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 Supreme Court rules in tortious intereference case that “reasonable certainty” requirement for lost profits applies to claims for “lost market value”
In a recent business litigation case, the Texas Supreme Court affirmed that lost profits may only be recovered when the amount can be proven with reasonable certainty, even when the damages sought are for the “market value” of an investment, as determined by lost profits. In Phillips v. Carlton Energy Group, LLC, Carlton sued entrepreneur [...]
- Nineteen-year employee of Texas firm files lawsuit over alleged FMLA violation
A Texas worker filed a lawsuit against his employer alleging violations of employment law dating to 2014. Bradford Thompson brought a complaint in the U.S. District Court for the Southern District of Texas, Houston Division, against Total Petrochemicals and Refining USA Inc. The lawsuit, filed on May 6, claimed violation of the Family and Medical [...]
- In federal case, insurance company sues Texas hospital for tortious interference
In late February, Aetna Life Insurance Company filed a lawsuit against North Cypress Medical Center, claiming tortious interference. Aetna claims that North Cypress designed an out-of-network strategy that charged unnecessarily high fees to Aetna, and that it improperly offered ownership interests in the hospital in exchange for patient referrals. The lawsuit argues that the action [...]