Subway CEO: 'Our owners have not done the right thing'
May 9th, 2014
12:45 PM ET
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Subway CEO Fred DeLuca said this week that "there's no excuse" for workers being paid improperly.

His remarks come after CNNMoney published an investigative report last week detailing how Subway is the fast food chain with the most wage and hour violations.

From 2000 to 2013, Subway stores racked up more than 17,000 Fair Labor Standards Act violations, including failure to pay its employees the proper overtime rate, according to our analysis of data collected by the Department of Labor's Wage and Hour Division.

That was far greater than the next highest fast food offenders: McDonald's and Dunkin' Donuts.
Subway declined numerous interview requests from CNNMoney, but DeLuca spoke about the story to CNBC.

"The vast majority of our owners are doing the right thing, but some are not," DeLuca told CNBC. "I would say this: We, as a company, realize that some of our owners have not done the right thing."

Read - Subway CEO: 'No excuse' for wage violations

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Filed under: Fast Food • Food Politics • Human Rights • Labor Issues • Restaurants • Service • Subway

soundoff (25 Responses)
  1. Gabe Horn

    Well... we can now say goodbye to the five dollar foot long.

    June 4, 2014 at 5:05 pm |
  2. whitelotus88

    First Subway is found using rubber (the same stuff in Yoga Mats) in their bread, now this. No wonder I don't eat there anymore.

    June 3, 2014 at 10:40 pm |
    • Franco

      It wasn't rubber.

      June 4, 2014 at 8:20 pm |
  3. SteveS

    That's one of the joys of being on the bottom of the totem pole in corporate America.
    If your boss isn't a total jerk wad and a thief too boot....consider yourself VERY lucky!

    June 3, 2014 at 10:26 pm |
  4. ebraiter

    Unlike McDonald's and the like, subway works don't run around as if they don't have a head. "What do you want on your sandwich?" Nice and casual. Between this, the yoga mat ingredients and the 12 inch roll that wasn't 12 inches, Subway needs a good PR department.

    June 2, 2014 at 11:55 am |
  5. Joe Milton

    It's a combination of two things....unethical business practice at the corporate level (i.e. competition areas non-compete) and Indian/Middle Eastern ownership.

    Of course media won't state either but there you go.

    May 30, 2014 at 3:27 pm |
    • Noname

      Exactly right. Corporate plunks down Subway franchises in some cases within eyesight of each other and somehow expects them both to make money. They don't care if it puts tremendous pressure on the franchisees. What they want is a bigger number of stores on the territory charts. HOW they get it is not their problem. Afterall, if a franchisee can't make money and defaults on his store loans, Corp doesn't care. THEY still get paid, And they get the store back to lease to somebody else.

      And many, many, of the franchisees come from cultures where paying the wage under the table or not at all is how you do it. You bring in relatives and have them work for free or for almost nothing. American workers won't stand for this and either won't work there or they report it.

      If you are a franchise store operator trying to make an honest living, you have to compete against other operators who are willing to cheat and cut corners. Corp doesn't care what it cost you to run the shop. They want their cut regardless. So it's all on you to keep costs down.

      This sort of thing happens at many other franchise operations.

      It's also certainly not the only thing Subway is doing to cheat customers. One that comes to mind is reducing the drink cups from 32 ounces to 30 or 28. The drink syrup was already a high profit area and now it's even more profitable.

      May 30, 2014 at 10:26 pm |
      • John

        It's not really cheating unless they still advertise them at 32 oz.....smdh

        June 6, 2014 at 5:57 pm |
    • Brad SF

      I think your argument would be stronger if you just said unethical business practices. Subway as an organization seems to be fairly American based. I think it's wrong for you to imply a portion of the Subway blame goes to Indians and Middle Easterns without any data or evidence.

      June 4, 2014 at 3:39 pm |
  6. bobbaft

    The way they cheap you out on the condiments and meat, they should have extra cash around to pay more.

    May 23, 2014 at 1:15 pm |
  7. Gino

    Nothing like a dose of good old American capitalism to give one a clear

    May 22, 2014 at 1:42 pm |
    • Gino

      Perspective of how the system really operates.

      May 22, 2014 at 1:43 pm |
  8. susan

    My son almost got fired for wage issues. The business forces people to close within fifteen minutes after the front doors are locked. It takes 30 minutes to close, so employees have to begin closing 15 minutes before the doors are locked. Two women walked in and ordered five sandwiches, which my son couldn't make within the last few minutes, so he told them so. They called the boss the next day and my son was told that he'd be fired if he did it again.

    May 22, 2014 at 4:53 am |
    • Bigtexun

      This is an extremely common practice... Demanding the store post-closing cleanup be done in such a short time that it must begin before closing. That is normal for every place I ever worked. So employees are forced to work off the clock to avoid getting fired for overtime. Or get fired for closing too early when someone comes in late and demands service.

      There is no middle ground on that, damned if you do and damned if you don't.

      May 22, 2014 at 9:55 am |
    • DisgruntledAmerican

      I have worked for two Subway owners. One was a friend of the family and VERY fair to his employees. It wasn't uncommon to be making far above minimum wage in his stores if you worked well. However, the other owner I worked for wasn't so fair....

      1. Multiple stores, some an hour away. If they had a call off, you got transfered and had to pay the extra gas and time. If you got the call 30 minutes before your shift started and had to drive an hour to get there, you would get in trouble and docked the amount you missed.

      2. I was an assistant manager. Assistant managers and managers were ALWAYS responsible for the money, whether it was their drawer or not. If a non-manager cashier gave wrong change, it came out of the assistant manager's paycheck. If a non-manager cashier stole money, it came out of the assistant manager's paycheck. If a guy came in with a gun and demanded the drawer, you had a choice – get shot or give him the drawer, which, you guessed it, came out of your paycheck (that happened a couple times).

      3. Coworker of mine got clubbed over the head by a robber, and since the coworker was passing through the door into the backroom the thief was able to get into the backroom. My coworker got fired for letting the thief into the back room. Come on, my coworker was unconscious.

      4. The manager was finding ways to fire the men and replace them with women. It had happened multiple times and 4 men had been fired and replaced. I was the last male, so I resigned before getting fired. They replaced me with a woman. So much for equal opportunity.

      5. They paid based upon a base pay with a bonus. The base pay was minimum wage. If they didn't like something you did, no matter how trivial, you'd lose your bonus pay and be sent back to minimum wage for the pay period. Happened multiple times to me when the manager went in "white glove" mode looking for things to meet "the bottom line".

      It all comes down to management. I worked for two Subways. One was a great experience. The other made me want to put my head in the toaster oven.

      June 3, 2014 at 2:58 pm |
    • Brad SF

      I think most companies would not tolerate your son to be unprofessional and turn away business. He had a choice. He could have stayed late and clocked in for the extra time or he could have left the place less cleaned up because of the late business. If he was then let go for those practices, his story would be more interesting. But for him to turn away business before the closing time, he will have more problems like this with other jobs.

      June 4, 2014 at 3:43 pm |
  9. eltbrown

    I'm getting l little teary eye'ed reading this. I've been working for Subway for almost 5 years now. I was laid off in 2008 and haven't been back on my feet yet. This particular Subway I work at has taken alot of me and other employees who've come through there specifically the overtime pay. Every time I ask the owners for over time they either ignore me or bring up an argument about it. They have only one person closing at night which makes it hard to get out on time and do the work they require of us. I dont know what to do for they have some incompetent people who will do anything for them even if its meant to lie and cheat.

    May 15, 2014 at 12:46 pm |
    • Jared

      Yeah, I've been there. Best closing time was 5 minutes. Worst was about 3 hours after doing 30-60 subs an hour all night by myself, and another 28 after closing. At the time, we had to pre-setup the meats so that the customer flow would be faster. I ran out half way through the night, so I got to make about 100 meat setups after closing too. Manager was furious when he drove by the store and saw me still cleaning a midnight. That is until I showed him the numbers and told him his lazy brother didn't show up. The owner got on my case later, so I asked him if he appreciated the extra hour of good business (20/hr was considered a good hour) and not having to pay a second person. Then he gave me a raise.

      I paid my way through college doing it. Good times, but I don't miss it.

      May 29, 2014 at 10:31 am |
    • Scott

      Shame on you for not getting an attorney. An idiot boss only gets away with robbing employees if you do nothing about it.

      May 29, 2014 at 6:03 pm |
      • GatorDude

        I know. Most fast food workers have an attorney on retainer right? How long do you have to work at $9.00 an hour to pay a lawyer $350 an hour?

        June 2, 2014 at 11:05 am |
        • Jim V.

          That, and a lot of these employees are younger with relatively little experience and no viable means to "take a stand."

          June 3, 2014 at 9:37 am |
        • Danderson

          Virtually all wage theft cases are brought under the Fair Labor Standards Act, a federal law which includes a fee-shifting provision that allows attorneys to recover a reasonable fee from the defendant in a successful action. The FLSA also offers whistleblower and retaliation protection; if you bring an FLSA claim or assist in one (through deposition, offering evidence, joining a class action), you are legally protected from adverse employment actions stemming from that FLSA action. I'm a Virginian, and the FLSA is waaaay better than any employment protections we have in this state.

          So what I'm getting at is this: The Subway worker who's having his wages stolen (no overtime, or off-the-clock hours) doesn't need to foot the bill for an attorney. If the amount of wages owed is large enough (and think in aggregate–your co-workers are also probably getting shafted), there's usually enough money at stake for a plaintiff's lawyer to pursue wage theft cases on a contingency basis.

          Scott's right about this one. Widespread corporate practices shorting folks on labor won't change until it becomes too expensive to continue doing business that way. The only way to make it more expensive is to sue and sue some more, holding business owners accountable for every violation. Anyone that feels they've been denied overtime pay or wages for hours worked should pick up the phone and call a employment law attorney; they're eager to take the call.

          June 4, 2014 at 5:40 pm |
  10. AleeD® Aren't these idiots paying attention to their own paychecks? If you're complaining about living paycheck to paycheck and every penny counts, why wouldn't you scrutinize every word of your pay stub or statement to make sure you're getting every cent you have coming to you?

    May 12, 2014 at 7:44 am |
  11. Carn E. Vore

    I thought he would be talking about them caving to pressure in the UK from Islamists.

    May 10, 2014 at 9:56 am |
    • Thinking things through

      Carn, what did they do there, stop serving ham?

      May 11, 2014 at 8:46 am |
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