More than 500 current and former employees of 75 Taco Bells across Michigan have joined a collective action lawsuit alleging that the restaurants' franchise owner cheated them out of overtime pay.
The lawsuit against the Brighton-based franchise company, Sundance, claims it capped workers' paychecks at 40 hours a week, even when they worked more hours and were entitled by federal law to time-and-a-half overtime wages.
To prevent overtime from kicking in, the Taco Bell workers were at times instructed to clock out, but keep working. Other times, Sundance would "shift" workers' overtime hours to the following week so those hours would be counted as regular time and not overtime, according to the lawsuit in U.S. District Court in Detroit.
An attorney for the plaintiffs, Megan Bonanni of Pitt McGehee Palmer & Rivers in Royal Oak, said Tuesday that about 520 people who worked at the Sundance Taco Bells between 2013 and now responded this winter to notices in the mail about the collective action lawsuit, opting to join it.
The lawsuit was first filed in 2016. The deadline for plaintiffs to join is now over.
Lawyers for Sundance have denied all the claims about unpaid overtime in court filings, noting that employees were instructed to immediately notify a manager or Sundance's human resources department if they spotted discrepancies between their work hours and pay stubs.
A woman who answered the phone for Sundance on Tuesday referred all comment to Taco Bell.
Taco Bell issued a statement emphasizing how its franchisees are independent owners and operators.
"Because they are responsible for the operations of their restaurants, we cannot comment on this specific litigation, but we do expect that all of our franchisees comply with all applicable laws, including wage and hour requirements," the statement said.
Sundance operates 176 Yum! Brands restaurants – mostly Taco Bells – in Michigan, Indiana, Ohio, Wisconsin, Illinois and Iowa. Peter Lyders-Peterson is the franchise company's president, according to state records. Sundance describes itself as one of the largest Yum! Brands franchisees.
In a phone interview, Bonanni said workers from Sundance-owned Taco Bells throughout Michigan have told similar stories about the restaurants skirting the law to avoid paying overtime.
"This was an intentional violation to maximize their profit margin," Bonanni said of the franchise company. "To say that it's an isolated practice from a few rogue stores is just not what we're observing."
Jennifer McManus of Fagan McManus in Royal Oak, co-counsel for the plaintiffs, said it has recently emerged that these Taco Bells had two work-shift computers: a front computer for workers to clock in and clock out, and a back computer that managers used to edit workers' timecards.
Depositions have started in the case and it is likely headed for a 2019 trial, the plaintiffs' attorneys said. The lawsuit seeks all unpaid wages, damages and payment of attorneys' fees.
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Contact JC Reindl: 313-222-6631 or firstname.lastname@example.org. Follow him on Twitter @JCReindl.