What is a “pizza delivery driver arbitration”?
Updated: Mar 18
If you have signed an arbitration agreement, you might think you cannot pursue a claim for unpaid wages. But you have more leverage than you think.
Our law firm, Biller & Kimble, LLC, represents pizza delivery drivers all across the country in cases claiming that their employer has shorted them on their automobile expense reimbursement payments.
The theory of the case is simple: delivery drivers are paid minimum wage (or less) and provide their own cars to make deliveries. Under federal law, the drivers must be fully reimbursed for these auto expenses or a minimum wage violation occurs.
A number of courts have ruled that, in order to comply with federal law, pizza industry employers must either (1) keep track of and reimburse for drivers’ actual auto expenses, or (2) reimburse at the IRS rate (currently $.56 per mile).
Instead, in our experience, pizza companies usually reimburse somewhere between $.25 and $.35 per mile, in other words, about half of the IRS rate. Our cases challenge this industry practice.
For more details on these cases, see our Pizza Delivery Driver Lawsuit page.
Most of the time, our cases proceed as large class actions, where a single court decides the fate of an entire group of delivery drivers. Through this process, we have scored some huge victories for pizza delivery drivers (see our Victories page for examples).
Other times, however, pizza industry employers require their employees to sign arbitration agreements. Arbitration agreements require the delivery drivers to pursue their claims through individual arbitration, which, according to the industry, is a cheaper, faster, and quieter way to resolve an employment dispute.
The companies require these arbitration agreements so they can avoid the types of expensive lawsuits summarized on our Victories page. If each delivery driver has to bring his or her own case, the theory goes, far fewer will actually do it.
But, it turns out, if you have signed an arbitration agreement, you likely have more leverage against your employer than you think. Let us explain why.
First, the employer’s arbitration fees are higher. Just to get an arbitration started, the employer is often required to pay a $1,900 filing fee. The employee’s filing fee is only $300, and BK will advance that cost for you.
Second, the employer has to pay for the arbitrator. In normal court, the judge is a government employee who is compensated by the state, federal, or local government. In arbitration, the “arbitrator,” who serves as the judge, charges the employer for all of the time they spend analyzing and adjudicating the case. This often costs thousands of dollars for the employer.
Third, the employer has to pay their own lawyer. Just like any case, the company will have to pay their own lawyer to defend them. Their lawyer typically charges hundreds of dollars per hour.
Fourth, the employer may have to pay OUR FEES TOO! In the event you prevail on your claims, you would be entitled to require the employer to pay your attorneys’ fees. While our fee is normally based on a percentage of your award, in arbitration, we are often able to pass 100% of our fees and costs on to the employer, leaving more money for the drivers.
Most individual pizza delivery driver’s damages range anywhere from $100 to $50,000. Even for those on the high end of this scale, it makes economic sense for the employer to settle the case early because if they proceed with arbitration, they could end up paying many times what the delivery driver is owed by the time it is all said and done.
So, have you signed an arbitration agreement? You have more leverage than you think. Contact our firm for a free consultation to see what we can do for you. If we are able to represent you, we will do so at no out of pocket costs to you.
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.