A.G. Schneiderman Obtains Judgment For More Than $2 Million Against Papa John’s Franchisee That Underpaid Employees
March 6, 2015
NEW YORK – Attorney General Eric T. Schneiderman announced that his office has obtained a judgment against New Majority Holdings, LLC (New Majority) a Papa John’s pizza franchisee, and its owner and operator Ronald Johnson for underpaying hundreds of delivery workers at five Harlem pizza restaurants.
“Within the last two months, courts have found that two Papa John’s franchisees owe almost $3 million to their workers,” said Attorney General Schneiderman. “We will continue to investigate wage and hour violations in the fast food industry. More broadly, franchisors need to step up to the plate. I call on all fast food franchisors, including Papa John’s, to take steps necessary to ensure that their workers — the backbone of their business — are treated fairly and paid the wages the law requires. “
New Majority and Johnson violated New York Labor law by, among other things:
- Rounding down workers’ hours worked to the nearest whole hour increment (and paying nothing for fractions of hours);
- Failing to pay legally-required overtime premiums;
- Paying delivery workers the lower, “tipped” minimum wage, even though they were assigned to a substantial amount of untipped kitchen and other work;
- Failing to reimburse employees for costs of purchasing and maintaining bicycles used to make deliveries.
New York County Supreme Court Justice Joan M. Kenney’s February 24, 2015 judgment, filed on March 3, 2015, orders New Majority and Johnson to pay $2,126,166.34 in owed wages, unreimbursed expenses, liquidated damages, and interest. Monies recovered under this judgment will be distributed by the Attorney General to the underpaid employees of all five stores. The judge’s order also requires payment of proceeds from any sale of New Majority’s stores to the Attorney General, and requires New Majority to comply with the New York Labor Law going forward.
Both judgments stem from a lawsuit initiated by the Attorney General’s Labor Bureau, following an investigation into New Majority’s pay practices.
The New Majority/Papa John’s pizza restaurants subject to the Court’s orders are located at:
- 703 Lenox Ave, New York, NY 10039-4501
- 301 Cathedral Parkway, New York, NY 10026;
- 2119 First Avenue, New York, NY 10029
- 3477 Broadway, New York, NY 10031
- 327 Lenox Avenue, New York, NY 10027
“It’s a shame that such a profitable company like Papa John’s would undercut its workers’ pay,” said Congressman Charles Rangel. “This is not only grossly unlawful but also downright disrespectful to the people who are working so hard to serve its customers. I applaud the Attorney General for holding the company accountable and join him and my colleagues in demanding fair wages for the workers who deserve fair play and pay.”
“As we fight to raise the minimum and tipped wage in New York City, it’s important to take action against bad actors like New Majority — which has been routinely underpaying hundreds of delivery workers,” said New York City Comptroller Scott Stringer. “Attorney General Schneiderman deserves great credit for uncovering this company’s illegal scheme which will allow these hard working men and women to finally get the higher pay they deserve.”
“Wage theft is a pervasive problem in New York City and I commend Attorney General Schneiderman for his hard work bringing justice for these workers,” said New York City Council Speaker Melissa Mark-Viverito. “No worker should worry about their wages and I look forward to continuing to work with the Attorney General as we seek to hold bad actors accountable.”
“Employers who violate the law by not paying their employees the money they deserve make it even more difficult for hard working New Yorkers to get by,” said New York State State Senator Adriano Espaillat. “I commend Attorney General Eric Schneiderman for investigating these violations and sending a clear message, to businesses that cheat employees out of their wages, they will be discovered and prosecuted.”
“The labor law violations committed by this Papa John’s franchisee are an insult to their hard working and dedicated employees,” said New York State Senator José M. Serrano. “At a time when the cost of living in this city continues to climb at an alarming rate, it is imperative that all workers get the fair wages that they’ve rightfully earned. Many thanks to Attorney General Eric T. Schneiderman for ensuring that working New Yorkers have a strong voice to protect their right to a fair and just workplace.”
“I commend Attorney General Eric Schneiderman for securing a strong and resounding judgment that stands up for the fundamental rights of workers here in Harlem,” said New York State Senator Bill Perkins. “The exploitative labor practices by a group of bad actors offends us all; robbing hard working women and men of wages that they had rightfully earned through diligence and dedication is unconscionable. I am heartened that these unlawful businesses have been exposed to the light of justice and I further hope that this judgment will be a beacon that empowers workers all across our City.”
“Today’s judgment is a reminder that our laws are designed to protect workers from exploitation,” said New York State Assemblymember Daniel O’Donnell, whose district includes one of the locations. “I want to offer my heartfelt congratulations to the delivery workers of Papa John’s franchises located on the Upper West Side and Harlem. You spoke out against unjust labor practices. Through this litigation, Attorney General Schneiderman signals that businesses that do not comply with labor laws will be brought to justice. This action will lead to better labor conditions across New York State going forward.”
“We are proud to stand by Attorney General Schneiderman in his crackdown on employers who deploy unfair wage practices at their businesses,” said New York City Councilmember Mark Levine. “It is appalling how widespread this problem is and it violates the rights of some of our most vulnerable workers. Employers need to know that we will never stand by and allow them to mistreat and abuse workers, and that we will continue to call them out and expose them when they do.”
“I would like to congratulate Attorney General Eric Schniederman on successfully obtaining a judgment order against New Holdings for their role in denying the full wages earned by Papa John employees. Your continued efforts to ensure all New Yorkers are fairly treated under the law is a mission from which you have not waivered,” said Council Member Inez E. Dickens. “I would also like to commend those workers who were bold enough to tell their story, knowing what the repercussions could have been. They decided that their right to be compensated for their time and energy was worth they fight, and this judgment has rewarded them for their efforts.”
“We congratulate Attorney General Schneiderman on his aggressive pursuit of bad actor employees like Papa John’s who cheat their workers out of their hard-earned pay,” said Jonathan Westin, executive director of New York Communities for Change. “This $2 million judgment for fast food workers joins others for millions of dollars on behalf of car wash workers and airport workers and it stresses the point that now, more than ever, workers need a $15 minimum wage and hour laws, especially for low-wage workers who can barely afford to live.”
“Today’s action by Attorney General Schneiderman – on top of his crackdown on car washes and airport contractors who failed to pay workers what they deserve – is a positive sign that unscrupulous owners will not be tolerated in New York State,” said Deborah Axt, co-executive director of Make The Road New York. It is crucial that our lowest wage workers, and immigrant families in particular, be given the same protections of the law as everyone else. We look forward to working with the Attorney General to continue fighting on behalf of these workers.”
“I worked at the Papa John’s that was at 142nd Street and Broadway,” said Luis Juarez, one of New Majority’s employees. “Although my employers only paid me to make deliveries, they assigned me work on everything. 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 the on the street, my employers threatened to fire me from my job if I did not buy another one immediately. I want to thank the Attorney General and the people who have helped us get our wages back and enforce our rights. I ask my colleagues not remain silent against injustice, and to demand payment for the hard work they do.”
Earlier this year, the Attorney General obtained a nearly $800,000 judgment against the operator of another Papa John’s franchisee, Emstar Pizza, Inc. In addition, the Attorney General has several ongoing investigations in the fast food industry, and has also reached several out-of-court settlements with fast-food franchises:
- In December 2013, the Attorney General obtained reinstatement for 25 workers at a Domino’s Pizza franchise located in Washington Heights, in New York City.
- In March 2014, the Attorney General secured settlements with six Domino’s Pizza franchises, which collectively owned 23 restaurants throughout the state, totaling $450,000 for unpaid minimum wages, overtime, and vehicle expense reimbursements for delivery drivers.
- In March 2014, the Attorney General secured a settlement of almost $500,000 for mostly minimum-wage employees of a group of seven New York City-based McDonald’s franchises.
- In June 2014, the Attorney General obtained $10,000 in restitution for an employee unlawfully discharged after reporting a gas leak at a McDonald’s franchise located in Lyons, in upstate New York.
The New Majority case was handled by Assistant Attorney General Elizabeth Wagoner, Section Chief Andrew Elmore, and Special Counsel Patricia Kakalec in the Attorney General’s Labor Bureau, which is led by Bureau Chief Terri Gerstein. Investigator Michael McNally also assisted the investigation. The Labor Bureau is within the Social Justice Division, and the Executive Deputy Attorney General for Social Justice is Alvin Bragg.