New York Domino’s Franchisee Failed to Properly Reimburse Delivery Drivers for Work-Related Vehicle Costs, Lawsuit Claims

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A Domino’s Pizza delivery employee alleges New York franchisee K3 Works, Inc. has failed to properly reimburse drivers for the reasonably approximate costs of using their vehicles for business purposes.

According to the 15-page proposed class and collective action, the defendants have used a “flawed method” to determine driver reimbursement rates, which the plaintiff claims are unreasonably less than a faithful approximation of the expenses drivers incur. More broadly, the amount in unreimbursed expenses incurred by drivers has caused their wages to fall below the federal minimum during “some or all workweeks,” the case alleges.

Further, the lawsuit claims the defendants’ “systematic failure” to properly reimburse delivery drivers for vehicle expenses amounts to a “kickback” to the franchisee “such that the hourly wages it pays to Plaintiff and Defendants’ other delivery drivers are not paid free and clear of all outstanding obligations” to K3 Works.

The defendants require drivers to maintain and pay for safe, legally-operable and insured vehicles when delivering Domino’s food, the case begins. Among the costs incurred by drivers are expenses for gasoline, vehicle parts and fluids, repair and maintenance, insurance, depreciation and other expenses linked to their work for Domino’s, the suit says.

Although the defendants’ reimbursement policy is to repay drivers on a per-delivery basis, this method, the lawsuit alleges, “equates to below the IRS business mileage reimbursement rate or any other reasonable approximation” of the costs of owning and operating a car. The complaint argues that although the IRS business mileage reimbursement rate during the applicable time frame ranged between $.535 and $.575 per mile, figures the suit says “represent a reasonable approximation of the average cost of owning and operating a vehicle for use in delivering pizzas,” the conditions in which Domino’s delivery drivers often have to work lead to more frequent maintenance expenses, more rapid vehicle depreciation and other higher expenses. 

Moreover, Domino’s delivery drivers must contend with “lower gas mileage and higher repair costs than the average driver,” factors that should influence the average cost of owning and operating a vehicle used within the delivery business, the case says.

“Defendants’ delivery drivers further experience lower gas mileage and higher repair costs than the average driver used to determine the average cost of owning and operating a vehicle described above due to the nature of the delivery business, including frequent starting and stopping of the engine, frequent braking, short routes as opposed to highway driving, and driving under time pressures,” the complaint reads. 

In all, the defendants have fallen short of their obligation to pay delivery drivers back for ongoing out-of-pocket expenses, much less for the costs incurred from owning and operating their cars for deliveries, the suit claims.

With regard to the plaintiff’s minimum wage allegations, the lawsuit alleges the unreasonable underestimation of delivery drivers’ vehicle reimbursements has caused the workers’ wages to fall below New York’s hourly minimum. From the case: 

“During the time Plaintiff worked for Defendants as a delivery driver, she was reimbursed just $1.00 per delivery and on average drove 8-12 miles per delivery. This means plaintiff was getting paid between $.125 to .08 per mile ($1.00 divided by 12 and 8 miles respectively).

During the relevant time period, the IRS business mileage reimbursement rate ranged between $.575 and $.535 per mile, which reasonably approximated the automobile expenses incurred delivering pizzas. … Using the lowest IRS rate and the highest rate per mile plaintiff was making per mile driven ($.125 per mile) in effect during that period as a reasonable approximation of Plaintiff’s automobile expenses, every mile driven on the job decreased her net wages by at least $.41 ($.535 - $.125) per mile.” 

Using a conservative underestimate of the plaintiff’s actual expenses and damages, the driver’s net wages decreased by at least $1.23 for every hour on the job, the complaint says.

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