By Jonathan Stempel

A U.S. appeals court on Thursday said Papa John's International cannot force a Louisville, Kentucky, pizza delivery driver to arbitrate a claim that he was underpaid by invoking an arbitration agreement he said he never saw.

In a 3-0 decision, the 6th U.S. Circuit Court of Appeals in Cincinnati said a trial judge erred in dismissing Andrew Bazemore's claim that the pizza chain violated federal labor law by not reimbursing him enough for costs to operate his vehicle.

Circuit Judge Raymond Kethledge found "no reason whatever" to prevent reasonable jurors in the proposed class action from believing Bazemore's sworn statement that he never seen any agreement to arbitrate.

Bazemore said Papa John's reimbursed him at 25 cents to 31 cents per mile, about half the rate then recommended by the Internal Revenue Service, causing him to be paid less than the federal and state minimum wage. He sued on behalf of Papa John's delivery drivers in Kentucky.

Papa John's, which is based in Louisville, said Bazemore had agreed to arbitrate disputes as a condition of employment, and signed an arbitration agreement electronically.

Kethledge, however, said Bazemore wouldn't have sued had he thought there was such a condition.

"To hold otherwise would force Bazemore to give up either his job or his day in court," Kethledge wrote.

The appeals court returned the case to U.S. District Judge Rebecca Grady Jennings in Louisville.

Papa John's and its lawyers did not immediately respond to requests for comment.

Bazemore's lawyer Joshua Frank said he was pleased the court found that employers can require arbitration only upon showing that their workers "actually agreed to arbitrate."

The case is Bazemore v Papa John's USA Inc et al, 6th U.S. Circuit Court of Appeals, No. 22-6133.

(Reporting by Jonathan Stempel in New York; Editing by Leslie Adler)