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Taco Bell Franchisee Underpays Employees, Lawsuit Says

Sept. 25, 2018, 6:00 PM

Sundance Inc., a franchisee that operates 173 fast-food restaurants in six Midwestern states, underpays workers, according to a lawsuit filed Sept. 25 by a former Iowa Taco Bell crew member.

The company avoids paying overtime by paying for work time after the 40-hour mark in a different week, according to the complaint. Employees who regularly work more than 40 hours in a week are paid no more than 80 hours for a two-week pay period, no matter how many hours they actually worked, the complaint says.

Robyn Morgan filed the complaint as a collective action, which is a procedure for litigating a multi-plaintiff pay lawsuit under federal law that’s similar to a class action.

Sundance operates other Yum! Brands Inc. restaurants, including KFC, Pizza Hut, and A&W, according to its website. The company didn’t immediately respond to a request for comment.

Sundance is engaged in separate litigation filed by workers who say it improperly classified them as managerial employees exempt from overtime, even though they performed the duties of regular crew members.

The case is Morgan v. Sundance, Inc., S.D. Iowa, No. 4:18-cv-00316, complaint filed 9/25/18.

To contact the reporter on this story: Jon Steingart in Washington at jsteingart@bloomberglaw.com

To contact the editor responsible for this story: Terence Hyland at thyland@bloomberglaw.com