the delivery driver; however, it was kept, entirely, by the franchisee employer. At least, this was among the allegations of the New York State Attorney General when he filed an employment lawsuit against the owner of five Papa John’s locations last year.
Last week, a New York State Supreme Court Judge agreed with the Attorney General when she ordered Papa John’s to pay, up to, six years in back wages, overtime, interest, and damages to these delivery drivers. The court found that, in addition to keeping the “service charges”, the Defendant had utilized the delivery drivers to do numerous employee related tasks during their down time and, therefore, should have been compensated as employees. The court indicated that the tasks assigned were outside of the purview of what a delivery driver is expected to do. The compensation and damage award is expected to exceed the sum of $2 million.
While the franchisee in this case has indicated an inability to satisfy the judgment, the drivers’ lawyers are considering whether the law will allow the franchisor, Papa John’s Corporate, to be held liable for the actions of the franchisee. Last year similar labor cases held the McDonald’s Corporate liable for certain, egregious employment actions of their franchisees.
Cases like this will, undoubtedly, have both store owners and Corporate Franchisors examining their daily, routine labor practices with an eye on the possibility of future litigation.
January 29, 2015– When NYC’s Mayor Bill de Blasio stood at the podium on Monday and said, “This could be a storm the likes of which we have never seen before” he was absolutely correct. While his meteorological prediction fell short by, almost, 20 inches, the financial impact of the storm was unprecedented, and devastating, for City and State workers. The total cost of lost wages and productivity are estimated at, conservatively, $160 million dollars, as a result of the State and City’s mandatory shut down of public transportation, roads, and manners of ingress and egress out of major municipalities. The actual cost may be, up to, four times that amount once all the damages are calculated.
In its 110 years of operation, the New York City subway system has never been closed for a snow emergency. The fact that the underground nature of most of the lines shields it from snow conditions has always been a justification against crippling this form of transportation. However, in this case, Governor Cuomo and the MTA President felt it prudent to cease operation of the system until after the storm had passed. This single edict by the Governor demonstrated the monumental reliance of New York City’s labor force and economy on its underground rail system. It also showcased the potential, in an economically fragile environment, that every governmental decision has on the economy of the region.
While it is easy to second guess the decision of the Governor and civic leaders on the decisions made during the storm, it seems clear that they were responding to the forecasts that were provided to them and were, clearly, looking to avoid loss of life, destruction of property, and a prolonged clean up. Unfortunately, we are in an economic climate where American workers don’t feel their financial situations can sustain, even one, “snow day” where they will be unable to recoup the wages, or lost opportunities. That is more an indictment of the current state of the economy than it is of a decision by leaders to protect citizens from harm during a storm.
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