Feds raided 14 stores on Long Island and in Virginia and arrested nine managers for taking in more than $180 million under the system. Employees worked up to 100 hours per week, were forced to live in houses owned by the franchisees, and weren’t paid for all their work time. Some employees had been working under those conditions for more than a decade.
As many as 40 other franchises in states including Illiniois, Florida, Maryland, Michigan, New Jersey, and Pennsylvania are under investigation. Prosecutors are calling it a “modern-day plantation system.”
Authorities say these practices flew under the radar because 7-Eleven’s corporate overseers simply didn’t have a system in place to prevent it. Two employees in different stores were working under the same Social Security number, for instance.
7-Eleven released a statement from Director of Corporate Communications Margaret Chabris, in which the company pledged to cooperate with the federal investigation and said it “will take aggressive actions to audit the employment status of all its franchisees’ employees.”