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Vehicle Expense Reimbursement Dispute against Pizza Hut Franchisees Hallrich Incorporated and Bluegrass Pizza

In early 2022, Hallrich sold some of its Pizza Hut stores to Bluegrass Pizza.  Hallrich and Bluegrass operate several Pizza Hut stores across the country.

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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.

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 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).

Since the Jefferis and Dimidik claims were ordered to be pursued through arbitration, our firm has settled claims for multiple other delivery drivers at Hallrich through arbitration proceedings. Learn more about what “arbitration” means here.

If you work or worked for Hallrich or SFR X Holdings, LLC d/b/a Bluegrass Pizza and want to learn more about the allegations made against them, please contact our firm at 513-202-0710 or by completing a contact form on this website.

If you work or worked for Hallrich or SFR X Holdings, LLC d/b/a Bluegrass Pizza as a delivery driver and want to learn more about the allegations made against them, please contact our firm at 513-202-0710 or by completing a contact form on this website

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 $.67 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/Bluegrass Pizza stores have failed to “reasonably approximate.”

Plaintiff alleges that this practice violates the federal Fair Labor Standards Act, the Ohio Constitution, and Ohio Minimum Wage laws.

 Violation of the Rules for Claiming a Tip Credit

Second, the plaintiff alleges the defendants 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

In addition, the plaintiff asserts a claim for unjust enrichment. She alleges that the Hallrich/Bluegrass Pizza 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 08-19-2024

The Court issued a decision finding that because the Plaintiffs unequivocally denied signing the arbitration agreements produced by Defendants, there was a genuine issue of material fact about whether the arbitration agreements were enforceable. The Court set a trial date for March 3, 2025, on the limited issue of whether Defendants arbitration agreement is a valid enforceable contract.

If you work or worked for Hallrich or SFR X Holdings, LLC d/b/a Bluegrass Pizza as a delivery driver and want to learn more about the allegations made against them, please contact our firm at 513-202-0710 or by completing a contact form on this website.

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Update 04-17-2024

Plaintiff filed a Response opposing Defendants’ Motion to Compel the plaintiffs to pursue their claims individually through arbitration. The Response argues that the arbitration agreements presented by the Defendants are not valid because they were not signed by the plaintiffs. The Defendants will now have the chance to file a Reply, and then the issue will be submitted to the Judge for a final decision.

 

If you work or worked for Hallrich or SFR X Holdings, LLC d/b/a Bluegrass Pizza as a delivery driver and want to learn more about the allegations made against them, please contact our firm at 513-202-0710 or by completing a contact form on this website.

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This field is for validation purposes and should be left unchanged.

Update 03-04-2024

The Bluegrass Pizza Defendants filed a Motion to Compel Plaintiff and the other individuals who had joined the lawsuit (“opt-in plaintiffs”) to dismiss their claims, and instead pursue their claims individually through arbitration. Plaintiff plans to oppose this Motion.

Update 02-12-2024

Plaintiff filed her Motion to Send Notice to Similarly Situated Employees. This Motion asks the Court to authorize a notice be mailed to all of the delivery drivers who worked for a Pizza Hut store owned and/or operated by Hallrich Incorporated and/or SFR X Holdings d/b/a Bluegrass Pizza from Jan. 11, 2021 to the present. The Notice is meant to inform the delivery drivers of the lawsuit and give them the opportunity to join the case if they so choose.

If you have any questions about whether you are eligible to join this case, or if you have any questions about delivery driver rights in general, please call our firm at 512-202-0710.

Update 01-11-2024

Lawsuit filed against Hallrich Incorporated and SFR X Holdings d/b/a Bluegrass Pizza

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