Thomas Chapman v. Yellow Cab Cooperative, 875 F.3d 846

Background

Chapman leased time in a taxi that was ultimately owned by Edwards; Edwards leased to Giri, who subleased to Chapman; Chapman collected fares and tips and paid rent to Giri.
Yellow Cab Cooperative referred business to Edwards’ cab; Chapman had no direct payments to or from Yellow Cab and alleged no direct employment contract with it.
After Chapman complained about not receiving minimum wage, he alleges Yellow Cab’s president told Giri Chapman was “fired,” and Giri terminated Chapman’s sublease.
Chapman sued under the Fair Labor Standards Act’s anti‑retaliation provision, asserting Yellow Cab was his employer.
The district court twice ordered more detailed pleading addressing factors distinguishing employees from independent contractors (citing Lauritzen and Supreme Court precedents); Chapman failed to supply the requested factual detail and the complaint was dismissed with prejudice.
The Seventh Circuit treated the district court’s order as a Rule 12(e) more‑definite‑statement demand, affirmed dismissal with prejudice because Chapman disobeyed the order and did not timely cure pleading deficiencies.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Chapman plausibly alleged he was an "employee" of Yellow Cab under the FLSA	Chapman: Yellow Cab’s control over dispatching and effect on his income makes it his employer despite intermediaries	Yellow Cab: Chapman was several steps removed (owner→lessee→sublessee); no direct control or employment relationship	Court: Chapman’s pleadings were implausible and lacked required detail; dismissal with prejudice affirmed after failure to comply with Rule 12(e) order
Whether district court may require pleading of facts corresponding to judicial "factors"	Chapman: District court improperly demanded detailed factor‑by‑factor facts beyond Rule 8	Yellow Cab/District Court: Details were necessary to respond and to assess plausibility; court properly used Rule 12(e)	Court: It is inappropriate to convert Rule 8 into fact‑pleading; but a Rule 12(e) order for a more definite statement was proper and Chapman failed to comply
Whether Twombly/Iqbal require pleading all factual elements or Lauritzen factors	Chapman: not directly argued; sought to rely on regulatory/control theory	Yellow Cab: Twombly/Iqbal require plausible claims; but do not mandate factor‑by‑factor pleading	Court: Twombly/Iqbal do not require exhaustive fact pleading; however Chapman’s failure to respond to a 12(e) order justified dismissal
Whether appellate court may consider new factual allegations raised for first time on appeal	Chapman: Presented additional facts on appeal strengthening employment assertion	Yellow Cab: New allegations cannot cure district‑court noncompliance	Court: New allegations on appeal are untimely; plaintiff cannot revive case by belated factual amendments on appeal

Key Cases Cited

Secretary of Labor v. Lauritzen, 835 F.2d 1529 (7th Cir. 1987) (factors relevant to employee vs. independent contractor analysis)
Callahan v. Chicago, 813 F.3d 658 (7th Cir. 2016) (entity several steps removed does not necessarily employ worker)
Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for pleadings)
Ashcroft v. Iqbal, 556 U.S. 662 (2009) (application of Twombly plausibility framework)
Swierkiewicz v. Sorema N.A., 534 U.S. 506 (2002) (Rule 8 does not require pleading all facts needed to prevail)
Erickson v. Pardus, 551 U.S. 89 (2007) (liberal pleading standards under Rule 8)
Airborne Beepers & Video, Inc. v. AT&T Mobility LLC, 499 F.3d 663 (7th Cir. 2007) (Rule 12(e) appropriate for ordering more definite statement)
Swanson v. Citibank, N.A., 614 F.3d 400 (7th Cir. 2010) (discussing scope of Twombly pleading requirements)
Bartholet v. Reishauer A.G. (Zürich), 953 F.2d 1073 (7th Cir. 1992) (abolition of code/fact pleading systems)
Bartels v. Birmingham, 332 U.S. 126 (1947) (Supreme Court precedent referenced regarding employment analysis)