Perrin v. Papa John's International, Inc.
114 F. Supp. 3d 707
E.D. Mo.2015Background
- Perrin filed a class/collective action alleging FLSA and five-state minimum wage violations based on vehicle expense reimbursement.
- Defendants paid drivers via hourly wages, per-delivery vehicle expense reimbursements, and occasional box bonuses; these reimbursements used a flat per-delivery rate.
- The reimbursement rate was below the IRS standard business mileage rate; however, for non-delivery travel, reimbursements sometimes used the IRS rate.
- Defendants did not track actual driver expenses and did not require expense tracking by drivers; a split-wage system with a cash wage and tip-based on-the-road pay existed since 2008.
- Plaintiffs sought summary judgment on reimbursement reasonableness, tip credit application, and several affirmative defenses; Defendants opposed, arguing premature timing and factual disputes.
- The court granted partial relief on some issues and denied others, and denied as moot the motion to strike Matthiesen’s declaration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Reasonableness of reimbursement rate | Perrin argues rate is unreasonable under 29 C.F.R. 778.217. | Perrin argues IRS rate is the proper proxy; Defendants argue safe-harbor not mandatory. | Disputes on reasonableness remain; jury to decide. |
| Tip credit notice adequacy | Defendants failed to notify employees of max tip credit. | DOL guidance allows higher cash wage with tip credit if properly implemented. | Tip credit cannot exceed difference between cash wage and minimum wage; partial SJ for plaintiffs. |
| Exclusion of fixed costs | Fixed costs are incidental to employment and may be reimbursable. | Fixed costs are employer-agnostic; not legally required. | Material facts in dispute; summary judgment denied. |
| Affirmative defenses as to FLSA claims | Defendant defenses are improper or insufficient; intent is to preclude liability. | Defenses valid and material; summary judgment appropriate where defenses fail. | Some defenses dismissed (2,16,19,26,28,30-32) while others denied or denied without prejudice; scope limited. |
Key Cases Cited
- Fast v. Applebee’s Int’l, Inc., 638 F.3d 872 (8th Cir. 2011) (tip credit framework and overtime considerations under FLSA)
- Rivera v. Pen & Sons Farms, Inc., 735 F.3d 892 (9th Cir. 2013) (employer costs and benefits analysis for workplace expenses)
- Morrison v. Executive Aircraft Refinishing, Inc., 434 F.Supp.2d 1314 (S.D. Fla. 2005) (estoppel/waiver considerations in FLSA context)
- Zellagui v. MCD Pizza, Inc., 59 F.Supp.3d 712 (E.D. Pa. 2014) (default judgment context; IRS rate as reasonable approximation)