Colorado Papa John’s Restaurants Failed to Fully Reimburse Delivery Drivers for Expenses, Lawsuit Says

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The operators of several Papa John’s pizza restaurants in Colorado have failed to properly reimburse delivery drivers for job-related expenses and provide them with required breaks, according to a proposed class and collective action.

The 41-page case alleges that although the defendants—Apex Pizza Holdings, HPG Pizza I, HPG Pizza II, DCT Enterprises of Colorado and two individuals—require drivers to use their own vehicles to deliver food and other items to the restaurants’ customers, they have failed to properly estimate and reimburse the workers for the expenses associated with doing so.

Moreover, the defendants have failed to ensure that drivers are provided with a duty-free 30-minute meal break for each shift lasting longer than five hours and a 10-minute rest break for every four hours of work in accordance with Colorado labor laws, the lawsuit alleges.

The plaintiff says he has worked at the defendants’ Fountain, Colorado Papa John’s restaurant since January 2021 and started off as a delivery driver before being promoted to general manager that September.

Per the suit, the plaintiff and other delivery drivers were required to pay out of pocket for certain expenses related to operating their own vehicles to make deliveries, including the costs of automobile depreciation, gasoline, maintenance and parts, insurance, financing charges, licensing and registration, cell phone usage, GPS charges and other required equipment.

The case says the defendants reimbursed delivery drivers for these expenses based on a flat, per-delivery rate until March 2021, when they began reimbursing drivers based on cents per mile.

The lawsuit claims, however, that the defendants’ reimbursement payments have “no connection” to drivers’ actual expenses and are not a reasonable approximation of such.

Per the suit, the defendants’ Papa John’s stores have reimbursed drivers at a rate that falls well below the Internal Revenue Service’s standard mileage rates, which represent a reasonable approximation of the costs of owning and operating a motor vehicle.

The case says that although the IRS standard mileage rate in 2021 was $0.56 per mile, the plaintiff was reimbursed $1.00 per delivery until March 2021 and thereafter received between $0.24 and $0.26 per mile. According to the complaint, the defendants’ policy caused the plaintiff to be under-reimbursed by roughly $0.32 per mile or, based on an average of 7.5 miles per delivery and 2.5 deliveries per hour, about $2.40 per hour.

The case alleges that because delivery drivers were paid at or close to the state’s minimum wage, the costs of unreimbursed expenses caused workers’ wages to fall below the minimum rate.

Moreover, the lawsuit says the defendants applied an unlawful tip credit to workers’ wages in that the unreimbursed expenses caused the restaurant operators to apply a greater tip credit to drivers’ wages than they had initially disclosed. The suit further claims that workers were not properly informed of the requirements for taking a tip credit.

The lawsuit looks to cover the following collective/classes:

• Current and former delivery drivers employed at the defendants’ Papa John’s stores anytime within the past three years and until the date of final judgment; and
• Current and former delivery drivers employed at the defendants’ Papa John’s stores in Colorado anytime within the past six years and until the date of final judgment.

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