Week Adjourned: 3.27.15 – Dominos Pizza, Wen Haircare, AIG

DominosTop Class Action Lawsuits 

Heads up you pizza delivery folk!! Another proposed wage and hour class action lawsuit has been filed against 70 Domino’s Franchises stores, this time in California and Arizona, by a delivery driver who alleges Domino’s fails to reasonably reimburse drivers for the costs of using personal vehicles for work, in violation of the federal Fair Labor Standards Act (FLSA) and California labor laws.

Field by driver Derek Gibbins, the Dominos delivery lawsuit alleges franchise operator Hishmeh Enterprises Inc. uses a flawed method to determine reimburse rates. Specifically, it typically pays $1 per trip whch that does not accurately reflect costs incurred by drivers.

The complaint further claims that Hishmeh’s “systematic failure” to provide adequate reimbursement constitutes a “kickback” such that hourly wages paid to its drivers are not free and clear, resulting in net wages that fall beneath federal and state minimum-wage requirements in violation of the FLSA and state labor codes.

“The net effect of defendant’s flawed reimbursement policy is that it willfully fails to pay the federal and state minimum wage to its delivery drivers,” according to the complaint filed in California federal court. “Defendant thereby enjoys ill-gained profits at the expense of its employees.” Otherwise known as screwing your employees—allegedly.

The complaint alleges all Hishmeh drivers have similar experiences because they operate under the same reimbursement policy. The suit seeks to include an estimate of several hundred current and former Hishmeh delivery drivers in California over the past four years. 

Wen will my hair stop falling out? Wen you stop using the product, although this has yet to be established. Wen Hair Products and marketing company Guthy-Renker got hit with a defective products class action lawsuit this week over allegations the line of products cause hair loss. Oh. Not so good.

The Wen haircare lawsuit, filed by women living in Florida, Hawaii, Indiana, Minnesota, New Jersey and North Carolina, the plaintiffs all allege they have suffered severe hair loss after using ‘Wen Hair Products’.

The Wen line of products is designed, manufactured and sold by Chaz Dean, a Hollywood hair stylist, and Guthy-Renker. The defendants claim that the Wen hair products condition the hair, and limit or repair damage caused by regular hair treatments and daily styling. However, not advertised is the alleged severe and possibly permanent damage to hair, including hair loss to the point of visible bald spots and severe breakage, according to the plaintiffs.

According to the lawyer representing the plaintiffs, many of the women who have suffered damage called the companies for help, only to be told that their complaints were unusual. However, the companies had received prior, similar calls, which they did not disclose. You think? 

Top Settlements 

And the fallout from the 2008 mortgage-backed securities financial crisis continues… this week with final approval of a $970.5 million settlement granted by a judge for the US District Court for the Southern District of New York. Yes folks, this effectively ends the securities litigation brought by shareholders of the insurance giant American International Group (AIG). Remember them?

The securities lawsuit alleged that AIG misled investors about the subprime mortgage exposure that led to a liquidity crisis and over $180 billion in federal bailouts, to put is very simply. The investors alleged AIG failed to disclose risks it took on through its portfolio of credit default swaps and a securities lending program, leading them to buy stocks they otherwise would not have bought.

This settlement is among the largest class-action settlements to result from litigation of mortgage-backed securities and the 2008 financial crisis. The judge noted that no potential class member objected to the terms of the deal, leading her to determine it was “fair, reasonable and adequate.”

The settlement affects shareholders who bought AIG securities from March 16, 2006, to September 16, 2008. 

Hokee Dokee—That’s a wrap folks…Time to adjourn for the week.  See you at the bar!