Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_15-cv-05128/USCOURTS-cand-3_15-cv-05128-3/pdf.json

Nature of Suit Code: 790
Nature of Suit: Other Labor Litigation
Cause of Action: 28:1332 Diversity-Fair Labor Standards Act

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

ANDREW TAN, et al.,

Plaintiffs,

v.

GRUBHUB, INC., et al.,

Defendants.

Case No. 15-cv-05128-JSC 

ORDER RE: DEFENDANTS’ MOTION 

TO DISMISS SECOND AMENDED 

COMPLAINT

Re: Dkt. No. 50

In this putative class action, Plaintiffs Andrew Tan (“Tan”) and Raef Lawson (“Lawson,” 

and together, “Plaintiffs”) sue Grub Hub Holdings Inc. and GrubHub Inc. (“GrubHub” or 

“Defendants”), a service that provides food delivery to customers via an on demand dispatch 

system. The gravamen of Plaintiffs’ Second Amended Complaint (“SAC”) is that the delivery 

driver plaintiffs were misclassified as independent contractors and denied the benefits of 

California wage-and-hour laws. (Dkt. No. 41.

1

) Now pending before the Court is Defendants’ 

motion to dismiss Counts II to V of the SAC for failure to state a claim. (Dkt. No. 50.) Having 

considered the parties’ submissions, and having had the benefit of oral argument on July 31, 2016, 

the Court DENIES the motion to dismiss. Plaintiffs have pleaded sufficient facts to plausibly 

support their claims. 

BACKGROUND

The Court previously discussed the factual background of this case in a previous order and 

incorporates that discussion here. (See Dkt. No. 38 at 1-3.) Following the Court’s dismissal of 

Plaintiffs’ First Amended Complaint (“FAC”) with leave to amend, Plaintiff filed the SAC, which 

 

1 Record citations are to material in the Electronic Case File (“ECF”); pinpoint citations are to the 

ECF-generated page numbers at the top of the documents.

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provides additional details regarding delivery drivers’ obligations during their work shifts. 

According to the SAC, drivers working for GrubHub are required to sign up for work 

shifts ahead of time (such as 2.5, 3, or 4 hour blocks). (SAC ¶ 14.) During work shifts, drivers 

must be within a particular assigned area—in Lawson’s case, a 30 square mile area—and be 

available to accept delivery assignments; drivers are not permitted to leave their zones unless 

instructed by a GrubHub dispatcher to perform a delivery outside of the assigned area. (Id. ¶¶ 14-

15.) Drivers are typically assigned between two and four or more delivery jobs per hour during a 

shift, with each delivery assignment typically taking between 30 minutes and an hour and a half to 

complete. (Id. ¶ 16.) If drivers fail to accept at least 75% of all delivery orders assigned to them, 

GrubHub will terminate them. (Id. ¶ 17.) Further, drivers risk termination if they fail to arrive at 

restaurants by a certain time designated by GrubHub. (Id. ¶ 18.) Given these restrictions, drivers 

are required to be in or very near to their cars at all times during their shifts and, as a result, are 

unable to engage in personal non-work activities. (Id. ¶¶ 18-19.) Thus, Plaintiffs allege, the 

entirety of drivers’ shift times is compensable working time. (Id. ¶ 14.)

The SAC sets forth five causes of action: (1) failure to reimburse for business expenses in 

violation of California Labor Code § 2802; (2) unlawful and/or unfair business practices under 

California Business and Professions Code §§ 17200-17208; (3) failure to pay minimum wage in 

violation of California Labor Code §§ 1197 and 1194; (4) failure to pay overtime in violation of 

California Labor Code §§ 1194, 1198, 510, and 554; and (5) claim for penalties pursuant to the 

Private Attorney General Act (PAGA), Cal. Lab. Code § 2698, et seq. Lawson alone brings the 

first four causes of action; Plaintiffs together bring the PAGA claims.

DISCUSSION

Defendants move to dismiss portions of the SAC on grounds that: (1) Lawson fails to state 

plausible claims for relief under California’s minimum wage and overtime laws (Counts III and 

IV); (2) Lawson fails to state a claim under the UCL (Count II) to the extent it relies upon his 

defective wage claims; and (3) Plaintiffs fail to state a plausible claim under PAGA (Count V).

I. Counts III & IV: California Minimum Wage & Overtime Laws

The Court previously dismissed Plaintiff’s minimum wage and overtime claims because 

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Plaintiffs failed to allege sufficient facts that give rise to a plausible inference that they were not 

paid minimum wage or overtime during at least one work week. (Dkt. No. 38 at 6-12.) 

Specifically, the Court noted that “[t]here are no allegations about what period of time or type of 

conduct Plaintiffs are counting as hours worked. Without these basic factual allegations, the Court 

cannot conclude that Plaintiffs’ minimum wage or overtime claims are plausible.” (Id. at 9.) 

Moreover, to the extent Plaintiffs contended that all of their shift hours are compensable (this had 

not been pled in the FAC), the Court was unable to make that determination “absent allegations 

about the number and timing of assignments, geographical restrictions, and what happens when a 

driver does not accept an assignment.” (Id. at 12.)

Plaintiffs now allege that all of their shift hours are compensable work hours (SAC ¶ 14) 

and, as noted above, they provide additional facts relating to drivers’ work shifts: in particular, the 

number and timing of assignments (between two and four or more delivery jobs per hour during a 

shift, each job typically taking 30 minutes to an hour and a half to complete (id. ¶ 16)), 

geographical restrictions (drivers must be within a particular assigned area and in or near their cars 

at all times during their shifts (id. ¶¶ 14-15, 18-19)), and what happens when a driver does not 

accept an assignment (GrubHub terminates drivers with less than a 75% acceptance rate of orders 

(id. ¶ 17)). Defendants argue that, even with these additional allegations, Plaintiffs wage-and-hour 

claims remain deficient. 

First, Defendants insist that Plaintiffs continue to provide insufficient detail regarding a

specific work week in which they were not paid overtime or were not paid minimum wages. (Dkt. 

No. 50 at 5.) According to Defendants, Landers v. Quality Communications, Inc., 771 F.3d 638 

(9th Cir. 2014), as amended (Jan. 26, 2015), requires Plaintiffs to allege facts “establishing the 

particular workweek in which minimum wage and overtime violations purportedly occurred.” 

(Dkt. No. 50 at 5 (emphasis in original)). But, as the Court previously noted, Landers does not 

require Plaintiffs to identify an exact calendar week or particular instance of denied overtime or 

minimum wage; instead, the allegations need only give rise to a plausible inference that there was 

such an instance. (Dkt. No. 38 at 8-9; see also Boon v. Canon Bus. Solutions, Inc., 592 F. App’x 

631, 632 (9th Cir. 2015); Varsam v. Lab. Corp. of Am., 120 F. Supp. 3d 1173, 1178 (S.D. Cal. 

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2015).) Drawing all inferences in Plaintiffs’ favor, Manzarek v. St. Paul Fire & Mar. Ins. Co.,

519 F.3d 1025, 1031 (9th Cir. 2008), Plaintiffs’ allegations give rise to the plausible inference that 

such an instance exists. For example, Plaintiffs allege that “Lawson worked approximately fortyfive hours” during the week of November 30, 2015 and “was not paid at time-and-a-half for the 

hours in excess of forty.” (Id. ¶ 23.) Taking as true Plaintiffs’ allegations that drivers are unable

to perform personal non-work activities during a shift (SAC ¶¶ 18-19), one could reasonably infer 

that Defendants violated the minimum wage and overtime laws where Lawson’s entire 45-hour 

work week in November 2015 was compensable.

Second, Defendants contend that Plaintiffs’ new factual allegations are implausible and do 

not establish that all of Plaintiffs’ shift hours are compensable. (Dkt. No. 50 at 6-8.) Defendants 

argue that: (a) the allegations that drivers are “typically assigned . . . between two and four or 

more delivery jobs per hour” and that each assignment “would typically take between 30 minutes 

and an hour and a half to complete” are contradictory and thus implausible; (b) the ability of 

drivers to decline up to 25% of assigned orders means that 25% of shift hours are drivers’ personal 

time; and (c) because Lawson worked a 30 square mile area, he was thus “free to roam” and not 

geographically restricted. Defendants are essentially asking the Court, on a motion to dismiss, to 

draw all inferences in their favor. The Court cannot do so. Manzarek, 519 F.3d at 1031. Drawing 

all inferences in Plaintiffs’ favor as required, each of the above allegations supports the reasonable 

inference that all shift time was compensable. For example: (a) while Plaintiffs allege the typical

number of assignments per hour and the typical time to complete each assignment, it is plausible 

that the time to complete assignments may in fact be less for some drivers, such that drivers could 

complete four or more assignments in an hour; (b) drivers could plausibly decline up to 25% of 

their assigned orders because they are otherwise already busy with orders (and not simply taking 

personal time); and (c) although Lawson’s working area was a 30 square mile area, he could still 

have been restricted—and not free to roam, as Defendants suggest—because drivers were required 

to be in or very near to their vehicles during shifts (SAC ¶¶ 18-19). While Defendants’ view of 

the facts may ultimately prevail, the Court cannot presently conclude that the SAC allegations are 

facially implausible.

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Third, Defendants claim that Plaintiffs have not provided the requisite detail regarding 

“what hourly and regular rates of pay they used to compute minimum wage and overtime pay, 

how they calculated those rates, or which records they consulted in doing so.” (Dkt. No. 50 at 14.) 

At the pleading stage, the level of detail Defendants seek is not required. As the Court noted 

before, the Ninth Circuit in Boon rejected the district court’s requirement that a complaint “contain 

an estimate of how much uncompensated time was worked, how often, and at what rate to survive 

a motion to dismiss.” 592 F. App’x at 632 (internal quotation marks and alteration omitted). 

Again, the complaint allegations need only give rise to a plausible inference that Plaintiffs were 

not paid minimum wage or overtime during at least one work week. (Dkt. No. 38 at 9.) 

Defendants’ reliance on Yucesoy v. Uber Technologies, Inc. does not compel a different result. 

No. 15-CV-00262-EMC, 2015 WL 6955140 (N.D. Cal. Nov. 10, 2015). There, the court 

dismissed plaintiffs’ minimum wage and overtime claims because they had not pleaded specific 

facts to support their contention that their waiting time was compensable. Id. at *3-4. Thus, it 

was unclear as to what plaintiffs contended was compensable “work” time and, in turn, the court 

could not discern the basis for plaintiffs’ theories for their wage and overtime claims. Id. Here, 

Plaintiffs’ allegations overcome this problem by alleging that all shift time is compensable work 

time. (SAC ¶¶ 14-19.) As stated above, Plaintiffs’ allegations give rise to a plausible inference 

that they were not paid minimum wage or overtime during at least one work week, and no 

additional detail is required at this time.

Lastly, Defendants argue that Plaintiffs’ minimum wage claim fails because Plaintiffs do 

not allege the costs or types of costs that were deducted when they made their minimum wage 

calculations or that such costs were the actual cause of Plaintiffs receiving less than the minimum 

wage in any given week. (Dkt. No. 50 at 9; Dkt. No. 60 at 8-9.) The SAC places Defendants on 

notice of the types of expenses that are at issue—namely, “expenses for [the drivers’] vehicles, 

gas, parking, phone data, and other expenses” (SAC ¶ 21)—and have sufficiently alleged that the 

payment of such expenses caused Plaintiffs to receive less than the minimum wage. (Id. ¶ 22 

(“Because Plaintiffs and other GrubHub drivers are paid by the delivery, and have been required to 

bear many of the expenses of their employment, their weekly pay rates have fallen below 

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California’s minimum wage in many weeks.”).) At this stage, the Court need not determine 

whether the identified expenses actually resulted in Plaintiffs receiving less than the minimum 

wage; rather, the allegations need only show that such causation is plausible. The Court concludes 

that it is. 

Accordingly, the Court DENIES Defendants’ motion to dismiss Plaintiffs’ minimum wage 

and overtime claims.

II. Count II: Unlawful and/or Unfair Business Practices

The Court dismissed Plaintiffs’ UCL claim with leave to amend to the extent it was based 

on Plaintiffs’ claims for failure to pay minimum wage and overtime (Counts III and IV). (Dkt. 

No. 38 at 12-13.) Plaintiffs have now sufficiently pled their minimum wage and overtime claims. 

The Court therefore DENIES Defendants’ motion to dismiss the UCL claims.

III. Count V: PAGA Claims

The Court previously dismissed Plaintiffs’ PAGA claims for failure to plead administrative 

exhaustion. (Dkt. No. 38 at 13.) In response, Plaintiffs added the following allegations:

33. Plaintiffs Tan and Lawson allege that GrubHub violated 

PAGA in the following ways: (1) failure to reimburse its drivers for 

all necessary expenditures incurred in performing their duties, 

including but not limited to fuel, car maintenance, phones, and data, 

in violation of Labor Code §2802; (2) failing to pay minimum wage 

for each week worked in violation of Ca. Lab. Code §§ 1197 and 

1194; (3) failing to pay overtime wages for all hours worked in 

excess of forty each week in violation of Cal. Lab. Code §§ 1198, 

1194, 510, and 554. 

34. Plaintiff Andrew Tan provided notice of GrubHub’s 

violations of various provisions of the California Labor Code as 

alleged in this complaint to the Labor and Workforce Development 

Agency (“LWDA”) and GrubHub on November 10, 2015. The 

LWDA has not provided a response to Plaintiff Tan’s written notice. 

See Cal. Lab. Code § 2699.3(a)(2)(A). 

35. Plaintiff Raef Lawson provided notice of GrubHub’s 

violations of various provisions of the California Labor Code as 

alleged in this complaint to the Labor and Workforce Development 

Agency (“LWDA”) and GrubHub on December 3, 2015. The 

LWDA has not provided a response to Plaintiff Lawson’s written 

notice. See Cal. Lab. Code § 2699.3(a)(2)(A).

(SAC ¶¶ 33-35.) Defendants complain that the allegations of administrative exhaustion remain 

deficient because Plaintiffs failed to plead the specific “facts and theories” that were provided in 

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their written notices to the LWDA. (Dkt. No. 50 at 17.) According to Defendants, “Plaintiffs 

have not established that they sent the LWDA anything more than a list of purported Labor Code 

violations by Grubhub.” (Dkt. No. 60 at 14.)

Drawing all inferences in Plaintiffs’ favor, the Court finds that Plaintiffs have sufficiently 

pled administrative exhaustion. Plaintiffs allege that they provided notice to the LWDA of 

“GrubHub’s violations of various provisions of the California Labor Code as alleged in this 

complaint” (SAC ¶¶ 34-35 (emphasis added))—that is, Plaintiffs allege, the notices included the 

specific Labor Code violations along with the supporting factual allegations set forth in the SAC. 

This is sufficient to plead notice of the “facts and theories” supporting Plaintiffs’ claims. Cal. 

Lab. Code § 2699.3; Varsam v. Lab. Corp. of Am., 120 F. Supp. 3d 1173, 1182 (S.D. Cal. 2015). 

The Court had also dismissed with leave to amend Plaintiffs’ PAGA claims to the extent 

those claims were based on Counts III and IV. (Dkt. No. 38 at 13.) Because Plaintiffs have now 

sufficiently pled Counts III and IV, the PAGA claims can proceed as well. 

Accordingly, the Court DENIES Defendants’ motion to dismiss the PAGA claims.

CONCLUSION

For the reasons set forth above, the Court DENIES Defendants’ motion to dismiss. 

Defendants shall file an answer to the SAC within 14 days of this Order. The Court will 

hold a further case management conference on September 15, 2016 at 1:30 p.m.

IT IS SO ORDERED.

Dated: July 13, 2016

JACQUELINE SCOTT CORLEY

United States Magistrate Judge

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