Court Partially Grants Uber’s Motion to Dismiss Employment Case

The  Northern District of California granted in part Uber’s motion to dismiss a class action complaint over wage-and-hour violations under California law. The plaintiffs alleged that Uber violated California’s Unfair Competition Law (UCL) and the federal Declaratory Judgment Act (DJA), among other claims.  Two of the six claims were dismissed

The plaintiffs are Uber drivers who alleged “misclassification, including failure to reimburse business expenses, failure to pay minimum wage and overtime, failure to provide properly itemized pay statements, failure to provide sick leave, and unlawful business practices.” Plaintiff Thomas Colopy filed the case in October 2019, and the court denied his motion for a preliminary injunction. Other similar cases were consolidated into a class action in April, although Colopy was no longer mentioned in the complaint.

Uber claimed that Count I, “which seeks declaratory relief under the DJA” is “duplicative of Plaintiffs’ other causes of action and should therefore be dismissed.” In particular, Uber asserts that the relief sought in Count I “will be wholly addressed by any relief awarded on Plaintiffs’ other claims, ‘namely, whether Uber misclassified drivers as independent contractors and denied them certain employee benefits under state and local law.’” The court noted that plaintiffs “may plead alternative theories,” but they “may not recover twice.”

Uber also argues that Count I should be dismissed because it is premised on California Labor Code section violations.  The company argued that “(1) there is no private right of action under either Section 246 or 2750.3, and (2) even if a private right of action existed, Plaintiffs have failed to plead sufficient facts to state a claim for paid sick leave.” As a result, the court dismissed the Section 246 claim, which serves as a predicate to the UCL and DJA claims, with leave to amend. An amended complaint must “plausibly suggest that they would have qualified for paid sick leave under Section 246 and the local ordinances.”

Uber has also challenged Count VI, the plaintiffs’ UCL claim, asserting that plaintiffs “do not lack an adequate remedy at law,” as a result, “the equitable relief afforded under the UCL is unavailable to them.” Additionally, Uber argues that the plaintiffs lack standing under the UCL because “they have not plausibly alleged they suffered any injury in fact.” However, plaintiffs state that without the UCL they would “have no other means to recover damages for Uber’s violations of state and local paid sick time policies,” and they would not be able to “seek ‘injunctive relief for harm arising from Uber’s [ongoing] violation of Cal. Lab. Codes §§ 246 and 2750.3.’”

Furthermore, the UCL “limits standing to plaintiffs who have ‘suffered injury in fact and [have] lost money or property as a result of the unfair competition.’” While the plaintiffs alleged that they have “suffered injury in fact and lost money and property, including, but not limited to, business expenses that drivers were required to pay and wages that drivers were due,” the plaintiffs have “not adequately alleged that they would have qualified for paid sick leave and/or that they would have utilized it (and if so, how much) during the relevant period, had it been available to them.” As a result, the court also dismissed Count VI.

The court added that the plaintiffs and Uber disagree about the dismissal of plaintiff Colopy, specifically if the dismissal “has or has not already occurred and whether that dismissal should be with or without prejudice.” The court noted that there is no stipulation for the parties and the plaintiffs’ supposed dismissal of plaintiff Colopy happened after Uber filed an answer to the plaintiffs’ first amended complaint. The court said the plaintiffs’ “decision to omit Mr. Colopy from the Consolidated Complaint was intended as a request to have him dismissed from the case; it is not a waiver of his claims.”  Consequently, the court dismisses Mr. Colopy from the case, “but does so without prejudice to his claims.”

Uber is represented by Gibson, Dunn & Crutcher LLP. The plaintiffs are represented by Lichten & Liss-Riordan, P.C.

Uber has faced litigation and other efforts in relation to alleged misclassification. Recently, the California Public Utilities Commission has found that Uber drivers are employees, the California AG and city attorneys sued to end Uber’s misclassification and filed a preliminary injunction to immediately end the misclassification.