Tan v. Grubhub, Inc.
171 F. Supp. 3d 998
N.D. Cal.2016Background
- Plaintiffs Andrew Tan and Raef Lawson are delivery drivers who sued GrubHub alleging they were misclassified as independent contractors and thus denied California wage-and-hour protections (FAC asserts reimbursement, wage statement, minimum wage, overtime, UCL, and PAGA claims).
- Drivers are paid per delivery (flat fee plus gratuities), must sign up for shifts, remain in designated areas, be available for assignments, follow company directions (where to wait, timeliness, dress, food handling), and risk termination for noncompliance.
- FAC alleges drivers incurred unreimbursed expenses (vehicle, gas, parking, phone data), resulting in pay below California minimum wage in many weeks; also alleges overtime violations based on long shifts and weeks over 40 hours.
- Defendants moved to dismiss all counts for failure to state claims and asked the Court to dismiss or stay the PAGA claim because an earlier-filed state PAGA action by another driver was pending.
- The court dismissed the Section 226 wage-statement claim with prejudice; upheld the §2802 reimbursement claim at the pleading stage; dismissed the minimum-wage, overtime, and PAGA claims for failure to plead required factual detail and PAGA exhaustion (leave to amend); UCL claim dismissed to the extent tied to dismissed predicate claims; court declined to stay or dismiss PAGA claims under Colorado River abstention.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| §2802 reimbursement — sufficiency of pleading | Plaintiffs identified types of unreimbursed expenses (vehicle, gas, parking, phone data); inference that expenses were necessary for app-based delivery | Defendants argued plaintiffs failed to identify specific necessary expenses, show employer knowledge, or plead particular workweeks | Court: §2802 claim survives Rule 8; types of expenses pleaded suffice and employer knowledge can be inferred |
| Minimum wage — pleading under Landers | Plaintiffs allege piece-rate pay and expenses caused many weeks to fall below minimum; assert entire shifts are compensable | Defendants say Landers requires at least one specific workweek showing unpaid minimum wages; allegations are conclusory | Court: minimum-wage claim dismissed with leave to amend for failure to plead facts about specific periods/compensable hours |
| Overtime — pleading under Landers and compensable on-call/waiting time | Plaintiffs allege regular work >8/12 hours per day and >40 hours per week, with example week for Lawson | Defendants contend allegations are conclusory; no facts on shifts, assignments, response frequency, geographic limits to show waiting time was compensable | Court: overtime claim dismissed with leave to amend; facts about how shifts/assignments operate and at least one plausible unpaid-workweek required |
| PAGA — standing/exhaustion and Colorado River abstention | Plaintiffs brought representative PAGA claim but conceded failure to allege LWDA notice/exhaustion; plaintiffs argued another pending state PAGA suit does not bar their suit | Defendants argued PAGA claims should be dismissed (or stayed) because another driver’s earlier-filed PAGA action overlaps and Colorado River abstention applies | Court: PAGA claims dismissed to extent predicated on insufficient Labor Code claims and for failure to plead LWDA notice (leave to amend); declined to dismiss or stay PAGA claims under Colorado River because federal action includes underlying Labor Code claims not in the state case and abstention is disfavored |
Key Cases Cited
- Landers v. Quality Comm’ns, Inc., 771 F.3d 638 (9th Cir. 2014) (pleading standard for wage-and-hour claims requires some factual showing of at least one workweek when unpaid)
- Gattuso v. Harte-Hanks Shoppers, Inc., 42 Cal.4th 554 (Cal. 2007) (interpretation of employer reimbursement obligations under §2802 discussed)
- Mendiola v. CPS Sec. Solutions, Inc., 60 Cal.4th 833 (Cal. 2015) (factors for determining whether on-call/standby time is compensable focus on employer control)
- Morillion v. Royal Packing Co., 22 Cal.4th 575 (Cal. 2000) (employer control governs whether waiting/on-call time is hours worked)
- Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal.4th 348 (Cal. 2014) (characterization of PAGA as a representative action serving the public interest)
- Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (U.S. 1976) (framework for narrow abstention where parallel state proceedings exist)
- Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (U.S. 1983) (district court’s duty to exercise jurisdiction, and abstention as exceptional)
- Intel Corp. v. Advanced Micro Devices, Inc., 12 F.3d 908 (9th Cir. 1993) (dispositive Colorado River factors and requirement of "full confidence" that state action will resolve federal litigation)