Wu v. Shopify Inc.

Background

Hong Wu alleged that he worked as an artificial-intelligence engineer at Shopify for about a year. He alleged that after Shopify assigned him to report to Andrew McNamara, his responsibilities declined and Shopify eventually discharged him. Wu claimed that Shopify discriminated and harassed him because of his race and his son’s special needs, retaliated against him after he raised concerns about possible privacy violations, failed to accommodate his needs, breached oral and implied employment contracts, negligently hired, supervised, or retained employees, and intentionally caused him emotional distress.

Shopify moved to dismiss under Rule 12(b)(6), which permits dismissal when a complaint does not allege enough facts to state a legally plausible claim. At this stage, the court generally accepts well-pleaded factual allegations as true and draws reasonable inferences for the plaintiff, but it need not accept conclusory allegations or unreasonable inferences.

Court’s Analysis

Discrimination and harassment. The court held that Wu did not allege enough nonconclusory facts to plausibly connect his race or his association with his son to Shopify’s termination decision. He did not identify sufficiently comparable employees of other races who were treated more favorably. Although he alleged that McNamara instructed him to communicate less with colleagues, he did not allege enough facts showing that the referenced Caucasian employees were similarly situated. He also did not connect that directive to his termination.

The court separately held that Wu’s harassment claim was inadequately pleaded because the complaint described personnel decisions rather than conduct outside ordinary job performance that conveyed hostility, bias, or an offensive message. The court found that Wu’s descriptions of being isolated, demeaned, and stripped of duties were not supported by specific factual allegations.

Retaliation. Wu asserted retaliation claims under California’s Fair Employment and Housing Act and California Labor Code section 1102.5. The court found that he did not sufficiently connect his October and November 2024 complaints to his March 2025 termination because the four- or five-month gap was too long, standing alone, to support the required inference of causation. The court also found no sufficient connection between his February 2025 complaint to Matthew Colyer and the termination because Wu did not allege that Colyer participated in the termination decision or communicated the complaint to someone who did.

However, the court held that Wu sufficiently alleged retaliation based on a reduction in his job responsibilities. After Wu raised privacy concerns to McNamara, McNamara allegedly instructed him not to write design documents and to communicate less with team members. Because those activities were integral to Wu’s effectiveness at work, the court treated the reduction in responsibilities as an adverse employment action. The court did not extend that theory to Wu’s termination because he did not allege facts connecting the reduced responsibilities to Shopify’s stated performance-based reason for terminating him.

Accommodation and interactive-process claims. The court held that Wu did not state a claim for failure to accommodate because his two alleged requests for time off to care for his son were granted. It also held that he did not state a claim for failure to engage in an interactive process because he did not allege a breakdown in communication and alleged that Shopify provided every accommodation he requested.

Derivative, contract, negligent-supervision, and emotional-distress claims. The court dismissed the claims for failure to prevent discrimination, harassment, and retaliation, and for wrongful termination in violation of public policy, because the parties agreed those claims depended on the underlying discrimination, harassment, and retaliation claims. The court also found that Wu’s oral- and implied-contract allegations did not identify enough facts about the alleged agreement to overcome California’s presumption that employment is at will.

The negligent hiring, supervision, and retention claim failed because Wu did not allege nonconclusory facts showing that Shopify knew or should have known that an employee posed a risk of discriminating, harassing, or retaliating against him. The intentional-infliction-of-emotional-distress claim failed because Wu described personnel decisions rather than extreme and outrageous conduct and alleged only conclusory facts about severe emotional distress.

Disposition

Judge Rita F. Lin granted in part and denied in part Shopify’s motion to dismiss. The retaliation claims were sufficiently alleged to the extent they were based on diminished responsibilities. Otherwise, all of Wu’s claims, including the remaining retaliation claims concerning termination, were dismissed with leave to amend. The court permitted Wu to file an amended complaint by January 5, 2026, but barred new claims or parties and changes beyond correcting the identified deficiencies unless the court granted permission or the parties stipulated under Federal Rule of Civil Procedure 15.