Papa John’s Franchise Chain Failed to Fully Reimburse Delivery Drivers’ Expenses, Lawsuit Claims

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The operators of 125 Papa John’s Pizza restaurants across the U.S. face a proposed class and collective action that alleges they failed to properly reimburse delivery drivers for business expenses.

The 50-page lawsuit, which names as defendants two individuals and more than two dozen entities who operate under the Bajco Group tradename, claims that delivery drivers who worked at the defendants’ Papa John’s restaurants were required to pay for expenses associated with the use of their own automobiles and cell phones but were not reimbursed for their actual expenses or a reasonable approximation of such.

The case contends that because the workers were paid at or close to the minimum wage and incurred unreimbursed expenses, they “kicked back” to the defendants “an amount sufficient to cause minimum wage violations.”

Moreover, the suit says the Papa John’s operators also applied an unlawful tip credit to workers’ wages given the employees were paid a lower wage than they were initially told they would receive.

The lawsuit alleges violations of the federal Fair Labor Standards Act and several state laws.

Per the case, Papa John’s delivery drivers are required to supply their own automobiles and cell phones in order to deliver food to the defendants’ customers. In the course of performing their jobs, the workers incur various expenses, including for automobile costs and depreciation, gasoline, maintenance and parts, insurance, financing charges, cell phone use, GPS charges and other necessary equipment, the suit relays.

According to the filing, the defendants reimburse workers for their job-related expenses based on a set amount for the number of deliveries they complete, except for workers at a Champaign, Illinois Papa John’s who are reimbursed based on a percentage of each order.

Per the suit, the defendants neither record drivers’ actual expenses nor pay them based on a reasonable approximation of their business-related costs. The IRS standard business mileage rate, which represents a reasonable approximation of the costs of operating a motor vehicle for delivering pizza, ranged from $0.535 to $0.625 per mile during the timeframe relevant to the complaint, yet delivery drivers were reimbursed at well below this rate, the case argues.

Moreover, the suit says Papa John’s delivery drivers incurred even more expenses than are accounted for in the IRS rate since they are also required to use their own cell phones and GPS to perform their jobs.

The lawsuit argues that the defendants’ policy of under-reimbursing delivery drivers allows the restaurant operators to “shift business expenses onto their employees,” and provides even more benefits than the savings they receive from their alleged violations of labor laws.

The plaintiffs, former Papa John’s delivery drivers, look to represent similarly situated current and former delivery drivers employed at the defendants’ Papa John’s stores at any time during the past three years and until the date of final judgment in this matter.

The lawsuit names the following entities as defendants:

• Bajco 100, LLC;
• Bajco Arizona, LLC; 
• Bajco Central, LLC; 
• Bajco Florida, LLC; 
• Bajco Global Management, LLC ; 
• Bajco Global Management II, LLC; 
• Bajco Gulf, LLC; 
• Bajco Illinois, LLC; 
• Bajco International Holdings, Inc.; 
• Bajco International Investments, LLC; 
• Bajco International, LLC; 
• Bajco Michiana, LLC;
• Bajco Michiana II , LLC; 
• Bajco Michiana III, LLC; 
• Bajco Michiana IV, LLC;
• Bajco Michiana V, LLC; 
• Bajco New York, LLC; 
• Bajco North, LLC; 
• Bajco Ohio, LLC; 
• Bajco Ontario, Inc.; 
• Bajco Real Venture II, LLC; 
• Bajco Real Venture III, LLC; 
• Bajco Restaurant Holdings, LLC; 
• Bajco Venture Funding II, LLC; 
• Bajco Venture Funding, LLC; 
• Bajco Williamsport, LLC; 
• Bajco Wisconsin, LLC; and
• Bajco, LLC.

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