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Domino’s Delivery Workers Settle Suit for $1.3 Million

Carlos Rodriguez Herrera said he often worked 65 hours a week as a deliveryman for a Domino’s pizza shop on East 89th Street in Manhattan but was paid for just 45 hours. A co-worker, Anatole Yameogo, remembers working from 10 a.m. to 8 p.m. one Saturday, but his pay stub said he worked just five hours that day.

“One manager told me you will work more than 50 hours a week but we’ll pay you for 40,” Mr. Yameogo said. “That helps the managers increase their bonus.”

Citing these and other complaints, the two bicycle deliverymen sued the Domino’s franchisee that employed them, accusing it of minimum wage and overtime violations. Eventually, dozens of delivery workers joined the lawsuit, and their lawyers announced on Friday that the Domino’s franchisee, DPNY Inc., had agreed to pay $1.28 million to 61 workers to settle the claims.

The awards will range from $61,300 to $400 per delivery person, depending on how long each worked for DPNY, which owns four Domino’s in Manhattan.

“It took three years of litigation, but it’s a great victory for them,” said Karen Cacace, a lawyer for the Legal Aid Society, which brought the case. “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.”

The lawsuit accused DPNY of many violations, among them, not giving a legally required lunch break, not paying for their uniforms, and paying a subminimum tip wage even when the workers did untipped work, like cleaning ovens and floors or distributing Domino’s fliers.

David Melton, the owner of DPNY, said he had settled “to get the situation behind us and move forward with our business.”

“In any dispute people say things that may or may not be true, and that is the case here,” Mr. Melton said. “We made some mistakes in our business.”

He added that in his 25 years running DPNY, “thousands of our team members over those years have greatly benefited from their relationships with us.”

Mr. Yameogo, who worked for DPNY from 2005 to 2009, said, “I knew they were stealing my hours, but I had no choice but to stay because I had a family to support.” He sends part of his earnings to his wife and children in Burkina Faso.

Mr. Rodriguez, an immigrant from Mexico, said he initiated legal action after he first complained to his manager that he had been improperly underpaid and was fired on the spot in 2007. “The boss would always tell people, ‘If you don’t like it here, the door is open to go elsewhere,’” he said.

Mr. Rodriguez took his complaint to the State Department of Labor, but after it did little on the case for two years, he turned to the Legal Aid Society. Midway through the lawsuit, DPNY filed for bankruptcy, saying it could not afford the potential liability. Lawyers from Shearman & Sterling worked pro bono to help the plaintiffs on bankruptcy and other issues.

Magistrate Judge James C. Francis IV of Federal District Court granted the plaintiffs’ request to include the national Domino’s Pizza company as a defendant, after the delivery workers asserted that it was a joint employer that knew or should have known about the franchisee’s alleged wage violations.

At a bankruptcy hearing, a lawyer for DPNY valued Domino’s contribution to the settlement at $140,000, in various forms, including waiving and delaying some of the franchisee’s payments. Ms. Cacace said Judge James M. Peck of federal Bankruptcy Court required a contribution from the national company as part of the settlement.

In a statement, Domino’s said it was “not ‘contributing’ to the settlement in any way.”

It said that Mr. Melton owed the company several hundred thousand dollars in back royalties.

“We are holding off in collecting that money,” the statement said, “so that he can use it to pay off his other creditors, including the parties involved in the settlement agreement.”

The lawsuit asserted that DPNY should have paid the full state minimum wage rather than the $5.65 tip wage for delivery workers because the company failed to keep proper records of their tipped hours and failed to properly explain tip wages.

“It was brave of these guys to come forward,” Ms. Cacace said. “You often get fired when you sue people.”