“Better Ingredients, Better Pay?” – Courts to Consider Legality of Papa John’s Reimbursement Policy for Delivery Drivers

Executive Summary: Employers in the restaurant industry have seen an increasing trend of litigation over reimbursement policies for delivery drivers. For example, on February 12, 2019, three former delivery drivers for Papa John’s filed a putative class action lawsuit in the U.S. District Court for the Western District of Kentucky alleging Papa John’s failed to adequately reimburse its delivery drivers for “vehicular wear and tear, gas and other driving-related expenses.” In Hubbard et al. v. Papa John’s International, Inc., the plaintiffs allege Papa John’s reimbursement policy, which paid a flat fee “per delivery” (rather than the IRS mileage reimbursement rate), resulted in drivers earning less than the minimum wage mandated under Kentucky, Colorado, and Missouri law. Two plaintiffs in this case are also class members in a New York federal class and collective action, Durling et al. v. Papa John’s International, Inc., which alleges, among other claims, similar violations of the Fair Labor Standards Act (FLSA), and New York, Pennsylvania, New Jersey and Delaware law. That case is currently pending. Continue reading

Are You Paying Your Employees to Travel from One Customer to the Next?

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In most circumstances, the FLSA requires employers to pay non-exempt employees for the time they spend traveling from one work site to another during their work day.  This is not breaking news, but, as it is a topic that impacts a large number of employers, it is important for employers to understand the rules surrounding compensable travel time.  The U.S. Department of Labor (“DOL”) issued an opinion letter earlier this year on the topic that helps clarify the travel time principles under the FLSA and the multiple DOL regulations that come into play on this issue.  The DOL’s opinion letter FLSA2018-18, available at https://www.dol.gov/whd/opinion/FLSA/2018/2018_04_12_01_FLSA.pdf,  provides a straightforward guide to some simple rules to follow in this context. Continue reading