Coverall North America Hit with Class Action in Georgia Over Franchising ‘Scheme’

New to ClassAction.org? Read our Newswire Disclaimer

A proposed class and collective action filed by Janitorial Tech, LLC and one individual alleges Coverall North America, Inc. has systematically violated federal labor laws, the Georgia Industrial Loan Act, the Georgia Payday Lending Act, and federal RICO laws.

The 59-page complaint alleges Coverall North America purports to sell cleaning “franchises” to janitors, targeting “low-income, undereducated individuals” throughout Georgia (for a substantial cost) on promises of “guaranteed business and financial freedom.” What Coverall’s ostensible franchisees don’t know, the lawsuit claims, is that the company does not have enough customers to satisfy these business promises. After janitors pay Coverall a hefty upfront fee for the rights to provide cleaning services, the defendant allegedly washes its hands of the amount of business promised, instead subjecting proposed class members to “a scheme of misrepresentations, revolving customer accounts, and numerous ‘additional business’ fees,” the lawsuit alleges.

The case further claims the defendant’s purported “franchisees,” through its alleged scheme, are misclassified as independent contractors, despite the company having “complete behavioral and economic control” as a means for Coverall to avoid its Fair Labor Standards Act (FLSA) obligations.

But we’re not finished. 

The plaintiffs claim Coverall has repeatedly violated both the Georgia Industrial Loan Act and Georgia Payday Lending Act by issuing loans of $3,000 or less to its janitors at illegal rates in an alleged scheme the case says results in some janitors ultimately being paid nothing for their labor.

“Coverall requires its janitors to pay certain fees that the janitors cannot afford. So that the janitors can pay the required fees, however, Coverall loans the janitors money in amounts of $3,000 or less at illegal rates and then deducts the principal and illegal interest directly from the janitors’ pay before paying the janitors. In some instances, after Coverall deducts its fees (including loan payments), the janitors are paid nothing for the cleaning work they performed.”