Lawson v. Grubhub, Inc.

Background

Raef Lawson’s operative complaint contains five counts: expense reimbursement, minimum wage, overtime, violation of California’s Unfair Competition Law, and civil penalties under the Private Attorneys General Act (PAGA). The parties agreed to divide the case into two phases. The first phase concerned Lawson’s individual claims and whether he was an “aggrieved employee” who could pursue PAGA penalties on behalf of similarly situated individuals. The second phase would address the PAGA penalties claim if Lawson had suffered at least one labor-law violation.

After a 2017 bench trial, the court entered judgment for Grubhub on Lawson’s expense-reimbursement, minimum-wage, and overtime claims. The Ninth Circuit later vacated that judgment in light of developments in California law and sent the case back. On remand, this court ruled that the Borello standard governed the expense-reimbursement claim and that the court’s earlier finding that Lawson was not an employee controlled that claim. For the minimum-wage and overtime claims, the court applied the ABC test. It found that Grubhub had not shown that the business-to-business exemption applied or established the relevant second part of the ABC test. The court found Lawson was an employee for those claims, awarded him judgment on the minimum-wage claim, and awarded Grubhub judgment on the overtime claim. The PAGA penalties claim had not yet been decided.

Grubhub’s Motion

Grubhub moved under Federal Rule of Civil Procedure 54(b) for entry of a separate judgment on Lawson’s individual expense-reimbursement, minimum-wage, and overtime claims. Rule 54(b) can permit a final judgment on fewer than all claims, but the resolved claims must be sufficiently separate from the remaining claims and there must be no just reason for delay.

Grubhub alternatively asked the court to certify an interlocutory appeal under 28 U.S.C. § 1292(b) and stay the case. That procedure requires a controlling legal question, substantial disagreement about that question, and a finding that an immediate appeal could materially advance the end of the litigation.

Court’s Analysis

The court concluded that Lawson’s individual claims were not sufficiently separate from the unresolved PAGA penalties claim. The PAGA claim remained unresolved as to the specific violations Lawson suffered, creating overlap with the individual claims. The claims also involved the same legal standards and many of the same facts, including Grubhub’s policies, business model, and operations. The court found that an immediate appeal could result in repeated review of substantially the same facts and could delay resolution of the PAGA claim.

The court also held that Grubhub did not satisfy the requirements for an interlocutory appeal. Grubhub identified three issues: whether mileage expenses could be included in Lawson’s effective hourly-rate calculation; whether certain time when Lawson was available but not making deliveries counted as compensable work time; and whether Lawson’s work was outside Grubhub’s usual business. The court found that the first issue was not controlling because Lawson would recover some minimum-wage damages even without including mileage expenses. It found that the other two issues involved applying established legal standards to the facts, rather than controlling legal questions appropriate for interlocutory review.

Disposition

Judge Jayqueline Scott Corley denied Grubhub’s motion. The court did not enter the requested separate judgment, did not certify the requested interlocutory appeal, and did not stay the case. The June 8, 2023 case management conference was changed from an in-person event at 10:00 a.m. to a 1:30 p.m. conference by Zoom. The order disposed of Docket No. 317.