Jan-Pro Franchising Settlement - Worker Misclassification and Wage Theft

Attorney General Schwalb Secures Money Back for Dozens of DC Janitors Exploited in Wage Theft Scheme

April 17, 2026

Janitorial Franchise Companies Will Pay $279,000 in Restitution and Penalties and Reform Their Business Practices to Settle OAG Lawsuit Alleging Illegal Worker Misclassification

Attorney General Brian L. Schwalb today announced that Jan-Pro Franchising International, Inc. (JPI) and Nabicorp Enterprises Inc. (Jan-Pro of Washington) will pay a total of $279,000 to janitorial workers and the District to resolve a workers’ rights lawsuit filed by the Office of the Attorney General (OAG).

OAG sued both JPI and Jan-Pro of Washington alleging that they engaged in a worker misclassification scheme that promised janitors independence and entrepreneurial success, but instead treated them as employees without providing them the benefits that employees are entitled to under DC law. Under the terms of the settlement agreement, JPI and Jan-Pro of Washington will pay restitution to workers and penalties to the District. They also must make significant changes to their operations in DC, including giving workers more control over their own work and freeing them from onerous noncompete agreements that prevented them from pursuing janitorial opportunities outside of the Jan-Pro system.

“Jan-Pro of Washington promised workers the opportunity to start their own businesses, when in reality, it treated them as strictly-controlled employees without any of the benefits or protections of employment,” said Attorney General Schwalb. “This settlement requires the company to change the way it does business in DC and empowers workers to control their work. It also sends a strong message that companies cannot exploit workers to boost profits and illegally undercut their competitors in any form, including through deceptive franchising schemes.”

JPI and Jan-Pro of Washington operate as a multilevel franchising system. Jan-Pro of Washington is a regional franchise of JPI, which sells regional janitorial franchises across the country. Jan-Pro of Washington recruits janitors to buy franchises within its region, advertising the arrangement as an opportunity to build a business under the Jan-Pro brand with a guaranteed stream of cleaning contracts. Many of the janitors who became franchisees, however, simply did their own work, often with no other employees. JPI and Jan-Pro of Washington also controlled many of the terms and conditions of that work. Nevertheless, despite treating the janitors as employees, JPI and Jan-Pro of Washington systematically classified them as independent contractors by requiring them to become franchisees.

OAG sued JPI and Jan-Pro of Washington in 2022, alleging that these classifications were improper and that District law required the janitors to be classified as employees because JPI and Jan-Pro of Washington effectively controlled their work. Additionally, OAG alleged that Jan-Pro of Washington made illegal deductions from janitors’ wages, including by imposing fees that effectively made them pay for their own workers’ compensation insurance, which is illegal under District law.

Under the terms of the settlement agreement, JPI and Jan-Pro of Washington will:

• Pay $279,000, including:

  • $54,800 in restitution to dozens of janitors who had DC cleaning contracts from 2019 through the present.
  • $224,200 in penalties to the District and for settlement administration costs.

• Change their operations so that janitors, as sub-franchisees, are true independent contractors with much more control over their own work. These changes will include:

  • Allowing janitors to participate in contract negotiations with their customers, including negotiating their hours of work, start times, end times, and pricing.
  • Prohibiting Jan-Pro of Washington from charging fees to janitors if they reject a cleaning contract in most cases.
  • Allowing janitors to choose where to purchase or lease their cleaning equipment and supplies.
  • Limiting when Jan-Pro of Washington can inspect cleaning locations. Previously, Jan-Pro of Washington exercised control and supervision over janitors’ work through a system of frequent inspections and fines.

• Stop using restrictive noncompete agreements that prevent janitors from performing any cleaning other than the work JPI and Jan-Pro of Washington assign them. These provisions previously prevented janitors from pursuing cleaning work outside of the Jan-Pro system.
  The settlement agreement is available here.

This matter was handled by Senior Trial Counsel Ryan Wilson; Assistant Attorneys General Norman Anderson, Beth Feldstein, Cara Reichard, Tascha Shahriari-Parsa, and Anabel Butler; Investigator Kenithia Alston; Paralegal Diego Pereira; Assistant Chief Dennis Corkery; and Section Chief Graham Lake.

What is Worker Misclassification?
Misclassification is a form of payroll fraud that reduces labor costs for companies at the expense of workers. When companies improperly classify their employees as independent contractors, the workers are deprived of rights and benefits they are legally entitled to as employees, including minimum wage, overtime compensation, and paid sick leave. By engaging in illegal misclassification, companies also shift their own tax burden on to the workers they improperly classify as contractors and deprive the District of tax revenue, unemployment insurance premiums, and workers’ compensation contributions. Additionally, companies that violate the law and misclassify workers undermine fair competition and undercut law-abiding competitors.

OAG’s Efforts to Protect Workers
OAG’s Workers’ Rights and Antifraud Section is dedicated to fighting wage theft, protecting District workers, and ensuring that businesses in the District compete on a level playing field. Since gaining independent wage theft enforcement authority in 2015, OAG has secured over $39 million – including more than $23 million since AG Schwalb became Attorney General in January 2023 -- by investigating and bringing enforcement actions against employers who violate District law. OAG’s wage theft enforcement efforts have focused on industries with high populations of vulnerable workers, such as construction, restaurants and hospitality, healthcare, and the gig economy. Learn more about OAG’s efforts to uphold workers’ rights over the last year in OAG’s 2025 Labor Day Report.

How to Report Wage and Hour Violations
Workers who believe that their rights have been violated, or that they have experienced wage theft or other wage and hour violations, can contact OAG by calling (202) 724-7730 or by emailing workers@dc.gov or trabajadores@dc.gov.

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