BREAKING: FEDERAL JUDGE SIDES WITH DELIVERY DRIVERS OVER PIZZA INDUSTRY
Updated: May 14
As many of you are aware, the attorneys at Biller & Kimble, LLC have spent the last six years fighting for our pizza delivery driver clients against the pizza industry. The battle is over how much mileage the companies need to reimburse the drivers for the employees having to use their cars. Today, we scored our biggest victory yet.
Everyone involved—the drivers and the companies—agree that the drivers must be reimbursed something for their auto expenses. The dispute is over how much the drivers should get.
For many years, the pizza industry claimed that the law allows them to “reasonably approximate” the drivers’ expenses and still meet the minimum wage requirements. If you are wondering what that means, you’re not alone. Basically, the pizza companies can claim that anything they pay “reasonably approximates” the drivers’ expenses, no matter how much the driver actually had to pay in things like wear-and-tear, gas, depreciation, insurance, taxes, financing, repairs, maintenance, etc. Some companies pay mileage rates anywhere from $.15 to $.30 per mile. No matter what the company pays, the pizza companies claim it complies with the law.
Our firm has argued in federal courts across the country that this standard gives an unfair advantage to the pizza industry and short-changes the drivers. Basically, the pizza companies get to pay whatever reimbursement rate they want, and the only way for the workers to challenge it is to file a lawsuit.
Instead of a “reasonable approximation” standard, our firm argues that companies must either (1) keep records of all of the drivers’ auto expenses and reimburse for them, or (2) reimburse at the IRS standard business mileage rate (currently $.56 per mile). These choices come right out of the Department of Labor’s Field Operations Handbook. The pizza industry conveniently ignored this guidance for many, many years.
To someone who isn’t a delivery driver, the difference between $.25 and the IRS mileage rate of $.56 might not sound like much. But because pizza delivery drivers put so many miles on their cars, this difference really adds up.
In 2019, Biller & Kimble scored a huge victory in the drivers’ favor, when we successfully argued to two Ohio federal courts that employers who do not pay actual expenses must reimburse at the IRS rate. We blogged about one of these decisions at the time: BREAKING NEWS: Biller & Kimble scores huge victory for pizza delivery drivers.
The Ohio decisions had an immediate impact. Right away, our office learned from many of our clients who work in the Southern District of Ohio (the district where the decisions were made) that, after the decisions came out, the pizza companies they worked for started reimbursing at the IRS rate. In other words, drivers were now receiving an additional ~25 cents for each mile they drove. In some cases, some of the employers began paying full minimum wage too!
But, the pizza industry was not ready to give up on their preferred “reasonable approximation” standard. In 2020, it appears that the pizza industry went around the courts and congress to successfully lobby the U.S. Department of Labor to issue an “Opinion Letter” that rejects the IRS rate and adopts the industry’s vague “reasonable approximation” standard. The Opinion Letter even went so far as to try to discredit the opinions of federal judges who, as noted above, had reached the opposite conclusion.
Since the Opinion Letter was issued in August 2020, our firm has heard a different tune from pizza companies we are facing in litigation. With the backing of the U.S. DOL, the pizza industry became confident that they would be permitted to continue passing off billions of dollars of their own operating expenses to their lowest paid workers.
But, our firm never stopped advocating for what we believe is the proper standard. We continued to argue in courts all around the country that companies that do not keep records of actual expenses must reimburse at the IRS rate. We also argued that the Department of Labor’s Letter should be ignored and disregarded for a number of reasons.
Today, we scored our biggest victory yet. In an emphatic opinion, Judge Rose of the Southern District of Ohio rejected the reasoning provided in the DOL Opinion Letter and confirmed that the IRS rate standard rightly applies. Read the full Opinion here.
In his latest decision, Judge Rose explains in detail why the DOL Opinion Letter is unreasonable and misconstrues the law. On the other hand, he explains why the IRS rate standard provides the type of clarity and predictability that is necessary for the minimum wage laws to function.
Of course, the fight will continue. We suspect the pizza industry will try to come up with a new argument why they should get to nickel-and-dime drivers and keep mileage rates low.
But, for now, Judge Rose’s decision goes a long way in confirming delivery drivers’ rights. If you are delivery driver and you are reimbursed less than the IRS rate ($.56 per mile) for each mile driven, call out office at 513-202-0710 for a free consultation.
ADVERTISING ONLY: The information on this blog is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.
Past results obtained by Biller & Kimble, LLC are no guarantee of future results. Each case or matter is different and must be judged on its own merits.