Domino’s $900K Settlement Shows High Cost of Pay Transparency Penalties

A $900,000 settlement in Washington highlights the financial impact of pay transparency penalties when employers fail to include required pay information in job postings.

In this case, several Domino’s Pizza franchisees were accused of violating Washington’s pay transparency law by omitting wage ranges from listings, a lapse that triggered a class action suit and significant pay transparency penalties.

For Finance leaders, this early case shows how compliance errors can quickly evolve into financial liabilities. Beyond direct payments, pay transparency penalties often trigger secondary costs such as legal fees, administrative overhead, and insurance claims, each of which can distort budget forecasts.

Wage Transparency Lawsuit Is Filed

In the case, three Domino’s Pizza defendants agreed to pay $900,000 to settle a class action suit that accused them of violating the Washington Pay and Equal Opportunities Act, which took effect at the start of 2023. Under that statute, pay transparency penalties can apply to each noncompliant job posting, increasing financial risk with every infraction.

The suit said the defendants violated the law when they failed to include wage scales or salary ranges in job postings for Washington-based positions, as the state law requires.

From a financial perspective, each noncompliant posting represents a potential accrual event. For accounting and risk teams, tracking exposure to pay transparency penalties can help identify whether to book reserves or adjust future compliance budgets.

The lawsuit added that pay range disclosures “correct information asymmetry” and help job candidates achieve equal pay. It also cited research that, according to the suit, revealed pay disparities with respect to women and other protected classes as well. It pointed to a study that found women are paid 78  cents for every dollar paid to men.

Applicant Says Job Posting Lacked Required Info

Peter Corwin, who lives and Washington and applied for a job with a Washington Domino’s, was the original named plaintiff in the suit. He says that when he applied in February of this year, the job posting did not disclose the wage scale or salary range that was being offered.

As the named plaintiff in the class action suit, he sued on behalf of himself and all others who were similarly situated. The suit says that since the state law took effect, more than 40 class members applied for jobs via postings that lacked the salary-related information that the law requires. The settlement agreement that resolves the suit estimates that the total number of class members is 6,538.

For employers, each missing disclosure can compound pay transparency penalties, especially when class members number in the thousands.

The suit says that when it was filed in February of this year, the defendants were continuing to withhold required pay-related information from job postings.

As relief, it asked for statutory damages of $5,000 per class member. It also sought the costs of suit and attorneys’ fees. Finally, it requested injunctive relief that would require the defendants to post the required salary-related information.

This case illustrates how quickly pay transparency penalties can accumulate through statutory damages and legal fees.

Agreement Resolves Wage Transparency Lawsuit

To end the case, the parties entered into a settlement agreement that the parties signed in July and August of this year.

The agreement, in which the defendants explicitly deny wrongdoing, calls for a payment by the defendants’ insurer of $900,000 to a settlement fund.

Of that amount, approximately one-third ($299,997) will go toward attorneys’ fees. Another $5,000 is allocated for costs and expenses, while Corwin and four later-added named plaintiffs will each get $10,000. In addition, up to $20,000 is allocated for costs incurred by the settlement administrator.

Notably, only a small fraction of the pay transparency penalties reached employees directly; the majority funded attorney fees and administration. For Finance departments, that cost ratio highlights the inefficiency of reactive compliance spending versus preventive investment in automated disclosure processes.

Those allocations leave about $95 for each of the estimated 6,538 class members.

In late August, the court issued an order that preliminarily approved the settlement. In the order, it preliminarily certified the settlement class and approved the settlement fund amount.

Since the settlement was paid through insurance, Finance leaders should also assess how pay transparency penalties may impact future premiums or policy coverage. As these cases multiply, underwriters may reprice compliance-related risk.

Action Steps for Finance Leaders

Finance leaders should track pay transparency penalties as part of broader compliance risk management.

Building cost projections for potential settlements, attorney fees, and administrative expenses can help prevent budget shocks.

Partner with HR and Legal to confirm that pay disclosure systems meet state requirements, and include compliance audits in annual financial reviews.

In the long term, Finance teams can integrate pay transparency penalties into enterprise risk dashboards, using these metrics to guide investment in compliance systems. Treating disclosure enforcement as a recurring cost center allows for better forecasting and coordination with HR and Legal on shared accountability.

Understanding Pay Transparency Compliance

Generally speaking, pay transparency penalties arise when employers fail to meet disclosure obligations under state or local laws requiring compensation transparency.

While the subject is not federally regulated, many states and localities have their own versions of pay transparency laws. These laws have varying requirements.

Corwin v. Jeff, Pat, Chris, LLC, No. 25-2-05696-1 SEA (Wash. Super. Ct.).