Sonic Industries Services, Inc, franchisor of the SONIC drive-through restaurant chain, has entered into a voluntary agreement with the U.S. Department of Labor’s (DOL) Wage and Hour Division (WHD) to help its independently owned and operated franchise locations comply with the federal labor laws.
SONIC Drive-In restaurants are the nation’s largest drive-in chain, serving approximately 3 million customers daily. Nearly 94% of its 3,500 drive-in locations are locally owned and operated. SONIC has been the subject of several wage theft lawsuits that involved workers alleging that they didn’t receive overtime after working 40 hours in a week and were required to work “off the clock.”
As part of the agreement, SONIC will provide a forum and the resources needed to assist the WHD in educating its drive-in owners, managers, and employees nationwide.
Fair Labor Standards Act
The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour as well as time and one half their regular rates for every hour they work beyond 40 per week. It also requires employers to maintain accurate records of their employees’ wages, hours and other conditions of employment.
The WHD will provide compliance assistance tools designed for the franchise restaurant industry. The package will include video and online training, educational articles for use in internal company publications, and sample training materials for use in company staff meetings. The WHD will also make representatives available to provide training and compliance assistance to SONIC franchisees. In addition, the WHD and SONIC will collaborate using publicly available data to promote franchisee compliance with the Fair Labor Standards Act.
The agreement states that it is not “an admission” by SONIC that it “is a joint employer of the workers employed by its franchisees. WHD recognizes that the existence of a franchise relationship, in and of itself, does not create joint employment.”
The SONIC agreement is similar to an agreement that the WHD entered into with the Subway restaurant chain in 2016.
WHD Deputy Administrator for Program Operations, Patricia Davidson, noted that the WHD will “encourage other franchisors to follow SONIC’s example and take similar steps to benefit their franchises’ employees and owners by complying with the law.” She believes that complying with the wage and hour laws makes good business sense, rather than paying back wages, damages, and penalties for violations.