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Domino's Pizza Successfully Fends Off Class Action Wage and Hour Lawsuit Claiming Delivery Driver Tips

February 2013

By: James B. Sherman, Esq.

On February 4, 2013, the United States Court of Appeals for the Eighth Circuit in Lukien v. Domino's Pizza, LLC ruled that a lower court improperly certified a class action against Domino's brought on behalf of its delivery drivers. The case centered on Domino's policy of charging $1.00 for pizza deliveries, exclusive of any tips received by its delivery drivers. The plaintiffs in this case alleged that they, along with a class comprised of approximately 1,600 delivery drivers in Minnesota, were entitled to at least a portion of the delivery charge under a Minnesota law that states any gratuity "deposited in or about a place of business for personal services rendered by an employee is the sole property of the employee." Minn. Stat. § 177.24 Subd. 3.

In overturning the class certification, the Court of Appeals cited to the Supreme Court's recent decision in Walmart v. Dukes and found too many "varying circumstances" among the delivery drivers that would make a "one stroke" determination impossible. For example, only some of Dominos' order takers or delivery drivers followed company policy and told customers the delivery charge was not a tip and not every customer asked about it. The court found this lack of commonality amongst the class of plaintiffs weighed against certifying a class action against Domino's for tips.

This case holds several lessons for employers. First, employers who concern themselves only with federal wage and hour laws (FLSA) may find themselves on the wrong end of expensive class action litigation brought under very different and nuanced state law provisions such as the one involved in this case regarding tips. Second, although counsel for these employees were ultimately unsuccessful in bringing a class action lawsuit, this case still illustrates the lengths to which plaintiff lawyers will go to cash in on a big class action payday. Third, class action claims sometimes can be thwarted by a sound and equally creative defense asserted by knowledgeable legal counsel. And finally, one cannot help but wonder whether this entire law suit might have been avoided if Dominos employees did not come to the conclusion, rightly or wrongly, that their tips were being impacted by the company's delivery charges and the potential for confusion amongst customers that tips were included in the charges.

Like many other states, Minnesota has a multitude of wage and hour laws that go far beyond federal wage and hour provisions. Unfortunately, these state laws can be the source of expensive class action litigation just as easily as the more well known federal laws. The attorneys of Wessels Sherman law firm can assist employers in complying with both federal and state wage and hour requirements and to avoid litigation, whether on an individual or class action claim. When it comes to wage and hour law, state or federal, the saying rings true: "An ounce of prevention [truly] is worth a pound of cure." For compliance advice, training, or self-auditing assistance, contact any of our experienced attorneys in Minnesota, Wisconsin, Illinois and/or Iowa. (Also look to attend our March 20, 2013 seminar entitled: Avoiding Common Pay Practice Pitfalls...see below).

Breakfast Seminar Series: Avoiding Common Pay Practice Pitfalls - March 20, 2013