Domino’s Claims Calif. Wage and Hour Class Must Arbitrate

A California wage and hour class action lawsuit against Domino’s, the popular pizza chain, has hit a snag, as Hishmeh Enterprises (dba Dominos Pizza) has disputed a delivery driver’s claim for minimum wage law violations involving mileage reimbursement, claiming that the plaintiff is bound by an agreement to arbitrate his claim individually and not as a class action lawsuit.

The proposed wage and hour class action lawsuit, filed against 70 Domino’s franchise stores in California and Arizona by a delivery driver, alleges Domino’s fails to reasonably reimburse drivers for the costs of using personal vehicles for work, violating the Fair Labor Standards Act (FLSA) and numerous California labor laws.

Plaintiff Derek G. alleges franchise operator Hishmeh Enterprises Inc. uses a flawed method to determine mileage reimburse rates, resulting in the company paying their delivery drivers below the California minimum wage. According to the wage and hour lawsuit, it typically pays $1 per trip, a reimbursement that does not accurately reflect costs incurred by drivers.

The Domino’s Pizza wage and hour lawsuit further claims that Hishmeh’s “systematic failure” to provide adequate reimbursement constitutes a “kickback,” such that hourly wages paid to its drivers are not free and clear, resulting in net wages that fall beneath federal and state minimum-wage requirements in violation of the FLSA and state labor codes.

“The net effect of defendant’s flawed reimbursement policy is that it willfully fails to pay the federal and state minimum wage to its delivery drivers,” according to the Domino’s wage and hour class action lawsuit filed in California federal court. “Defendant thereby enjoys ill-gained profits at the expense of its employees.”

The California wage and hour class action lawsuit further alleges all Hishmeh drivers have similar experiences because they operate under the same reimbursement policy. The plaintiff seeks to include an estimate of several hundred current and former Hishmeh delivery drivers in California over the past four years.

However, Dominos Pizza is claiming that Derek voluntarily agreed to arbitrate on an individual basis and indicated his agreement by voluntarily signing off on arbitration terms when he was initially hired as a delivery driver.

Overview of California Minimum Wage Laws

In the state of California, minimum wage as of July 1, 2014 is $9 per hour (an increase of $1), and a further increase to $10 per hour is scheduled for July 1, 2016, which is higher than the federal minimum wage of $7.25.

Generally, California employers cannot use other costs of employment to decrease the minimum wage required. Employers cannot use tips to reduce the minimum wage or decrease the minimum wage by the cost to provide and maintain uniforms. If an employee agrees voluntarily in writing, however, an employer can decrease the minimum wage by the cost of meals and lodging.

Unlike federal law, there are penalties for underpayment of wages, paying wages with insufficient funds, failure to provide meal or rest breaks, failure to provide one day’s rest in seven, and failure to pay wages timely upon termination. Additionally, under California labor law, there are penalties for unlawful deductions from wages.

The Dominos Pizza California Wage and Hour Lawsuit is Case No. 2:15-cv-02175, in the U.S. District Court for the Central District of California, Western Division.

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