Ronald Johnson, who once was a rising star in the New York City business community, must now fork over $2 million after refusing to pay his 447 Papa John’s employees $7.25 an hour.
On March 3, 2015, New York Supreme Court Justice Joan Kenney filed a judgment that ordered Johnson and his company to pay $2,126,166.34 in owed wages, un-reimbursed expenses, liquidated damages, and interest. But Johnson’s attorney, George Peters, says he’s not going to see his client pay the debts without first pursuing all avenues to reduce them.
“He may have done some things that were improper,” Peters tells the Voice. “But it didn’t rise to the $2 million level.”
In October, New York State attorney general Eric Schneiderman announced he was suing Johnson for underpaying 447 employees across five uptown Papa John’s locations he owns.
“Nobody who works 40 hours a week should have to live in poverty,” Schneiderman said in a statement at the time (which we wrote about). “Like every other business in New York, fast-food employers must follow the law.”
According to a press release from Schneiderman’s office, Johnson and his company New Majority Holdings violated New York Labor law by, among other things:
Rounding down workers’ hours worked to the nearest whole hour increment (and paying nothing for fractions of hours); Failing to pay legally required overtime premiums; Paying delivery workers the lower, “tipped” minimum wage, even though they were assigned to a substantial amount of untipped kitchen and other work; Failing to reimburse employees for costs of purchasing and maintaining bicycles used to make deliveries.
Peters says he and Johnson know he will have to pay something, and are now hoping to “work with the state” to get the damages reduced.
“Maybe we’ll appeal,” Peters says. “I have to research [the best options]. It’s the tail end of the case but it’s just the beginning of our fight.”
Peters says Johnson retained him just three weeks ago, as the case was winding down.
“It’s unfortunate that we were brought on so late in the game,” he says, explaining that he’s now playing catch-up on deciding his client’s next course of action. “But that’s what separates the regular lawyers from the super lawyers.”
Thomas McKinney, an attorney of twelve years who practices labor law exclusively, says that appealing court judgments like Kenney’s is a classic tactic used by employers to fight for smaller penalties in out-of-court settlements.
“If it’s appealed, there’s always room to try and negotiate something, because there’s always the risk they’ll overturn the judgment,” says the name partner at Castronovo and McKinney. Because the appeal “is going to be hell,” he says, “reaching a settlement is strongly suggested by the appellate court.”
McKinney says it’s in Johnson’s best interest to drag the process out for as long as he can, until the state agrees to settle out of court or the court rules, potentially in his favor.
“There’s not a lot of downside to appealing,” he says. And “the advantage is, they don’t have to pay 2 million dollars.”