## Facts

- Deli Management, Inc. (Jason’s Deli) employed delivery drivers who used their personal vehicles to make restaurant deliveries.
- Jason’s required drivers to have an operable, legal vehicle and to maintain their own vehicle insurance and registration.
- Drivers were paid an hourly wage that, on its face, met or exceeded the federal minimum wage, and they received certain per-delivery or mileage-based payments aimed at covering some operating costs.
- Jason’s did not separately reimburse fixed vehicle ownership expenses such as insurance premiums and licensing/registration fees.
- Drivers alleged their unreimbursed fixed and operating vehicle expenses reduced their net pay below the FLSA minimum wage and constituted an unlawful “kickback” under 29 C.F.R. § 531.35.
- Jason’s moved for summary judgment on the FLSA minimum-wage claims.

## Issues

1. Whether failing to reimburse delivery drivers for fixed vehicle ownership expenses (e.g., insurance and registration) violates the FLSA minimum-wage requirement through the anti-kickback rule in 29 C.F.R. § 531.35.
2. Whether those unreimbursed fixed expenses must be treated as reducing wages below the minimum wage for purposes of the “free and clear” requirement.

## Decision

- The court granted summary judgment for Jason’s.
- It held the FLSA does not require reimbursement of fixed vehicle ownership costs merely because the employee uses a personal vehicle for deliveries.
- It rejected the drivers’ theory that unreimbursed fixed ownership costs are “tools of the trade” expenses or “kickbacks” under 29 C.F.R. § 531.35.
- Because the claim depended on counting fixed ownership costs as wage-reducing kickbacks, there was no material factual dispute requiring trial.

## Legal Principles

- FLSA minimum wage compliance is assessed under 29 U.S.C. § 206 and the “free and clear” rule in 29 C.F.R. § 531.35.
- A prohibited “kickback” under § 531.35 generally involves employer-imposed costs that are primarily for the employer’s benefit and that cut into required minimum or overtime wages.
- Fixed vehicle ownership expenses (e.g., insurance, registration) are not necessarily employer-benefit business expenses when they exist regardless of the employee’s work use of the vehicle.
- § 531.35 does not categorically require employers to reimburse all vehicle-related expenses whenever an employee uses a personal vehicle for work; the regulation targets employer-shifted business costs that functionally reduce wages below statutory levels.

## Conclusion

The court concluded that Jason’s payment practices did not violate the FLSA because unreimbursed fixed vehicle ownership costs were not unlawful kickbacks under § 531.35, so the drivers could not treat those costs as reducing wages below the minimum wage.


Benton v. Deli Mgmt., Inc., 396 F. Supp. 3d 1261 (N.D. Ga. 2019)