Casey’s denies allegations it shortchanges pizza-delivery drivers

By: - March 25, 2022 3:45 pm

Casey’s General Store is the latest pizza delivery business to face a lawsuit over mileage paid to drivers. (Photo by Jim Obradovich for Iowa Capital Dispatch)

Casey’s General Store is denying allegations that the company’s pizza-delivery drivers are being shortchanged on their wages.

The company, which operates roughly 2,300 stores in 16 states, allegedly pays its drivers a flat rate of $2 per delivery, but doesn’t track drivers’ actual vehicle expenses or make any attempt to reimburse drivers for gas and other specific expenses tied to the use of their cars.

According to a lawsuit filed last fall in federal court on behalf of drivers, the flat-rate payment plan shortchanges the Casey’s drivers at a rate of 23 cents per mile — a calculation that is based on a $2 payment for delivery runs that tend to average six miles. The payment equates to 33 cents per mile, which is 23 cents less than the IRS standard mileage rate of 56 cents per mile, the lawsuit claims.

Assuming the Casey’s drivers average three six-mile deliveries each hour, they are, in effect, “kicking back” to their employer $4.14 per hour from their own earnings ($1.38 per delivery, multiplied by three deliveries per hour), the lawsuit claims.

The drivers’ hourly pay is roughly equal to the federal minimum wage of $7.25 an hour, the lawsuit alleges, and so the effect of the “kickback” is that the drivers’ net pay is significantly less than the minimum wage.

The lawsuit was filed on behalf of Jolene Greever of Davis County, a Casey’s delivery driver who has worked for the company since 2019, and all other similarly situated employees of the company.

In recent court filings, Casey’s has denied any wrongdoing and stated that the plaintiff’s claims are, at least in part, barred by the statute of limitations.

Under the Fair Labor Standards Act, the statute of limitations for claiming unpaid wages is two years, unless there is evidence of a willful violation of the law, in which case the statute of limitations is three years. In this case, Casey’s argues any violations were good-faith errors and so the applicable statute of limitations is two years.

The company is also challenging the plaintiff’s efforts to make the lawsuit a class-action claim that could be pursued on behalf of multiple drivers, arguing that the company’s drivers are “not similarly situated to one another” in the sense that each of their potential claims are expected to be different.

A judge has yet to rule on those issues.

Papa John’s, Domino’s and others face similar claims  

A similar lawsuit was filed last fall, alleging Iowa delivery drivers working for Domino’s Pizza were effectively earning 35 cents an hour because the company wasn’t fairly compensating the workers for the use of their own vehicles.

That case was voluntarily dismissed by the plaintiff even before Domino’s filed an answer to the claim. The case was dismissed without prejudice, which allows the lawsuit to re-filed at some point.

Similar lawsuits have recently been filed in other jurisdictions around the United States, including New Jersey, New York and the state of Washington.

In 2015, a class-action lawsuit was filed against a Papa John’s franchise in Iowa that alleged the company’s drivers collected unreasonably small reimbursement for vehicle expenses, while being forced to pay for their work uniforms.

The lawsuit, filed on behalf of Brandon Tegtmeier, a delivery driver at a Papa John’s restaurant in Davenport, alleged the franchise paid drivers $5.50 an hour as “tipped employees,” even though they were regularly performing tasks that didn’t generate tips such as cleaning, answering calls and preparing pizza orders.

After two years of litigation, that case was settled out of court, with the terms of the deal kept confidential at the insistence of all parties.

In successfully arguing for the terms of the deal to be kept secret by the court, attorneys for the drivers and Papa John’s told the judge in the case that confidentiality “serves the compelling public interest of promoting the amicable resolution of disputes, and the approval of the agreement is necessary in order to allow the final resolution of this matter. This is not a case which involves information of significant interest to the public.”

In court filings, they acknowledged that confidentiality would “prevent injury” to Papa John’s reputation “by ensuring that employees and other individuals who are not fully informed about the settlement do not mistakenly perceive this settlement as an admission of liability.”

Last fall, a law firm that seeks to represent as many as 5,000 delivery drivers won conditional approval for class-action status in a lawsuit against a Domino’s Pizza franchise. The defendant in that case, known as STA management, was at one time one of the largest Domino’s franchises in the United States, with more than 50 locations throughout Michigan and Indiana.

In 2020, a federal judge approved a $650,000 settlement package as part of a class-action settlement in Michigan that involved 10 different Hungry Howie’s franchise locations. The delivery drivers in that case were allegedly reimbursed as little as 10 cents per mile. The settlement in that case covered more than 400 drivers who shared a portion of the $650,000 settlement based on the number of miles they drove.

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Clark Kauffman
Clark Kauffman

Deputy Editor Clark Kauffman has worked during the past 30 years as both an investigative reporter and editorial writer at two of Iowa’s largest newspapers, the Des Moines Register and the Quad-City Times. He has won numerous state and national awards for reporting and editorial writing. His 2004 series on prosecutorial misconduct in Iowa was named a finalist for the Pulitzer Prize for Investigative Reporting. From October 2018 through November 2019, Kauffman was an assistant ombudsman for the Iowa Office of Ombudsman, an agency that investigates citizens’ complaints of wrongdoing within state and local government agencies.

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