(Iowa Capital Dispatch) Another proposed class-action lawsuit has been filed in federal court on behalf of food-delivery drivers in Iowa, this time targeting a large Papa John’s franchise.
The lawsuit, which is similar to others filed against Pizza Hut, Casey’s General Stores, Papa John’s and Domino’s in recent years, was filed last week in the U.S. District Court for the Southern District of Iowa.
As with the other lawsuits, the new filing alleges that food-delivery drivers wind up working for less than the minimum wage once they are forced to “kick back” some of their pay to their employer in the form of uncompensated use of their personal vehicles.
Named as a defendant is PJIOWA of Des Moines, a company that, according to court records, has owned and operated at least 26 Papa John’s pizza restaurants in Iowa, Illinois and South Dakota, with most of those outlets based in Iowa. According to the lawsuit, PJIOWA reimburses its delivery drivers, who use their own vehicles to deliver the pizzas, on a per-mile basis that is substantially less than their actual cost of owning and operating a vehicle.
Specifically, the lawsuit claims that while the average cost of owning and operating a vehicle ranges from 77 cents to 82 cents per mile, PJIOWA has reimbursed its drivers at a rate of 35 cents per mile, while also paying the drivers $5 per hour — an amount that includes a “tip credit” enabling the company to pay less than the federal minimum wage of $7.25.
The lawsuit claims when factoring in the expense of the unreimbursed vehicle-related costs, every mile driven by the named plaintiff, Christina Knox of Iowa, has decreased her net wages by approximately 42 cents. During her employment, the lawsuit alleges, Knox has averaged about three deliveries each hour that she has worked, which has resulted in her driving an average of 15 miles each hour.
By that calculation, the lawsuit alleges, every hour Knox has worked has reduced her net wages by approximately $6.30. All of PJIOWA’s “delivery drivers had similar experiences” to those of Knox, as they were subject to the same company policy on reimbursement, the lawsuit claims.
Because the delivery drivers incurred unreimbursed automobile expenses, the delivery drivers were essentially “kicking back” to their employer enough money to trigger the alleged minimum-wage violations, the lawsuit asserts.
PJIOWA’s “low reimbursement rates were a frequent complaint of delivery drivers,” the lawsuit states, yet the company “continued to reimburse at a rate much less than any reasonable approximation of delivery drivers’ automobile expenses.”
PJIOWA has yet to file a response to the lawsuit but has denied similar allegations of wrongdoing in other lawsuits alleging violations of the same wage-and-hour laws.
The plaintiffs in the case are represented by Des Moines attorney Harley C. Erbe of the Erbe Law Firm.
Previous settlement kept secret
In 2015, a similar class-action lawsuit was filed against PJIOWA, alleging the company’s drivers collected unreasonably small reimbursement for vehicle expenses while also being forced to pay for their work uniforms.
The lawsuit, filed on behalf of Brandon Tegtmeier, a delivery driver at a Papa John’s restaurant in Davenport, alleged the franchise had been paying drivers $5.50 an hour, less than the minimum wage, because they were “tipped employees.” The workers, however, alleged they were regularly assigned tasks that didn’t generate tips, such as cleaning, answering calls and preparing pizzas.
After two years of litigation, that case was settled out of court, with the terms of the deal kept confidential at the insistence of all parties.
In successfully arguing for the terms of the deal to be kept secret by the court, attorneys for the drivers and Papa John’s told the judge in the case that confidentiality “serves the compelling public interest of promoting the amicable resolution of disputes, and the approval of the agreement is necessary in order to allow the final resolution of this matter. This is not a case which involves information of significant interest to the public.”
In court filings, the parties also stated that confidentiality would “prevent injury” to Papa John’s reputation “by ensuring that employees and other individuals who are not fully informed about the settlement do not mistakenly perceive this settlement as an admission of liability.”
2017 case involved 230 PJIOWA workers
In 2017, PJIOWA was again the target of a class-action lawsuit filed by employees.
In that case, Billy D. Frazier of Cedar Rapids and 229 other workers alleged they were paid as hourly employees who collected tips, but were required to spend more than 20% of their working time engaged in non-tipped labor, such as folding pizza boxes, washing dishes, sweeping, mopping, scrubbing the freezer, working on food preparation station, painting, purchasing inventory and general maintenance.
In 2020, the case was settled out of court, with the terms of the deal kept confidential at the request of the plaintiffs’ attorneys.
The Papa John’s cases are similar to those filed on behalf of Iowa delivery drivers working for other companies.
A 2021 lawsuit filed against Domino’s on behalf of driver Alexia Stevens and others was dismissed in 2022 with no public record of any settlement that may have been reached.
A similar lawsuit against Casey’s General Stores was filed in 2021 and was settled in 2022 with the company agreeing to pay the one named defendant, Jolene Greever, $3,000.
A separate lawsuit was filed against Casey’s in 2022 on behalf of delivery driver Derek Powell and more than a dozen other workers. Court records show three of the plaintiffs in that case settled their claims out of court for sums ranging from $1,200 to $3,500 each, while the claims made by the other plaintiffs were dismissed in 2024 for an alleged failure to respond to Casey’s requests for information.
