Papa John’s to Settle Claims it Underpaid Delivery Drivers

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Papa John's shop

IIldar Sagdejev / Wikimedia Commons

Papa John’s shop

This story has been updated.

Papa John’s International says it has agreed to pay $12.3 million to settle a class-action lawsuit accusing the company of underpaying mileage reimbursements to its pizza delivery drivers in six states.

The suit, filed in federal court in St. Louis in 2009, represents about 19,000 drivers in Missouri, Florida, Illinois, North Carolina, Arizona and Maryland. The court record notes that a settlement was agreed upon earlier this month.

Papa John’s disclosed in its second-quarter earnings announcement Tuesday that a preliminary out-of-court agreement had been reached.

Other than stating the settlement amount, the Louisville-based company did not say if it changed its driver compensation practices as part of the settlement. As it has all along, the pizza chain denied any wrongdoing.

But attorneys for former pizza driver William Perrin of St. Louis detailed a corrupt scheme in which drivers “kicked back” money to the company by receiving lower reimbursements for the use of their vehicles to deliver pizzas.

According to the complaint, drivers were typically paid between $1 and $1.50 per delivery, regardless of distance, rather than the 45 to 55 cents per mile rate recommended by AAA and the IRS. That scheme cost the drivers $1.50 to $5.33 per hour, giving them a net hourly pay ranging from $1.48 to $5.75, according to the lawsuit.

pizza

(Read the lawsuit)

“The net effect of (Papa John’s) flawed reimbursement policy, instituted and approved by company managers, is that they willfully fail to pay the federal minimum wage to their delivery drivers,” the suit states. “Defendants thereby enjoy ill-gained profits at the expense of their employees.”

Phone calls to a Papa John’s spokeswoman and to the plaintiff’s attorneys were not returned Thursday.

The $12.3 million settlement took a large bite out of Papa John’s second-quarter earnings. After deducting for the expected settlement payment, its quarterly profit fell 36 percent to $10.8 million. The proposed settlement is subject to court approval.

Reporter James McNair can be reached at jmcnair@kycir.org or (502) 814-6543. 

Correction: An earlier version of this story incorrectly stated that the federal court record made no mention of a settlement. A docket entry a day earlier noted that the parties reached a settlement.

 

  • Joe

    I just got my check today…William perrin is a boss

  • R will

    How were tips to drivers accounted for in calculating wages?

  • jennie lait

    I work for papa Johns an get paid 4 dollars on road an 7.25 in store a and 1.25 a delivery . It’s bull crap cuz we r not making enuff to support one person much less feed an animal . We should be getting paid in and out the store 8 an hour regardless or more if possible can’t no one live off the rest wages.

  • I’ve also worked at Papa John’s as a driver and this work is sucks, so today I am working at the pizza store.

  • Mayn Uddin

    I get 0.57 cent per delivery in papa johns pizza
    Is it correct payment

  • Susan Pearson

    I work , as a full time driver for a papa johns in Plano Tx.
    Im working 50 hrs a week. many tips are only 1 and 2 dollars. I have realized many times that managers will split up a very good double run between two drvers (each take one) to acheive better production scores. In this process, both drivers lost money. I would have better off to stay home. I have put over 28 thousand miles on my car in a year. (33k on record) but this is calculated at 10 miles per delivery. All indications from my statistics study are that mean mileage is 8.2 miles and mq (map quest) mean time is about 18 min. Per run. However actual driving time was always greater. A Conservitive Calculated hourly wage including all varibles
    Is approx $ 4.30 per hr. Yet wage and hour dept explained that real mileage is not a factor considered in responsibility in meeting this requirement.