D.C. Attorney General Brian Schwalb has secured a $279,000 settlement with Jan-Pro Franchising International Inc. and its regional operator, Nabicorp Enterprises Inc., resolving a lawsuit that alleged janitorial workers were misclassified and denied workplace protections required under District law.
Schwalb’s office filed the case in 2022, arguing that Jan-Pro’s multilevel franchising system required janitors to buy into “franchises” while controlling how they performed their work. Investigators said many of those workers operated alone, carrying out cleaning jobs themselves while being labeled independent contractors instead of employees, a designation that left them without minimum wage protections, overtime, and paid sick leave.
“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,” Schwalb said. “This settlement requires the company to change the way it does business in D.C. 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.”
Under the agreement, the companies will pay $54,800 in restitution to dozens of janitors who held cleaning contracts in the District from July 2019 through the present, along with more than $224,000 in penalties and administrative costs paid to the District. The settlement details how those funds will be distributed to eligible workers based on participation and length of service.
The lawsuit alleged that Jan-Pro of Washington imposed fees that forced workers to cover costs such as workers’ compensation insurance and made deductions from their earnings that violated District law. Officials also said the company maintained control over assignments, inspections, and customer relationships while continuing to classify workers as independent contractors.
As part of the settlement, the companies must change how they operate in the District. Janitors will now be allowed to negotiate key terms of their work directly with customers, including hours, start and end times, and pricing. The agreement also limits when the company can inspect job sites, prevents most fees when workers decline contracts, and allows workers to choose where they purchase equipment and supplies.
The agreement also eliminates restrictions that kept workers from pursuing jobs outside the Jan-Pro system. Noncompete provisions that previously barred janitors from taking on independent cleaning work have been removed, allowing them to seek additional income and build their own client base.
“Stop messing with workers otherwise [Schwalb’s] gonna come for you,” Advisory Neighborhood Commission 2a Chairperson Trupti Patel wrote on X, formerly known as Twitter.
Court filings show the defendants denied wrongdoing and maintained that franchise owners operated independent businesses but agreed to resolve the case to avoid continued litigation.
Schwalb’s office noted that the case adds to enforcement efforts by the Attorney General’s Workers’ Rights and Antifraud Section, which targets wage theft and misclassification across industries where workers often face exploitation. A Labor Day report from the office shows enforcement actions secured more than $5.8 million for workers and the District in the past year, with misclassification identified as a recurring issue.
Worker misclassification allows companies to shift costs onto workers, avoid payroll taxes, and sidestep obligations such as unemployment insurance and workers’ compensation contributions, while also putting law-abiding businesses at a disadvantage.
“This settlement requires the company to change the way it does business in D.C. and empowers workers to control their work,” Schwalb said.
