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Hallrich Pizza Hut Delivery Driver Dispute

Our firm has filed multiple lawsuits and arbitrations against the Hallrich Pizza Hut franchise. The cases all make the same basic allegation: the company’s policy of requiring delivery drivers to provide cars to use at work, and failure to fully reimburse for the costs of those cars, results in a wage violation.

The Hallrich franchise operates over 100 Pizza Hut stores in Ohio, Pennsylvania, West Virginia, and Indiana. The franchise is operated by Hallrich Incorporated and North Coast Pizza, Inc.

Our firm first filed suit against Hallrich in September 2018, in a case called Jefferis v. Hallrich Incorporated, et al., No. 1:18-cv-687 (S.D. Ohio). In that case, the court ordered that the delivery drivers were required to pursue their claims through individual arbitration.

In the years since Jefferis, our firm has settled claims for multiple other delivery drivers at Hallrich through arbitration proceedings. Learn more about what “arbitration” means here.

Most recently, in November 2021, our firm filed another class action lawsuit against the Hallrich Pizza Hut stores. Dimidik v. Hallrich incorporated, et al., No. 3:21-cv-306 (S.D. Ohio). You can read the complaint here.

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Case Details

 

This lawsuit, and the similar lawsuit and arbitrations asserted against the Hallrich Pizza Hut stores before it, alleges that the franchise under-reimburses its delivery drivers for the costs the drivers incur when they use their car for the company’s purposes, i.e., to make deliveries. Specifically, the drivers claim that the company reimburses a per-mile amount (often around $.30 per mile) that is not enough to cover the drivers’ vehicle expenses. This alleged under-reimbursement results can result in a minimum wage or other wage and hour violation.

The Claims

Under-reimbursement of Vehicle Expenses

First, the plaintiff alleges that the company does not properly reimburse for vehicle expenses.

The drivers’ position is that they must be reimbursed at the IRS standard business mileage rate (currently $.585 per mile) when the employer does not collect records of the drivers’ actual expenses and reimburse based on those records.

Even if the company is permitted to reimburse based on an “approximation,” as we expect the defendants will argue, the plaintiff alleges that the Hallrich Pizza Hut stores have failed to “reasonably approximate.”

Violation of the Rules for Claiming a Tip Credit

Second, the plaintiff alleges the company failed to properly claim a “tip credit” against the minimum wage because they failed to actually pay the wage rate they promised to pay, after accounting for under-reimbursement expenses.

In addition to under-reimbursed expenses, the drivers claim they are entitled to the difference between full minimum wage and the “tipped wage rate” the employer claimed to pay, because the company failed to actually pay that tipped wage rate. For example, if a driver was paid $5.00 per hour on the road in a state where minimum wage was $7.25, they would be entitled to $2.25 for each hour worked ($7.25-$5.00=$2.25) if the plaintiff prevails on this claim.

Unjust Enrichment

Third, the plaintiff asserts a claim for “unjust enrichment”. She alleges that the Hallrich Pizza Hut stores unfairly benefit by requiring their minimum wage delivery drivers to cover one of their most costly business expenses without proper reimbursement. The drivers are conferring a benefit on the company, the company is aware of the benefit, and it would be unjust for the company to retain that benefit without commensurate compensation.

Update 03-11-2022

As we expected, Hallrich made a motion with the court asking to dismiss this case because, according to them, the plaintiff has signed a valid and enforceable arbitration agreement.

On March 10, 2022, Biller & Kimble filed our opposition to the company’s request. In it, we explained how forced arbitration conflicts with the purposes of the minimum wage laws and results in an unfair process for low-wage workers. Read our complete response brief here.

Now, the court will decide whether the case can proceed in court or whether it must go to arbitration.

To learn more about what we see as some of the problems with arbitration in the employment context, check out our blog post on the subject.

Let us know what you think! Should companies be allowed to require employees to waive their right to a jury trial as a condition of employment?

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