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GrubHub Can’t Duck Drivers’ Labor Action

SAN FRANCISCO (CN) — A federal judge refused Wednesday to certify a class of GrubHub delivery drivers who claim the food delivery service misclassified them as contractors, but denied the company's motion to dismiss the bulk of the drivers' claims.

U.S. Magistrate Judge Jacqueline Scott Corley ruled that lead plaintiff Raef Lawson can't represent the class because he refused to sign an arbitration agreement prohibiting him from participating in class actions with the company like the drivers he was seeking to represent.

"Isn't someone who didn't opt out better?" Corley asked the plaintiffs' counsel Shannon Liss-Riordan.

Liss-Riordan said GrubHub is using the arbitration clause to prevent Lawson from bringing a class claim and that arbitration clauses don't preclude someone from "participating passively" in a class action. She noted that a judge certified a class in a suit against Uber in which the lead plaintiff had also opted out of signing an arbitration agreement.

"[Lawson] is not a typical or adequate representative," Corley said. "He can't make the argument."

Liss-Riordan said the adequacy and typicality issue was easily remedied by adding a class representative to the suit who hadn't opted out of arbitration, and that her clients would file a motion for leave to amend that would include such a plaintiff.

Lawson accused GrubHub last September of misclassifying drivers as independent contractors, failing to reimburse them for business expenses and failing to pay them minimum and overtime wages. Lawson and a second plaintiff, Andrew Tan, are also seeking damages against the company for violating labor laws under California's Private Attorneys General Act.

GrubHub pays drivers a flat fee for each delivery they make during their shifts instead of compensating them for the total time they spend on call, according to the plaintiffs. Tan says he often worked more than 60 hours per week without overtime pay, but GrubHub denies that its drivers work the entire time they are on call.

In a ruling issued late Wednesday, Corley refused to dismiss the plaintiffs' minimum and overtime wage claims, unfair business practice claims and PAGA claims, finding that they had been sufficiently stated for the time being.

GrubHub attorney Theane Evangelis said at the Wednesday morning hearing that the plaintiffs couldn't make minimum wage and overtime claims because they hadn't specified what hourly and regular pay rates they used to make those claims.

"We don't know if they worked for eight hours and got $100 on some days, which would be more than the minimum wage," Evangelis said. "You don't know what they're talking about day-to-day and week-to-week. They still could've been meeting their friend for coffee at Starbucks."

"Actually, that's not true. You do know, you have the information," Corley said.

In her afternoon ruling, Corley found that the plaintiffs' wage claims only need to support an inference that GrubHub didn't pay them minimum or overtime wages during at least one work week, and that no additional details are required at this stage in the case.

Drivers are required to accept at least 75 percent of the calls dispatched to them during their shifts, the plaintiffs say. If their acceptance rate falls below 75 percent, or if they don't arrive at a restaurant by a designated cutoff time, GrubHub will fire them. To reach a restaurant on time, they need to be in or near their cars during their entire shifts, they say.

"Given the frequency and duration of job assignments, as well as the requirement that the drivers be in or very near to their cars at all time during their shifts, the drivers could not and did not engage in personal non-work activities during their GrubHub shifts," the plaintiffs say.

GrubHub counters that rejecting a quarter of their delivery calls means drivers can take a nearly 40-minute break during each 2.5-hour shift, amounting to 2.5 hours of personal time each day if a driver works four shifts a day. That means drivers spend most of their shifts not working, GrubHub says.

But in response, the plaintiffs say that drivers are allowed to reject calls because they often receive concurrent job assignments or assignments while making another delivery and can't accept every call.

Because drivers are paid by the delivery, and because GrubHub doesn't reimburse them for business expenses like gas and car maintenance, their weekly pay rates often fall below the state's minimum wage, according to the complaint.

In denying GrubHub's motion to dismiss the plaintiffs' PAGA claims, Corley found that the plaintiffs had sufficiently pleaded administrative exhaustion by informing the California Labor and Workforce Development Agency of GrubHub's labor violations claimed in its complaint. GrubHub had argued that the plaintiffs need to provide the specific details of their written notices to the agency to plead exhaustion.

The plaintiffs are represented by Shannon Liss-Riordan of Lichten & Liss-Riordan in Boston. Grubhub is represented by Theane Evangelis of Gibson, Dunn & Crutcher in Los Angeles.

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