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Pagliacci Pizza, a Seattle-based pizza chain, has settled a class action lawsuit with two delivery drivers, alleging the company failed to properly pay its drivers or reimburse them for expenses.

The two drivers filed the lawsuit in King County Superior Court, claiming that Pagliacci underpaid drivers for most trips due to the practice of using a flat reimbursement for delivery-related auto expenses instead of the standard rate per mile, established by the Internal Revenue Service (IRS).

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Consequently, the company’s flat rates would often fail to cover the total cost of a delivery. At times, drivers earned less than minimum wage per hour due to this practice.

Pagliacci has agreed to pay $830,000 in the settlement.

“We have always aimed to fairly compensate our drivers for the use of their vehicles,” co-owner Matt Galvin said in a news release this week, obtained by . “We’re proud of our team of drivers and believe they provide the best food delivery service in Seattle. Pagliacci’s drivers are all company employees, not independent contractors, like most other delivery services.”

It’s the second class-action lawsuit that Pagliacci Pizza has settled regarding its delivery drivers. In 2021, the pizza chain settled with its drivers for $3.75 million after the drivers argued that the company failed to notify customers that a former $3 delivery fee never went to said delivery drivers. Drivers also cited they were allegedly required to pool their tips and share them with the kitchen staff.

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Founded in 1979, Pagliacci has 26 locations throughout the Puget Sound region. Galvin bought the pizza chain in 2000 with business partners Pat McCarthy and Pat McDonald.

Frank Sumrall is a content editor at MyNorthwest. You can read his stories here and you can email him here.