Texas Subway Employee Files Lawsuit Over Payroll Debit Cards
Austin, TX (Law Firm Newswire) August 1, 2014 - A worker at a Subway restaurant outside of Austin, Texas has filed a class action lawsuit against his employer over its practice of paying employees with prepaid Visa cards, which may be subject to fees.
Jake Branson filed the lawsuit on his own behalf and on behalf of other Subway employees after his paper checks were replaced with prepaid Visa cards. He found that using an ATM to withdraw cash from the cards could result in a $1.75 fee, that checking the balance of the card cost $1.00, and that a $0.50 fee could apply when making a store purchase.
While regulation of prepaid cards varies, experts say that in Texas, the cards can typically be issued to employees who give consent.
“Texas labor laws usually permit employers to issue prepaid cards to workers who agree to the plan,” said Gregory D. Jordan, an Austin employment attorney. “A key factor in a case like this will likely be whether the employee really had a choice.”
Branson earns $7.25 per hour working at the Subway restaurant in Leander, Texas, which is operated by Destiny Foods. He said that transaction fees cost him $7 or $8 when he first began using his prepaid card. Now Bank of America cashes out his card free of charge, which is generally required under federal law. Branson said he asked his employer to bring back paper checks and was told no.
According to experts, prepaid cards are becoming more popular for wage payment. A study by the Aite Group research firm found that 3.7 million employees were paid a total of $26.6 billion using the cards in 2011. By 2016, the firm projects that those numbers will double.
Employers can sometimes save money by using prepaid cards, foregoing the cost of printing paper checks. The institutions that issue the cards profit from transaction fees. Some employees who do not have bank accounts may prefer the prepaid cards, as they may permit them to avoid check-cashing fees. But according to Branson, he and other employees had no choice.
Law Offices of Gregory D. Jordan
5608 Parkcrest Drive, Suite 310
Austin, Texas 78731
- Oil lawsuit filed in Texas court over alleged breach of joint operating agreement
In a lawsuit filed in Texas, a small oil company alleges that its partner drillers in Guinea breached a joint operating agreement on offshore drilling. Hyperdynamics Corp. filed suit claiming that Dana Petroleum PLC and Tullow PLC used a now-settled foreign corruption investigation under the U.S. Foreign Corrupt Practices Act to delay drilling activities long [...]
- Austin company files lawsuit alleging unfair competition
An unfair competition lawsuit has been filed in U.S. District Court in Austin, Texas. Yeti Coolers, an Austin company, accuses a Missouri company, Mammoth Coolers, of selling products that infringe on Yeti’s rights. Yeti alleges unfair competition, unjust enrichment, trade dress infringement and trade dress dilution. The company seeks money damages and the recall and [...]
- Former employee alleges unpaid overtime in Texas employment lawsuit
A former employee of an environmental services company, who claims that the company did not pay him for overtime worked, has filed an employment lawsuit in federal court in Texas. The collective action lawsuit was filed in U.S. District Court for the Eastern District of Texas, Beaumont Division, by Tommy Breed, individually and for all [...]