U.S. Labor Department sues Oklahoma cleaning company
The U.S. Labor Department claims an Oklahoma janitorial company violated federal labor laws when it sold cleaning franchises to people who were in fact employees.
The Labor Department sued Jani-King of Oklahoma Inc. on Thursday for allegedly violating the Fair Labor Standards Act. The lawsuit was filed in U.S. District Court for the Western District of Oklahoma in Oklahoma City.
The complaint alleges that Jani-King classified workers as franchisees and required them to pay fees, royalties and other payments to work jobs such as cleaning carpets, emptying trash cans and washing windows in the Oklahoma City area.
Jani-King Oklahoma is affiliated with Addison, Texas-based Jani-King International Inc. The company claims to be the world's largest commercial cleaning franchise company with more than 120 support offices in 14 countries.
Both the Oklahoma City office and Texas headquarters did not respond to requests for comment on Thursday.
In its lawsuit, the Labor Department claims Jani-King has attempted to dodge federal labor laws by structuring its business as a franchise model.
“Rather than properly classifying its cleaners as employees, defendant deems these workers independent franchise owners, and therefore outside the scope of federal wage and hour protections,” the Labor Department claims in the court filing.
An investigation by the agency's Wage and Hour Division found that Jani-King of Oklahoma sold franchises with a range of down payment and financing options.
“What we are doing in this case is challenging the business model itself, which undermines compliance with our basic labor standards. Jani-King of Oklahoma dictated which jobs a person took and directed almost every aspect of the employment relationship — which makes them an employer, not a franchiser,” Betty Campbell, regional administrator for the Wage and Hour Division in the Southwest, said in a statement.
“Despite its claims, this company had an employee- employer relationship with its so-called franchisees. They were not in business for themselves — they were paying for a job, entirely dependent on Jani-King — a hallmark of an employment relationship.
"There are many legitimate forms of franchising, but this is not one of them.”
Contrary to typical franchise agreements, Jani-King controlled all aspects of the cleaning contracts held by the franchisee, included setting the cleaning rates, client relations, billing and payroll, the agency claims.
Jani-King also controlled the assignment of cleaning contracts among its franchisees, collected payment from clients, kept what it considered to be its share and then distributed what was left to the franchisee, the Labor Department said.
The Labor Department investigation found that Jani-King franchisees should be considered employees under federal law, and therefore eligible for minimum wage and overtime pay.
In its lawsuit, the federal agency is asking a federal judge to order Jani-King of Oklahoma to comply with federal minimum-wage, overtime, and record-keeping laws moving forward.
Jani-King Oklahoma is affiliated with Addison, Texas-
based Jani-King International Inc. The company claims to be the world's largest commercial cleaning franchise company with more than 120 support offices in 14 countries.