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
- Texas woman sues nursing home for race discrimination in employment
A Texas woman has filed a lawsuit against her former employer, claiming race discrimination. Shireika Whitmore filed suit against HSMTX/LibertyLLC, which does business as Liberty Healthcare Center, in the Beaumont Division of the Eastern District of Texas, citing race discrimination. According to the complaint, Whitmore began working as a respiratory therapist at Liberty Healthcare’s nursing [...]
- Citgo sues fuel reseller for breach of contract
Citgo Petroleum has filed a lawsuit against a fuel reseller for breach of contract, claiming that the reseller sold non-brand motor fuel under Citgo’s name and failed to pay for fuel purchases. Citgo Petroleum Corporation filed the lawsuit against Daibes Oil and Fred A. Daibes in the Southern District of Texas, Houston Division, on October [...]
- Jewelry company sues Sam’s Club for tortious interference
A jewelry maker has filed a lawsuit against Sam’s Club, claiming that the retail warehouse club is selling its jewelry without permission. David Yurman Enterprises filed the lawsuit against Sam’s Club on September 4 in the Southern District of Texas, Houston Division. According to the complaint, Yurman sells its jewelry at boutiques located across the [...]