Papa John’s Reaches Settlement Over Unpaid Training

Papa John’s and its workers have reached a settlement to end claims that the company violated labor law by not compensating for mandatory training. Now, the settlement awaits preliminary approval from a California federal judge.

Per the terms of the proposed settlement, Papa John’s has agreed to pay $3.4 million. From this amount, 30 percent would go to attorney fees, and $80,000 would go toward attorney costs. Additionally, $185,000 of the settlement amount would be used to administer the settlement to Class Members.

The remainder of the money would be used to compensate Class Members. Class Members who worked at a corporate-owned Papa John’s location would be eligible for the highest amount of compensation; they can receive up to $166 in cash compensation. In contrast, workers at franchises will receive $50 gift cards.

The settlement will end claims that the pizza company wrongly denied workers wages for time they spent completing mandatory training. According to the wage and hour claim, the training was online and had to be completed off-the-clock. Workers argued that they should have been paid for that time, especially since Papa John’s corporate website dictates that workers must be paid for training.

According to the workers, the company’s failure to pay for this training violated the Fair Labor Standards Act, a federal labor law, in addition to state laws in New York and California. A fact sheet for the Fair Labor Standards Act notes that work time should be compensated, even if it outside of the worker’s scheduled shift or hours of duty, because it is still a time that they are on duty. Allegedly, mandatory online training falls into this category.

The Business Journals also stresses that training falls under the category of work that must be paid if it is required by an employer. 

Who Is Responsible, the Franchise or the Corporation?

According to the workers, the practice of not paying workers for training that they completed affected both corporate employees and franchisee employees, so the distinctions between the two groups became a point of argument in the Papa John’s unpaid wages class action lawsuit. In particular, workers and the company debated whether or not Papa John’s was also considered an employer of those workers employed by individual franchisees, or if the franchisee was the sole employer.

Allegedly, both the corporate locations and the franchisees violated the corporate rules requiring workers to be paid for online training sessions. The workers also tried to preempt the company’s argument that local managers violated the company policy by failing to pay for online training, and that this was not indicative of corporate practices.

The workers said that in contrast, “the motive behind this head-in-the-sand defense is clear — Papa John’s wants to avoid paying for online training performed on its website.” Further challenging the potential defense that the company was unaware that workers were not being paid for training, the employees say that the company records the length of time it takes to complete online training and had knowledge of the work performed to complete the training.

Allegedly, Papa John’s own records indicate that the training required around 20 hours to complete. Based on this estimate, the maximum possible benefit to Class Members from the settlement was calculated at around $166.

The Papa John’s class action lawsuit was filed in 2018 by four Papa John’s employees. The wage and hour class action has since been amended multiple times, and the workers made a bid for conditional class certification in August 2018. Already, over 100 workers have opted into participating in the Papa John’s class action lawsuit.

Papa John’s has not admitted any wrongdoing in the online training labor law class action lawsuit, but has agreed to settle the claims to avoid the costs and risks of continuing to litigate the issue. In expressing a positive opinion for the settlement, the workers noted that the wage and hour class action lawsuit had brought up “significant factual and legal disputes” on a number of points, and given these disputes, a settlement seems to be a favorable outcome.

The Papa John’s Unpaid Training Wage and Hour Class Action Lawsuit is Case No. 8:18-cv-00871, in the U.S. District Court for the Central District of California.

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