A lawsuit alleges that by shortchanging its Iowa delivery drivers on mileage reimbursement, Domino’s Pizza is effectively paying those workers 35 cents an hour.
Alexia Stevens, a former Domino’s driver who worked for two years in North Liberty, is suing Pizza Brake Inc., a company that does business throughout Iowa as Domino’s Pizza. The lawsuit is filed on behalf of Stevens and all other drivers who have worked for Pizza Brake, which is owned by Stuart Bjerke of Ottumwa.
Stevens alleges the company’s reimbursement rate for the use of drivers’ personal vehicles is so low that it amounts to a “kickback” to the company, and has the effect of reducing the workers’ net wages to 35 cents an hour.
The federal minimum wage has been $7.25 per hour since July 2009.
Like many other companies, Domino’s Pizza employs delivery drivers who use their own automobiles to deliver food to customers. However, instead of reimbursing its drivers for the approximate cost of using those vehicles, Domino’s allegedly uses a methodology that results in an “unreasonably low” rate of reimbursement.
The lawsuit claims Domino’s and Pizza Brake reimburse drivers at a rate of 20 cents for each mile driven, which is less than half the IRS’ allowable business-mileage reimbursement rate of 54 to 58 cents per mile.
The driving conditions associated with the pizza delivery business results in more frequent and more costly maintenance, the lawsuit claims, and also results in a more rapid depreciation of vehicles. Delivery drivers, the lawsuit claims, also experience lower gas mileage and higher repair costs due to frequent braking, shorter routes, fewer highway miles and driving under tight deadlines for delivery.
Stevens claims she was paid $7.25 per hour, plus 20 cents per mile, while making deliveries for Domino’s between 2019 and 2021.
The lawsuit alleges Stevens was shortchanged 34 cents for every mile driven compared to the federal mileage rate. Because she averaged two or more deliveries per hour, with each trip averaging 10 miles, every hour she worked as a driver decreased her net wages by approximately $6.90, giving her a net hourly wage of roughly 35 cents an hour, the lawsuit claims.
That same reimbursement methodology has allegedly been used to compensate all of the delivery drivers working for Domino’s Pizza and its Iowa franchise, Pizza Brake.
The number and identity of other prospective plaintiffs who have yet to join the federal lawsuit is unknown, but attorneys for Stevens claim that number is known to the defendants.
The lawsuit seeks a court order certifying the case’s “collective action” status – similar to class-action status – under the federal Fair Labor Standards Act, as well as actual damages for unpaid wages, plus interest and attorneys’ fees.
The lawsuit was filed recently in U.S. District Court for the Southern District of Iowa. Similar lawsuits have recently been filed in other jurisdictions around the United States, including New Jersey, New York and the state of Washington.
The defendants in the Iowa case have yet to file a response to the lawsuit. Bjerke declined to comment Thursday when contacted by Iowa Capital Dispatch.