Workers Accuse Jimmy John’s Sandwich Chain Of Wage Theft

CREDIT: Flickr user fanofretail

A Jimmy John's store in Findlay, Ohio shares retail space with a high-interest lending storefront.

A pair of former employees say that sandwich shop chain Jimmy John’s commits systematic wage theft as a matter of corporate policy by forcing workers to put in off-the-clock hours and refusing to pay overtime, according to a lawsuit.

The two workers, who were employed at separate Jimmy John’s locations in Illinois, accuse the company of setting nationwide policies “that have caused the failure to pay for all hours worked, minimum wages and overtime wages” and enforcing those policies through the use of a computer monitoring system and mandatory nightly reports from individual store owners to corporate headquarters. The lawsuit names both Jimmy John’s itself and the franchisee who owns the two Illinois locations where the plaintiffs worked. In the past, Jimmy John’s franchisees have squashed unionization efforts and been accused of stiffing delivery drivers of wages.

The new lawsuit echos similar courtroom allegations against McDonald’s. Like the Jimmy John’s case, the several outstanding wage theft lawsuits against McDonald’s revolve around a corporate-provided computer system that is used to monitor labor costs in real time and which encourages managers to manipulate workers’ time cards in order to operate in the black at all times. Both sets of allegations also look to perforate the old legal firewall between corporate owners and franchise owner-operators. Franchise agreements have long been understood to shield the parent companies in these low-wage restaurant chains from legal consequences for business practices on the ground.

But the National Labor Relations Board recently determined that McDonald’s is responsible for how franchisees treat workers. The computer systems, franchise rules, and corporate visits to ensure compliance with policies sent down from the top combine to give the parent company practical control over working conditions in their stores. Former McDonald’s managers have described being told to manipulate workers’ time sheets to avoid paying overtime. In their new lawsuit, Karolis Kubelskas and Emily Brunner hope to force a similar evaluation of Jimmy John’s Enterprises’ legal responsibility for how franchisees run their shops.

If corporations start being held legally responsible for wage theft in the fast food business on a broad scale, the whole industry might see a shake-up. The status quo of very low prices for consumers, very high profits extracted by corporate parents from franchisees, and a pay disparity between CEOs and front-line workers of 1,200-to-1 seems to depend upon extensive wage theft. Nine out of 10 fast food workers reported wage theft in one survey this spring.

The other key to the fast food business model is taxpayer subsidies. Because the federal minimum wage is so far below the level required to support a family, low-wage workers of the sort fast food companies rely upon end up using hundreds of billions of dollars in public assistance each year. Those taxpayer-funded programs pick up the slack that companies like Jimmy John’s and McDonald’s refuse to cover for their workers, effectively padding profits for those companies and their shareholders in the process.

McDonald’s reported an annual profit of $5.6 billion in 2013. The average CEO of a fast food company got paid $23.8 million last year.