Pagliacci Pizza, Delivery Agents Agree to $ 3.75M Settlement and End Wage Dispute Lawsuit

Pagliacci Pizza and more than a thousand delivery drivers recently agreed to resolve a wage dispute over $ 3.75 million.

A class action lawsuit was recently announced against more than 1,000 current and former delivery agents and Pagliacci Pizza. The wage dispute lawsuit was settled for $ 3.75 million and will resolve claims relating to “wages, tips, breaks and the reimbursement of miles.” King County Superior Court Judge Catherine Shaffer oversaw the settlement talks and granted preliminary approval to the agreement. A final hearing is scheduled for July 16, according to Toby Marshall, attorney for former Pagliacci pizza driver Steven Burnett. Provided the agreement is concluded on July 16, the delivery drivers involved in the lawsuit can expect payment in September.

Delivery driver graphics; Image courtesy of mohamed_hassan via Pixabay,

The lawsuit covers 1,012 current and former drivers who have until June 15 to expel themselves from class if they wish but do not have to take any action to receive payment. According to Marshall, “a 25% portion of the settlement will be paid for legal fees and expenses, with drivers each receiving an average payout of $ 2,776, although the highest award will be a little over $ 25,000.” Marshall added:

“Pagliacci Pizza and its lawyers have taken a very tough line that they didn’t do anything wrong … we hope this will be a wake-up call to treat their drivers appropriately according to the law.”

What happened? Why was the lawsuit filed in the first place? Well, according to the lawsuit, the company “has been in breach of state law for a period of about six months in which customers were not notified on receipts or menus that none of a $ 3 delivery fee went to its drivers.” The company has since resolved this problem.

The lawsuit also alleged that “the drivers had to bundle their tips which were then shared with the kitchen staff.” However, this particular rule is no longer mandatory. Instead, “Drivers can voluntarily choose a dollar amount or a percentage of a tip to share with the kitchen.” Employee surveys are now also routinely conducted “to ensure employees are properly paid for their hours”.

According to the company, “Pagliacci deliverers make an average of $ 33 an hour in wages and tips.” The company also provides health care and a 401K match. These benefits are typically not available to delivery drivers in the restaurant industry.

The company decided to agree to the settlement in order to move forward after almost four years of litigation. Initially, the company pushed for arbitration, arguing that a “brief mention of arbitration in an employee handbook prevented Burnett from suing the Supreme Court.” The trial judge denied the application for compulsory arbitration and Pagliacci appealed to the Supreme Court. In August 2020, the Supreme Court upheld the lower court’s decision, stating that “Pagliacci’s arbitration clause was unenforceable for a number of reasons”.

From there, the parties agreed on mediation and negotiated the terms of the settlement agreement in January. Of the billing resources, “44% is used to pay damages based on the number of deliveries made by each driver between December 2016 and August 2017. Another 21% pay compensation for the reimbursement of miles. 17% of the bill is used for tip damage. 9.5% for missed breaks; and 7.5% will be allocated for credit card processing fees deducted from driver tips, ”according to court records.


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