Pleading Minimum Wage Violations against Uber
A federal district judge has denied Uber’s motion for judgment on the pleadings in an important wage and hour case brought by UberBlack drivers (Razak v. Uber Technologies, Inc.). The order, from October, contains important rulings on what Uber drivers have to plead on the “employee” question to survive such a motion, and on what it takes for drivers to plead a minimum wage claim in Uber litigation.
With respect to employee status, the judge found that the drivers’ complaint contains allegations that make it “plausible” that they are employees, and not independent contractors, under the Fair Labor Standards Act. Here’s the key part of the order:
[W]ith respect to the degree of control exercised by Defendants (factor one), Plaintiffs allege, inter alia, that Defendants “control the number of fares each driver receives,” “have authority to suspend or terminate a driver’s access to the App,” “are not permitted to ask for gratuity,” and “are subject to suspension or termination if they receive an unfavorable customer rating[.]” (Compl. ¶ 91). As to whether the services Plaintiffs rendered require a special skill (factor four), Plaintiffs allege that, in order to serve as Drivers, “drivers must undergo PPA training, testing, examination, a criminal background check and driving history check.” (Id. ¶ 51). As to the importance of Plaintiffs’ services to the Defendants’ business (factor six), Plaintiffs aver that Defendants’ business is to “provide on-demand car services to the general public,” and that Plaintiffs are “drivers that perform on-demand transportation services for defendants.” (Id. ¶ 1, 24). Plaintiffs also specifically allege that they are “dependent upon the business to which they render service.” (See, e.g., id. ¶157 (“Plaintiffs and Class members are financially dependent on the fare provided to them by Defendants.”))
And, as the judge concludes, “[c]ourts in this district have found that plaintiffs had adequately pled the existence of an employer-employee relationship based on far less detailed complaints.” (The court also concludes that the drivers sufficiently alleged an employer-employee relationship under Pennsylvania state law, ruling that “Plaintiffs’ Complaint sufficiently alleges facts to demonstrate that Defendants exercised a high degree of control over the way Plaintiffs’ work was conducted.”) Given that the drivers here have essentially alleged the basics of the Uber business model, the order has broad implications for Uber drivers nationally.
Two, the judge finds that the drivers have adequately alleged that Uber violated their minimum wage rights. In a ruling that would again seem to have clear relevance for a wide range of Uber drivers, the judge concludes:
Plaintiffs’ Complaint contains sufficient factual allegations to permit the Court to allow the reasonable inference that Plaintiffs were not paid minimum wage. Specifically, Plaintiffs have alleged that, “at the end of each week, the driver receives an electronic earnings statement from Uber and Ge[g]en,” [Uber’s “transportation company in Pennsylvania”] which amounts to the driver’s “trip earnings’ less ‘miscellaneous’ expenses.” (Compl. ¶¶ 40- 41). “Trip earnings,” the Complaint alleges, “equal the driver’s fare less Uber’s fee” of twenty-five percent “taken off the top.” (Id. ¶¶ 42-43). Additionally, Plaintiffs allege that “Uber automatically deducts various expenses from the driver’s earnings,” including, but not limited to, “(1) regulatory fees accessed by the PPA, (2) vehicle payments, and (3) insurance premium payments.” (Id. ¶ 43). “The aforesaid expenses are automatically deducted from the driver’s earnings, regardless of whether the driver earned enough money to cover expenses. If there is a net negative balance, the driver must go to Gegen office and pay the balance in order to maintain access to his or her Uber account.”
This is to say, the Uber business model itself – according to which drivers get trip earnings minus Uber’s fee and expenses, irrespective of whether the total is greater than the minimum wage requirement – constitutes a sufficiently pled minimum wage claim. As with all orders at this stage of litigation, we can’t predict what the outcome of this particular case will be. But the judge here has held that a minimum wage complaint can withstand a motion for judgment on the pleadings by, in essence, outlining the Uber business model.