Franchisee found liable for underpaying employees - WDAM-TV 7-News, Weather, Sports-Hattiesburg, MS

Franchisee found liable for underpaying employees

NEW YORK, NY (WDAM) -

This is a news release from Attorney General Eric T. Schneiderman

Attorney General Eric T. Schneiderman announced that his office has obtained two separate judgments against Emstar Pizza, a Papa John's franchisee, and its owner and operator for underpaying employees. The violations include shaving workers' pay by under-reporting hours and rounding down hours worked to the nearest whole hour increment (and paying nothing for fractions of hours), as well as nonpayment of overtime premiums—all in violation of New York State Labor Law.

Kings County Supreme Court Justice Johnny Lee Baynes issued a judgment against Emstar Pizza Inc. operator Emmanuel Onuaguluchi for $789,507.06 in owed wages, uniform maintenance, liquidated damages, and interest to hundreds of employees who have worked for him over the past six years. In a separate consent order and judgment, Justice Baynes approved a settlement agreement that holds Emstar Pizza Inc. and its owner Uchenna Onuaguluchi jointly responsible for $541,337.61 of this amount in owed wages, liquidated damages, and interest. Both orders permanently enjoin Emstar Pizza Inc. and its owners and operators from selling any stores unless proceeds from the sale are held in escrow by the Attorney General, which the Attorney General may use to distribute as restitution to underpaid employees.

“This judgment sends a clear message that like every other business in New York, fast food employers must follow the law. Depriving workers of their wages or other lawful benefits hurts families and communities, and creates an unfair advantage for employers who don't play by the rules,” Attorney General Schneiderman said. “This Papa John's franchisee brazenly violated the law, shaving employees' hours and avoiding paying overtime by various means, including giving managerial-sounding titles such as ‘head driver.' We will continue to combat wage theft whenever and wherever we see it to protect the rights of hardworking New Yorkers.”

Both judgments stem from a lawsuit initiated by the Attorney General's Labor Bureau, following their investigation into Emstar's pay practices, supplemented by information provided by the United States Department of Labor. The judgment came after the Attorney General obtained a temporary restraining order prohibiting the sale of any stores after learning that Emstar Pizza and its owners and operators were seeking to sell their assets, which would have frustrated efforts to recoup wages they owe to their employees.

The Attorney General thanked the United States Department of Labor for its cooperation on this matter.

Prior to today's judgments, the Attorney General has previously reached several out-of-court settlements with fast-food franchises:

In March 2013, the Attorney General secured a settlement with six Domino's Pizza franchises, which collectively owned 23 restaurants throughout the state, for unpaid minimum wages, overtime, and vehicle expense reimbursements for delivery drivers. In March 2013, the Attorney General secured a settlement of almost $500,000 for mostly minimum-wage employees of New York City-based McDonald's franchises operated by the Cisneros Group and its owner Richard Cisneros. 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 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. In addition, in October 2014, the Attorney General sued another Papa John's franchisee, New Majority Holdings, LLC, and its owner, Ronald Johnson, for underpaying workers. That case is pending in New York County Supreme Court.

The Emstar/Papa John's pizza restaurants subject to the Court's orders are located at:

11702 Atlantic Avenue, Richmond Hill, New York 11419; 2838 Atlantic Avenue, Brooklyn, New York 11207; 63110 Woodhaven Boulevard, Rego Park, New York 11374; 3114 Farrington Street, Flushing, New York 11354; 1011 Broadway, Brooklyn, New York 11221; 9431 Rockaway Boulevard, Ozone Park, New York; and 9411 Rockaway Boulevard, Ozone Park, New York 11417 The case is being handled by Assistant Attorney General Kevin Lynch and Section Chief Andrew Elmore in the Attorney General's Labor Bureau, which is led by Bureau Chief Terri Gerstein. The Labor Bureau is within the Social Justice Division, and the Executive Deputy Attorney General for Social Justice is Alvin Bragg. The case was also investigated by New York Office of the Attorney General Investigators Edward Ortiz, Michael Leahy, Lawrence Riccio, and Michael Yun.

Copyright 2015 WDAM. All rights reserved.

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