Dunkin Donuts Stiffs Managers’ Overtime

Everett, MAIt’s the “dunk doughnuts, not wages” protest phrase over again for Dunkin Donuts. And perhaps add “over” to the phrase "time to make the donuts".

At least 60 fast food franchise managers were betting dollars to doughnuts that a Massachusetts federal judge would certify a collective class action alleging they were required to work more than 40 hours a week without overtime pay. 

A former Dunkin Donuts manager in Massachusetts claimed that the job's demands were difficult to meet and her pay was docked if she worked less than 48 hours weekly. U.S. District Judge Indira Talwani has now allowed plaintiff Tasha Moise to send notice to other managers who worked at the donut chain locations run by S&S Donuts LLC and Couto Management Group LLC in the three years before she brought her Fair Labor Standards Act lawsuit last November.

According to Law360, the defendants have denied the allegations. S&S Donuts and Couto Management Group—the companies that run the locations-- agreed to the collective action certification to "save all parties and the court some time and effort," but they objected to Moise's request to post notices in each of the Dunkin' Donuts locations.

Sending Notice by Mail

The store owners agreed to provide accurate information about currently employed managers but drew the line over notices being posted in the stores, arguing that it would not benefit former managers.

Moise wanted in-store postings so that current employees would be aware of the class action, arguing that they could have moved residences or changed email addresses. As well, the postings would remind managers who get the notice of the lawsuit and date to join and let current employees know that mailed and emailed notices of the collective action aren't junk mail or spam.

However, Judge Talwani on June 25th sided with the donut chain. It ruled that in-store postings weren't necessary because the locations didn't have multiple employees who could join the collective. Also, Moise will be able to send mail and email reminders to current and former managers, and a first-class mailing of the notice would ensure that they don't disregard it as junk.

The defendants are ordered to provide addresses and email addresses for current and former employees who qualify for the collective, and the managers will have 60 days to opt into the lawsuit. The case is Moise v. S & S Donuts LLC et al., case number 1:23-cv-12688, in the U.S. District Court for the District of Massachusetts.

Dunkin’ Donuts Wage Theft Complaint

Back in 2015 a former Dunkin Donuts shift supervisor filed a wage theft lawsuit in federal court. Lead plaintiff Christina Padilla only worked at the donut chain for a few months before she quit and claimed that more than a dozen Chicago locations made its workers pay for cash register shortages and altered time cards to avoid paying overtime. The Chicago Tribune reported that Padilla’s supporters chanted “dunk doughnuts, not wages” and Padilla told the newspaper that she was “real uncomfortable” being ordered to dock workers’ paychecks to make up for cash register shortages and to deduct time from their recorded work hours so that they only got paid for their scheduled shifts, even if they worked well beyond to finish up closing tasks. She told the Tribune that “the owners seem to rely on revolving doors of workers.”

Padilla’s lawyer told a news conference that, “we’re not just focused on wage theft but also trying to change how the entire Dunkin’ Donuts corporation will treat their workers.” Clearly, that change is taking some time. The old tagline “time to make the donuts", that once contributed to the nostalgia associated with Dunkin' Donuts (remember back in the 1980s when its commercials featured Fred Baker) is no doubt leaving a bad taste in some mouths.

According to an Indeed.com survey that asked over 493 current and former employees what the overtime policy was for their role at Dunkin', the most popular answer was “There's no overtime”. When asked about overtime rates, 63% said that there was no overtime pay.

Dunkin' also coughed up $120,000 in fines after a group of 10 Massachusetts franchisees violated child labor laws (via Mass.gov). Several Dunkin' locations had minors work more hours than allowed by state laws, and other locations did not have work permits for its minors.

And in 2019, a Dunkin Donuts franchise owner faced an almost $200K settlement for wage and hour violations it allegedly committed in 55 franchises throughout New York and New Jersey. The owner of the particular franchises did not pay the managers overtime because they collected a salary. However, the Fair Labor Standards Act (FLSA) requires that the any worker who earns a salary be paid at least $455 per week. The manager did not earn a guaranteed salary of $455 for all work weeks, and in some cases their pay was reduced when they worked less than 60 hours a week.

Manager Misclassification

In yet another overtime lawsuit filed several years ago by two Dunkin’ Donuts store managers in Massachusets against owner Cadete Enterprises, the plaintiffs said that Cadete required them to work at least a six-day, 48-hour work week, but they often worked more than sixty hours. They often had to substitute for crew members who are out sick or miss a shift for other reasons.
According to the lawsuit, the managers’ responsibilities include calibrating the equipment to company specifications, handling cash, keeping the store and grounds properly maintained, training and supervising the employees, periodically counting all non-perishable items in the store, and substantial paperwork. Because of the duties that each of the managers performed, the plaintiffs claimed that they are on the floor 90% of the time doing non-managerial duties and did not have time to perform managerial.

A New York Times article last year titled “You’re Now a ‘Manager.’ Forget About Overtime Pay”, revealed that many companies provide salaries just above the federal cutoff to frontline workers and mislabel them as managers to deny them overtime.
Because the legal definition of a manager is vague and little known — the employee’s “primary” job must be management, and the employee must have real authority — the mislabeled managers find it hard to push back, even if they mostly do grunt work. It featured a study which found that, from 2010 to 2018, manager titles in a large database of job postings were nearly five times as common among workers who were at the federal salary cutoff for mandatory overtime or just above it as they were among workers just below the cutoff. The study’s authors estimated that the practice of mislabeling workers as managers to deny them overtime, which often relies on dubious-sounding titles like “lead reservationist” and “food cart manager,” cost the workers about $4 billion per year, or more than $3,000 per mislabeled employee.

And the practice hasn’t decreased. Instead, experts believe that denying overtime pay is part of a broader strategy to drive down labor costs in recent decades by staffing stores with as few workers as possible, reported the NYT. If a worker calls in sick, or more customers turn up than expected, the misclassified manager is often asked to perform the duties of a rank-and-file worker without additional cost to the employer.

“Overtime to make the donuts”...