Hassell v. Uber Technologies, Inc.

Background

Kent Hassell alleged that Uber Technologies, Inc., doing business as Uber Eats, misclassified him as an independent contractor instead of an employee. He alleged violations of California labor laws based on Uber’s failure to reimburse delivery-related expenses, pay minimum and overtime wages, provide accurate wage statements, provide paid sick leave, and comply with other labor requirements. He also asserted a claim under California Business and Professions Code § 17200, which generally prohibits unlawful, unfair, or deceptive business practices, and sought to represent a class of Uber Eats drivers who worked in California.

Uber moved to dismiss all claims under Rule 12(b)(6), which tests whether a complaint alleges a legally sufficient claim. Uber also moved to strike class allegations concerning drivers bound by arbitration agreements with class-action waivers.

Proposition 22 and abatement

Uber argued that Business and Professions Code § 7451, enacted as part of Proposition 22, made app-based drivers independent contractors if four specified conditions were met. Uber argued that this provision either ended Hassell’s claims or prevented claims based on violations occurring after December 16, 2020. The court called this a potentially important and novel issue under California law.

The court denied the motion to dismiss to the extent it relied on this abatement argument. “Abatement” in this context refers to ending a pending statutory claim because a later law repealed or withdrew the underlying right. The court concluded that the current record did not permit a conclusive decision. It found, among other things, that Uber had not adequately shown who bore the burden of proving compliance with § 7451, had not shown that the statute repealed or displaced the California worker-classification rules, and had not provided sufficient evidence of an intent to supersede those rules. The court stated that Uber could raise the argument again in a motion for summary judgment after merits-based discovery.

Business-expense claim

The court found that Hassell corrected the deficiencies previously identified in his claim under California Labor Code § 2802. Hassell alleged that Uber had not reimbursed him for expenses he incurred while making deliveries, including gas, tires, and cell-phone data. The court concluded that it could reasonably infer that the alleged expenses were necessary and connected to his delivery work. Uber did not challenge the sufficiency of these allegations, and the claim remained live.

Minimum-wage claim

The court denied the motion to dismiss Hassell’s minimum-wage claim. Hassell identified a specific workweek in which he allegedly received less than California’s minimum wage, including when his alleged delivery-related expenses were considered. He also alleged that time spent logged into the Uber Eats application while waiting between deliveries was compensable work time.

The court held that Hassell alleged enough facts to plausibly claim that Uber controlled him during the waiting periods. The allegations included requirements to remain logged into the application, respond to delivery requests within several seconds, and accept enough deliveries to avoid possible discipline. The court allowed the minimum-wage claim to include both active delivery time and waiting time, while limiting that conclusion to the motion-to-dismiss stage. After discovery, Uber could seek summary judgment arguing that the waiting time was not legally compensable.

Overtime claim

The court denied the motion to dismiss Hassell’s overtime claim. Hassell identified a specific week in which he alleged that he worked 44 hours and two minutes, including time spent waiting between deliveries. He also identified particular days on which he allegedly worked more than eight hours while actively driving to pick up and deliver food. The court concluded that these allegations were sufficient to state an overtime claim. As with the minimum-wage claim, the court stated that the claim could later be narrowed after summary judgment if Hassell could not substantiate his allegations about compensable waiting time.

Wage-statement claim

The court denied the motion to dismiss Hassell’s claim under California Labor Code § 226 for inaccurate wage statements. Hassell alleged that his statements, available only through the Uber Eats application, did not identify his total hours worked, the time spent picking up or delivering food, or his hourly wages. Because the court found that Hassell had adequately pleaded minimum-wage and overtime claims, it rejected Uber’s argument that the wage-statement claim failed because it was derivative of those claims. The court allowed the wage-statement claim to proceed without qualification.

Business and Professions Code § 17200 claim

The court granted the motion to dismiss Hassell’s § 17200 claim in its entirety and dismissed that claim with prejudice. The court found that Hassell had not shown that he lacked an adequate legal remedy for alleged violations involving expense reimbursement, minimum and overtime wages, and wage statements. It also found that he had not adequately alleged a § 17200 claim based on alleged violations involving willful worker misclassification, paid sick leave, or Labor Code § 1197.1.

For the misclassification theory, the court found that Hassell’s allegations that Uber’s practices were widely discussed did not adequately allege that Uber acted knowingly and voluntarily, as required for “willful misclassification.” For the paid-sick-leave theory, Hassell did not adequately allege that he requested leave and was denied it, or that he first pursued relief through the Labor Commissioner. For the Labor Code § 1197.1 theory, Hassell did not respond to Uber’s argument that the provision did not provide a private right of action for the penalties at issue. Because Hassell had already had an opportunity to amend and had not cured the deficiencies, the court found further amendment would be futile and dismissed the § 17200 claim with prejudice.

Motion to strike class allegations

The court denied Uber’s motion to strike class allegations concerning putative class members bound by enforceable arbitration provisions. It found that the record was not developed enough to decide whether those allegations were proper. Before class certification, Uber could seek permission to file a limited Rule 56 motion, meaning a motion for summary judgment, directed at whether those class allegations could proceed.

Disposition

The court granted in part and denied in part Uber’s motion to dismiss and denied Uber’s motion to strike. Four claims remained live: failure to pay business expenses, failure to pay minimum wages, failure to pay overtime wages, and failure to provide accurate wage statements. The court dismissed the § 17200 claim with prejudice.