Pizza Hut drivers claim $320M in back pay
Pizza Hut delivery drivers say that the bankrupt company’s largest U.S. franchisee shortchanged them on payments for using their own vehicles, adding to the list of cases roiled by massive claims from former employees.
Restaurant operator NPC International Inc. reimbursed the drivers for miles at such a low rate that they were underpaid by US$ 4 to US$ 12 per hour, according to a court filing Monday. With the claims topping US$4,000 each from 80,000 drivers, the total could exceed US$320 million.
A bankruptcy judge ruled Tuesday that their claims must stay on hold for now while NPC’S reorganization proceeds.
Still, their demands may resurface later in the process, much like other bankruptcies where creditors were confronted by workers who say they’ve been mistreated. In some cases, financiers were pushed to set up compensation funds to ease the burden on people who lost their jobs.
The dispute concerns the difference between the mileage reimbursement rate of 57.5 cents a mile set by the Internal Revenue Service and the 25 to 35 cents typically paid by NPC, according to the drivers. Shifts typically lasted seven hours, with five on the road and drivers bearing out- of- pocket costs such as gasoline, depreciation, insurance and maintenance, they said.
On top of that, the drivers said, the number of miles they drove was undercounted.
They claim top executives were aware of the alleged short- changing and have sought in legal filings to hold them personally liable.
Lawyers for NPC had asked for a stay against the claim to be extended to protect the executives from the driver lawsuit. Bankruptcy Judge David R. Jones ruled in their favour; similar stays are customary in Chapter 11 filings against all other litigation until the case is resolved.
In documents filed July 1 as part of its bankruptcy, NPC said it had trouble keeping drivers because more demand for deliveries amid the pandemic meant fewer were available, and because falling demand for its own products meant reduced tips. “As a result, the company has no other option but to increase wages to retain delivery drivers,” NPC said.
The company budgeted US$ 230,000 for reimbursable expenses owed from before the bankruptcy, a category that includes mileage as well as costs of owning or leasing a vehicle, cellphones, transportation, lodging, and dining.
Workers at bankrupt companies have been demanding payment for lost severance or other benefits. Toys “R” Us employees pressed financiers to create a US$ 20- million hardship fund for workers such as clerks, cashiers and warehouse staff hurt by the retailer’s liquidation.