Dunkin’ lawsuit claims pay dodge: Identity fraud, illegal immigrant use alleged

Aug 9, 2007

By JON CHESTO
The Patriot Ledger

CANTON - Dunkin’ Brands Inc. is suing a group of Dunkin’ Donuts franchisees in Western Massachusetts, accusing them of using the identities of former employees to hide the extent of overtime work done by their current employees.

Dunkin’ Brands, which is based in Canton, filed the lawsuit in U.S. District Court in Boston on Monday. The defendants include a group of franchisees that collectively own and operate about 50 Dunkin’ Donuts and Baskin-Robbins shops, primarily in the Springfield area.

The franchises are divided among a number of corporate names, most with ‘‘Donuts’’ in the title, such as Agawam Donuts, Derek Donuts, Jessica Donuts, Lori Donuts, Springfield Donuts and Fletcher Donuts. While most of their shops are in Massachusetts, the group includes several shops in Florida.

Many of the franchises share the same owners, according to the suit. Representatives for the franchises couldn’t be reached for comment.

Dunkin’ Brands, the parent company for Dunkin’ Donuts and Baskin-Robbins, said it recently terminated the defendants’ franchise contracts because of their failure to comply with an ‘‘obey all laws’’ provision in their franchise agreements.

Dunkin’ Brands claims that the franchisees failed to pay many workers at overtime wage rates for working more than 40 hours a week.

The company claims the franchisees had some current employees use the names and Social Security numbers of former employees to hide the fact they were working more than 40 hours each week. The franchisees, Dunkin’ Brands claims, also falsified time records to carry overtime hours for employees into the following week to avoid having to pay overtime wages.

Dunkin’ Brands also claims that the defendants broke their franchise agreement by violating federal immigration laws by knowingly hiring illegal immigrants.

A spokeswoman for Dunkin’ Brands declined to comment on the suit.

Dunkin’ Brands recently has been cracking down on the use of illegal immigrants by its franchisees. For example, earlier this year the company sued a franchisee in Concord and one in Florida, alleging violations of immigration laws. A Connecticut businessman was sentenced in April to 10 months in prison for illegally recruiting Portuguese immigrants to work in his Dunkin’ Donuts stores after authorities were tipped off by an investigation conducted by Dunkin’ Brands.

Dunkin’ Brands decided last year to require its franchisees to participate in a federal program that helps employers verify if new hires are eligible to legally work in the United States.

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