An outpouring of community support for the “DQ Sisters” — Long Island siblings and Dairy Queen franchisees who were sued by a former employee over an obscure state labor law — is offering some sweet relief following their five-year ice cream headache.
Patty DeMint and Michelle Robey are known in their Medford, New York, community for their kindness, inclusivity and generosity toward both customers and employees of their Dairy Queen restaurant — from financially supporting workers during personal struggles to bringing gifts to employees’s kids on Christmas.
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“I always wanted to give back and just lift people up,” DeMint tells Moneywise. “And then once they came into our DQ family, they were family. So if they were struggling, we struggled.”
But in June 2020, a former employee launched a class-action lawsuit against them, suing for $6 million over a Depression-era “Frequency of Pay” law that says “manual laborers” should be paid weekly, rather than biweekly.
The sisters — who’d never had their biweekly payment schedule flagged, including during an audit by the state’s Department of Labor — fought it, eventually settling out of court for $450,000. Even more than the financial blow, however, the experience nearly crushed their spirit for giving back.
“I was in that dark place where I was just ready to just put my hands up and say, ‘I can’t do this anymore,’” DeMint admits.
Then, one of their employees set up a GoFundMe page to support them, drawing donations from their community and beyond that total more than $35,000, and counting. Many of the donations are modest, in the $5 or $10 range, which deeply touched the sisters. (1)
“I know that those are either my crew people or my customers,” DeMint says, holding back tears. “It’s hard right now out there. So for them to give that to (us), it’s overwhelming … it brought me back to where I needed to be, grounded in my efforts to pay it forward.”
The financial fallout
DeMint and Robey joyfully share stories of the generosity they’ve experienced. One man told Robey that he donated because of the kindness DeMint showed to his son when they came in for ice cream following a little league baseball game. DeMint says another customer drove to the restaurant to personally deliver his donation via cheque, while a woman from Oregon sent a homemade gift to show her support.
“It’s nice to hear those things because sometimes you don’t know the impact you have,” Robey says. “So it’s been really wonderful.”
The financial support is so important because the sisters still have to pay the $450,000 settlement. Robey explained that they liquidated retirement accounts, borrowed money from friends and family and even asked their mom to collateralize her house. But they still owe $150,000 — plus their own legal fees on top of that.
One sticking point for the sisters is their belief that both their payroll company, and the state itself, should take some accountability for the lawsuit being brought forward in the first place.
“We feel like ADP certainly is liable for putting themselves out there as experts and not advising us,” Robey explains. “DQ Corporate, quite frankly, recommended us to ADP saying they were experts in DQ and payroll and would help us. The Department of Labor, not for nothing, signed off and said everything was fine. And then there was this about face.”
DeMint adds that they’ve even tried to sue, but they can’t find an attorney to take the case. As such, the sisters are hopeful they’ll find an attorney “who would take at least the ADP case on a contingency basis,” Robey says. “It just seems people share liabilities with us, without a doubt.”
Moneywise reached out to ADP and the New York State Department of Labor for comment. The Department of Labor did not respond immediately to our request, but ADP did provide this statement on the matter:
"We take matters of this nature very seriously and are looking into this employer’s issue. As a general matter, with respect to the pay frequency and relevant employee classifications, we take direction from our clients as they are best equipped to make those determinations.
"Your inquiry, however, raises a broader issue impacting employers in NY that deserves more clarity — the definition of a manual worker in today’s world under a law written in 1890. In fact, the National Payroll Reporting Consortium, a payroll trade association to which we belong, along with numerous other organizations, have asked New York lawmakers to help better define who these workers are … so employers are able to make more informed decisions on how to comply with this law."
Read more: How much cash do you plan to keep on hand after you retire? Here are 3 of the biggest reasons you’ll need a substantial stash of savings in retirement
Advice for small business owners
The DQ Sisters, meanwhile, already found success in a different legal fight, helping to change the Frequency of Pay law in New York so that, going forward, small businesses would only be on the hook for interest owed on the “late” wages rather than a massive payout like their own.
“We just wanted to start a business,” Robey says. “We never imagined in a million years we’d find ourselves in this situation or be agents for change like this.”
“I think that small businesses are what this great USA was built on,” DeMint adds. “And I feel like it’s being taken away. The American dream is very hard.”
To that end, the sisters do have advice for how small business owners can protect themselves and avoid some of the pitfalls they’ve endured.
First, Robey notes, many people start small businesses because they have a passion or skill that they hope to monetize. As such, she recommends working with trusted advisers and even finding a mentor in a larger organization whose brain you can pick about business and things like EPLI — Employment Practices Liability Insurance — which Robey wasn’t aware of but which, she says, would have at least covered the legal defense of their lawsuit.
Robey also subscribes to labor law attorney newsletters “so that I can try my best to keep up on what’s going on out there so this doesn’t happen again.”
DeMint, meanwhile, warns about the various expenses she never expected to encounter — for example, she says, spending $10,000 on shrubs for the walkway in front of your store that the local municipality requires. These expenses can add up and, if you don’t account for them, they “could put you out of business.”
DeMint also says their saving grace is that she works in the Dairy Queen herself as “free labor” — which she doesn’t mind because “I love what I do … it’s where I belong.”
And that’s the cherry on the sundae — the love for their work and their employees that keeps the DQ Sisters from melting when the heat gets turned up.
“When I was ready to give up, I looked at my people that have been there since day one and … I worry about them if I’m not here. What’s going to happen to them?” DeMint says.
“So it keeps me going,” she adds, before letting out a laugh, “and I won’t stop until my body tells me I have to.”
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