throbber
FILED
`
`CIVILDIVISION
`
`
`OcT 24 2022
`
`
`Court of the
`IN THE SUPERIOR COURTOF THE DISTRIC OPELNaumvia
`
`CIVIL DIVISION
`
`DISTRICT OF COLUMBIA,
`a municipal corporation
`400 6th Street NW
`Washington, D.C. 20001,
`Plaintiff.
`
`Vv.
`
`SHIPT,INC.,
`17 20th Street N Suite 100
`Birmingham, AL 35203
`Serve on: National Registered Agents, Inc.
`1015 15th St. NW,Suite 1000
`Washington, DC 20005,
`
`Defendant.
`
`Co
`Case No.:
`
`9 6 9 2
`OF
`JURY TRIAL DEMANDED
`
`Poo.
`& 9 a9
`oe
`
`
`
`COMPLAINT
`
`Plaintiff District of Columbia (“District”), through the Office of the Attorney General,
`
`brings this enforcementaction against DefendantShipt, Inc. (“Shipt”), a delivery service company,
`
`for violations of the District?s Minimum Wage Revision Act (““MWRA”), D.C. Code § 32-1001,
`
`et seq., Wage Payment and Collection Law (“WPCL”), D.C. Code § 32-1301, et seg., Sick and
`
`Safe Leave Act, D.C. Code § 32-531.01, et seq., Universal Paid Leave Act (““UPLA”), D.C. Code
`
`§ 32-531.01, et seg., and Workers’ Compensation Act (“WCA”), D.C. Code § 32-1501, et seq. In
`
`support ofits claims, the District states as follows:
`
`INTRODUCTION
`
`1.
`This is a case about worker misclassification, which occurs when an employer
`misclassifies an employee as an “independentcontractor.” Muchturns on this classification, as a
`suite of legal rights and duties attach to employees, but notto independent contractors. Through
`
`

`

`misclassification, employers flout these rights and duties, stealing from both workers and the
`
`public.
`
`2.
`Misclassification denies workers basic employmentrights, such as minimum wage,
`overtime, and paid sick leave. Misclassification also subverts other legal requirements, such as by
`shifting to employees routine costs ofbusiness expenses like travel and work equipment.
`
`Employers who misclassify workers also harm the public by evading the
`3.
`employers’ duty to pay into government programs that are funded by payroll taxes, which are
`calculated asa percentage ofwages paid by employers to employees.In addition to federal Social
`
`Security and Medicaretaxes, these payroll taxes includethe District’s paid family leave tax, which
`
`provides workers with paid leave to allow them to care for newborn children oraserious health
`
`condition. Another similar program is the District’s workers’ compensation system, which requires
`
`employers to purchase no-fault insurance to compensate employees for workplace injuries.
`
`Employers evade paying these payroll taxes on misclassified workers altogether, shorting the
`public fisc and obtaining an illegal laborcost advantage over their law-abiding competitors.
`
`Shipt is a gig economy company that provides consumers with shopping and
`4,
`delivery services, with a focus on groceries and household merchandise. Like many other gig
`
`companies, Shipt is dependent on maintaining a workforce of delivery workers whocan bereadily
`
`dispatched to handle customerorders.
`
`5.
`
`Shipt refers to its delivery drivers as “shoppers.”It employs hundreds of shoppers
`
`in the District and hundreds of thousands more nationwide.
`6.
`Shipt shoppers bearall the hallmarks of employeestatus. Shipt has the power to
`
`hire and fire shoppers, unilaterally determines their rate and method of payment, and supervises
`
`and controls them with detailed shopping and delivery instructions, as well as a battery of
`
`

`

`performance metrics. Moreover, shoppers do the work that is at the very heart of Shipt’s
`
`business—without shoppers, Shipt could not provide the shopping and delivery servicesit sells to
`
`its customers.
`
`7.
`
`However, Shipt has chosen to misclassify its entire shopper workforce as
`
`independent contractors. Through this unlawful scheme, Shipt reducesits labor costs by evading
`basic employment requirements for its core workers. Through misclassification, Shipt denies
`shopperstheir rights to minimum wage, overtime pay, and paid sick leave. And Shipt evadesits
`
`obligations to pay whatit owes to District programs, including paid family leave and workers’
`
`compensation.
`
`8.
`The District brings this action to enjoin Shipt’s unlawful misclassification ofits
`workers. The District seeks to recover all unpaid wages and paid sick leave to which District
`
`shoppers are entitled, to compel Shiptto fulfill its obligation to the District’s public programs, and
`
`to recoup damagesand penalties for Shipt’s unlawful conduct.
`JURISDICTION
`
`9,
`The Court hasjurisdiction over the subject matter ofthis case pursuant to D.C. Code
`§ 11-921 and D.C. Code § 32-1306(a)(2).
`
`10.
`
`This Court has personaljurisdiction over Shipt pursuant to D.C. Code § 13-423(a).
`
`PARTIES
`
`11.
`
`Plaintiff District of Columbia, a municipal corporation empowered to sue and be
`
`sued, is the local governmentfor theterritory constituting the seat of the federal government. The
`District brings this action through its chief legal officer, the Attorney General for the District of
`Columbia. The Attorney General has general charge and conductof all legal business of the
`t
`
`

`

`District and all suits initiated by and against the District and is responsible for upholdingthe public
`interest. D.C. Code § 1-301.81(a)(1).
`|
`
`12.
`
`Defendant Shipt, Inc. is an Alabama corporation that provides consumers with
`
`shopping and delivery services and employs numerous shoppers who perform work in the District
`
`of Columbia. Shipt, Inc. is a wholly owned subsidiary of Target Corporation, a publicly traded
`
`Minnesota corporation that owns and operatesretail stores nationwide, including inthe District of
`Columbia.
`|
`
`FACTUAL ALLEGATIONS_
`
`A. Shipt’s Business in the District of Columbia
`
`13.
`
` Shipt’s business is providing shopping and delivery services, via its shoppers, to —
`
`consumers. Shipt advertises that customerscan “order groceries, everyday essentials, and so much
`_more from your favorite stores — delivered the same day byfriendly shoppers whocare about
`getting things just righ .
`
`14.
`
`Customersuse the Shipt mobile app or website to select items, place orders, pay for
`
`orders, and leave tips. Shipt sets the prices for products that customers purchase through its
`
`website, which may vary from in-store prices, and provides an estimated delivery window and
`
`delivery updates to customers. Customers pay Shipt directly.
`
`L
`
`15.
`In order to provide shopping and delivery services, Shipt recruits shoppers with
`advertisements like “Ib}e your ownboss,” and “[s]et your own hours for a completely flexible
`schedule.” In order to becomea shopper, prospective shoppers must meet certain requirements,
`
`complete an online application, engage in an interview conducted by Shipt staff, and pass a
`
`background check.
`
`

`

`16.
`
`Oncehired, shoppers use the Shipt app to sign up for time windows—shifts—in
`
`which they will be available to accept orders. Although shoppers are nominally permitted to use
`
`the Shipt app at any time, Shipt offers delivery orders first to those shoppers who previously signed
`
`up to accept orders during that shift, and shoppers who havenotsigned up in advance are unlikely
`to obtain workin that window.
`
`17.
`Shipt offers delivery orders to shoppers through the Shipt app. When Shiptoffers a
`delivery order to shoppers, it presents only a potential range ofearnings, and shoppers do not know
`the exact earnings that they will be paid for a particular order before accepting.
`18.
`Once a shopper accepts an order, Shipt requires them to complete the order within
`a set time frame. Shipt instructs the shopper where to shop, which products to purchase, and where
`
`to deliver the products to Shipt’s customer.
`
`19.
`
` Shipt has negotiated arrangements with some brick-and-mortar retailers where
`
`some orders are “delivery-only” and the retailer collects and packages the goods for the order, |
`processing the paymentdirectly from Shipt. For these orders, Shipt directs shoppersto retrieve the
`
`pre-packaged orders from the retailer and deliver them to the customer’s address. In these
`instances, shoppers are simply Shipt’s delivery people.
`
`20.
`
`Shipt uses an algorithm to determine the rate of pay for completing an order, and
`
`there is no mechanism in the Shipt app for shoppers to negotiatedifferent rates. Shipt’s app is
`
`programmedso that shoppers donot learn what Shipt has paid them for a delivery or whetherthe
`customer has paid a tip until after an orderis delivered to the customer. Shipt pays shoppers via
`direct deposit once a week based ontheir total deliveries. If shoppers want to receive their pay
`
`‘sooner, Shipt requires them to pay an additional fee.
`
`

`

`21.
`
`‘In recent years, Shipt employed hundreds of shoppers to deliver orders in the
`
`District.
`
`B. Shipt’s Business Model Relies on Misclassifying Shoppers as
`Contractors.
`
`Independent
`
`Through misclassification, Shipt reducesits labor costs by..denying workers the
`22.
`rights to which they would otherwise be entitled as employees under Districtlaw, such as minimum
`wage (currently $16.10/hour) for all compensable work time, overtime pay ofat least 1.5 times
`
`their regular rate for hours worked over 40 hours in any workweek, and paid sick leave. See D.C.
`
`Code §§ 32-1003(a)(6) (minimum wage), 32-1003(c) (overtime), 32-531.02 (paid sick leave).
`
`23.|The economic reality of Shipt’s relationship with its shoppers demonstrates the
`
`existence of an employer-employeerelationship. Shipt has the powerto hire and fire shoppers,
`
`exercises extensive supervision and control over their conditions of employment, and unilaterally —
`
`determines their rate of pay. Shoppersare also trained and monitored by Shipt, are economically
`
`dependent on Shipt, and performwork that is integral to Shipt’s business.
`
`i,
`
`Power to Hire and Fire.
`
`24.
` Shipt has the powerto hire and fire workers. To perform work for Shipt, a shopper
`must meet Shipt’s hiring requirements,including undergoing a.video interview, passing a criminal
`
`background check, and passing a motor vehicle report check.
`
`25.
` Athiring, Shipt requires shoppers to sign whatit styles an Independent Contractor
`Agreement (“the Agreement”), drafted by Shipt. In the Agreement, Shipt maintainsa longlist of
`
`“standards of service,” and a shopper’s failure to meet any service standard is grounds for
`
`suspension or “deactivation,” Shipt’s term for termination. That is, Shipt retains the power to
`supervise shoppers’work measuredagainst specific standards and to discipline and fire thembased
`
`on their performance.
`
`

`

`26.|Under the Agreement, Shipt can suspend or terminate a shopper for failing to
`
`maintain a high enough customerrating; failing to maintain an on-time percentage of 90% or more
`for orders; failingto follow store policies or directives; claiming too many orders and failing to
`complete them within the requested delivery window,including orders that offer late forgiveness;
`
`repeatedly delivering wrong, missing, or damaged items on orders; inaccurately entering item
`
`:
`information into the Shipt app, including incorrect substitutions; and more.
`27.
` Shipt’s policies explain thatit “is grounds fordeactivation” for a shopperto fail to
`follow specific guidelines dictated by Shipt, such asfailure to “contact customers orstart shopping
`
`within 30 minutes into the requested delivery window.”
`
`ii.
`
`Control and Supervision.
`
` Shipt controls shoppers through the way it assigns orders in its mobile app. The
`28.
`only way for shoppers to perform any work for Shipt is through the Shipt app, which shoppers can
`
`only use as determined by Shipt.
`
`29.
`
` Shipt prioritizes offering delivery orders to those shoppers who have signed up in
`
`advance to make themselves available for a particular shift, and shoppers who have not signed up
`
`for a particular shift are unlikely to be able to obtain work during that window.
`30.
`Shipt gives shoppers 60 secondsto accept an order,orit will be offered to another
`
`shopper. Shipt monitors when shoppers decline to take an order and can penalize them for doing
`
`sO.
`
`31.
`
`Through its app, Shipt also controls what information shoppers receive about their
`
`orders, and when. For example, Shipt initially provides shoppers only with an earnings range,
`informing them oftheir exact earnings only after they complete a job.
`
`,
`
`

`

`32.
`
`Similarly, Shipt does not
`
`inform shoppers about customer information like
`
`addresses until after they have accepted the job, which prevents shoppers from maximizing
`efficiencies, for instance by deciding to accept orders near the delivery address of the previous
`
`orders.It also denies shoppers the opportunity to make their own determinations about wherethey
`
`feel safe making deliveries, includinglate at night.
`33.
`Shipt also controls how shoppers interact with customers in other ways. Shipt
`providesinstructions on what shoppers should say to customers in text messages, phonecalls, and
`voicemails at various stages of theorder, including when commencing an order, when making
`substitutions, and when delivering items. Shipt even provides shoppers with template text
`messages to send at each stage of delivery.
`34, Shipt’s control over workers extendsinto their personal lives. Shipt retainstheright
`
`to subject shoppersto periodic drug testing and to conduct additional background checks.
`
`35.
`
` Shipt provides shoppers with t-shirts branded with the Shipt name and logo to
`
`increase Shipt’s brand recognition among the customers and among employeesof theretail stores
`where shoppers shop. Shipt’s website features photographs of shoppers wearing Shipt t-shirts
`
`while shopping in stores or delivering items in Shipt-branded bags to customers.
`
`
`36.|Shipt tracks shoppers’ order acceptance rate and offers more shopping
`
`opportunities to shoppers with higher acceptance rates, penalizing shoppers for being selective
`
`about which jobs to accept.
`37.
`Shiptcontrols shoppers’ day-to-day work by establishing mandatory performance
`standards, monitoring shoppers’ compliance with those standards,and disciplining them when they
`
`fail to meet the standards.
`
`

`

`38.
`
` Shipt surveils ‘shoppers and exercises pervasive control over shoppers’ work.
`
`Through its app, Shipt monitors shopper location and speed so that Shipt can determine when
`shoppers have deviated from Shipt protocols on timeliness. The Shipt app also compiles detailed
`metrics about on-the-job performance,including, for example, the timeliness ofshopper deliveries.
`39.
`Shipt often requests minute-by-minute updates from shoppers throughout the
`shopping and delivery process and communicates instructions directly to them via text messages
`
`_and phonecalls. Through the Shipt app, shoppers are required to notify Shipt when they start to
`
`shop for an order, complete a purchase, start the delivery process, and complete a delivery.
`40.—Shipt also uses customer ratings to monitor shopper performance. Shipt prompts its
`
`customers to rate shoppers on a scale of one to five stars. Shipt uses these customer ratings to
`
`discipline shoppers. Shoppers are subject to suspension or termination whenevertheir customer
`rating falls below the minimum required rating of4.7 out of 5.
`41.|Whenever a shopper falls below any of Shipt’s shopper performance benchmarks,
`
`Shipt can discipline the worker either by deactivating them or by suspending them from the app
`
`and requiring them to complete a “refresher” course within seven days. Whether a shopperis fired
`
`or required totake a refresher course is at Shipt’s discretion.
`
`Shipt maintains detailed records pertaining to shoppers,
`42.
`history, performance history, wage history, and more.
`
`including their order
`
`iii.
`Economic Dependence
`43. While a true independent contractor often brings a specialized ‘skill
`
`to the
`
`contracting relationship, Shipt does not require shoppers to have prior experienceortrainingatall,
`
`and instead suppliesits shoppers with the necessary training.
`
`

`

`44.—Shipt provides shoppers with a training course that includes detailed instructions
`
`for how to complete deliveries and how to communicate with Shipt customers abouttheir orders.
`
`Though Shipt asserts that this training course is optional, the course contains information about
`
`how to comply with metrics that Shipt uses to determine shoppers’ performanceratings, which in
`turn determine the priority Shipt uses to assign orders to the worker and whether Shipt will
`discipline the worker. Thatis, the training is effectively required for success on the platform.
`
`45.
` Shipt also provides online training and support material for shoppers. Thistraining
`directs shoppers onhow to perform every aspectofthejob, including, for example, how to evaluate
`
`and select produce and how to bagitems. These training materials dictate how shoppers are
`required to perform theirwork. For example, throughits training materials Shipt instructs shoppers
`that if an item is unavailable the shoppers are to choose specific replacement items, using Shipt
`
`criteria to determine how to match product quantity/volume and quality.
`
`46.
` Shipt controls all aspectsofits relationship with the customers whoplace orders on
`its app and website.
`47,
`Shipt strictly controls what products customers can purchase through their website,
`and shoppers may not shop for or deliver any products except those purchased through Shipt.
`Because Shipt prohibits the sale of items like gift cards or movie tickets through its app and
`website, shoppers are prohibited from shopping for those items or delivering them to customers.
`48.
`Shipt unilaterally sets prices for the products that customers can order through the
`- Shipt mobile app and website. Because ofthis, Shipt prohibits shoppersfrom telling customers the
`in-store price of a product. Shipt further requires shoppers to submit a photographofthe front of
`
`each receipt collected while completing an order, and explicitly prohibits shoppers from providing
`
`‘either the receipt or a photograph ofthe receipt to a customer.
`
`10
`
`

`

`49.
`
`Shoppers are economically dependent on Shipt and lack individual opportunity for
`
`profit andloss. Shipt determines how manyordersare available and the earnings opportunity for
`
`each. Shipt does not allow shoppersto identify preferred customers for repeat service, and Shipt
`
`likewise does not allow customersto directly select their shopper for a given order.
`
`50.
`
` Shipt prohibits shoppers from recruiting other individuals to help them complete
`
`delivery ordersor allowing anyoneelseto use their Shipt app to accept or complete orders on their
`
`behalf. Shipt dictates to shoppers that “Shipt Shopping is a solo enterprise. Shipt Shoppers may
`not bring anyone with them,including another approved Shipt Shopper.” Shoppers whoviolate
`this policy may be, suspended orterminated.
`|
`51.
`Put simply, shoppers are Shipt’s business. Shipt
`is a shopping and delivery
`
`company and without shoppers, there would be no Shipt.
`C. Shipt’s Violations of District Wage-and-Hour Law
`
`52.
`
`Through worker misclassification, Shipt systemically fails to pay District shoppers
`
`wages to which theyare entitled as employees under the District’s wage-and-hourlaws.
`53.
`Critically, Shipt repeatedly pays District shoppers hourly wagesthat fall short of
`
`the required minimum wage, which is presently $16.20/hour.
`54.
`Shipt also fails to pay shoppers forall compensable work time, which further
`
`depresses shoppers’ actual hourly wages. For example, Shipt does not pay shoppers for the
`‘ compensable time they spend completing training or time when they are engagedto wait for orders
`| through the Shipt app.
`|
`55.
`Shipt does not pay overtimerates for shoppers when they work hoursin excess of
`40 hours per week.
`
`11°
`
`

`

`56.|Shipt does not pay shoppers one additional hour atthe minimum wage whenever
`shoppers work.a split shift.
`|
`57.
` Shipt does not pay shoppers a Minimum Daily Wageofat least four hours ofwork
`
`whenever shoppers are regularlyscheduled for four or more hours of work aday and report to
`
`work, but are given less than four hours of work.
`
`58.
`
`59.
`
`compensation.
`60.
`
`Shipt does not provide shoppers with any paid sick or safe leave.
`
`Shipt also shifts expenses related to its business onto District workers without
`
`For instance, Shipt does not pay for shoppers’ travel expenses, such astheprice of
`
`gas, incurred in performing deliveries for Shipt.
`61.
`Shipt also doesnot pay for tools used by shoppers that are necessary to performing
`deliveries for Shipt, such as a vehicle, auto insurance, a smartphone, and broadband services.
`
`D. Shipt’sNoncompliance with Public Benefits Program Requirements
`
`62.
`The District maintains multiple public benefits programs that are funded by
`employer contributions.
`|
`63.
`The District’s Universal Paid Family Leave program (“PFL”) is governed by the |
`
`UPLA and provides monetary benefits to workers who take leave to care for a newborn, other
`family member, or their own serious medical condition. PFL benefits are also funded by employer
`
`contributions paid on a quarterly basis andlikewisecalculated as a percentage of the wages paid
`
`by the employerto its employees.
`
`64.
`
`Shipt does not pay UPLA contributions as to wages paid to shoppers.
`
`12
`
`

`

`65.
`In addition, the WCAestablishes the District’s workers* compensation program.
`Workers’ compensation is a form of no-fault insurance, where workers are assured financial
`compensation for injuries suffered on the job.
`|
`
`66.|Workers’ compensation programs, which today are the norm acrossall 50states,
`
`emerged in the late 19th century and are frequently referred to as a “grand bargain” between
`
`employers and émployees. This bargain reflected a system where workers gave up their right to
`
`sue their employers in court for personal injury and, in exchange, received morecertain (but less
`generous) financial compensation for workplace injuries.
`
`67.
`
`Delivery work is dangerous. Shipt requires its shoppers to navigate.busy urban:
`
`environments while under stringent time constraints, and as a result, accidents and injuries are
`common. A recent report issued by the United States Bureau ofLabor Statistics concluded that gig
`workers “face unique challenges in terms of workplace safety” and are “potentially [are] put[] at
`
`greaterrisk for poorer workplace safety and health outcomes.”
`
`68.|The WCA requires employers to secure the payment of workers’ compensation,
`
`which can be done by purchasing a workers’ compensation insurance policy that administers
`workers’ compensation claims.
`
`69,
`Shipt does not maintain workers’ compensation insurance coverage as to its
`shoppersand fails to provide them with workers’ compensation for injuries suffered on the job.
`
`COUNTI: FAILURE TO PAY MINIMUM WAGE
`VIOLATION OF THE MINIMUM WAGEREVISION ACT
`
`70.
`
`The District re-alleges the foregoing paragraphs of this Complaint as if fully set
`
`forth herein.
`
`71.
`
`The MWRA requires employers to pay employees a set minimum wage, whichis
`
`presently $16.10/hour and increases on an annual basis. D.C. Code § 32-1003(a).
`
`13
`
`

`

`72.
`
` Shipt is an “employer” that employed its shoppers as “employees” as defined by
`
`the MWRA.D.C. Code § 32-1002(1A),(2), (3).
`73.
`Shipt violated and continues to violate the MWRA by failing to pay shoppers
`minimum wageforall hours worked. Shoppers were and continue to be paid sub-minimum hourly
`
`wages, which are further depressed after factoring in unpaid time spenttraining and being engaged
`
`to wait for Shipt’s benefit.
`
`74.|Employers are required to pay workers one additional hour at the minimum wage
`
`whenevera worker worksa split shift, a schedule of daily hours in which thé hours workedare not
`
`consecutive. Violations of 7 DCMR §§ 906.1, 999. Violations of these regulations are violations
`
`of the MWRA pursuant to D.C. Code § 32-1010(a)(1).
`
`75.
`
` Shipt has violated and continues to violate the MWRA byfailing to pay shoppers
`
`one additional hour at the minimum wage whenever shoppers worka split shift.
`
`76.
`
`Employers are required to pay employees for at least four hours of work when
`
`employees are regularly scheduled for four or more hours of work a day and report to work, but
`are given less than four hours of work. 7 DCMR § 907.1. Violations of 7 DCMR § 907.1 are
`
`violations of the MWRA pursuant to D.C. Code § 32-1010(a)(1).
`
`77.
`
` Shipt violated and continues to violate the MWRA byfailing to pay shoppers a
`
`Minimum Daily Wageofat least fourhours ofwork whenever employees are regularly scheduled
`for four or more hours ofwork a day and report to work, but are given less than four hours ofwork.
`
`COUNTII: FAILURE TO PAY OVERTIME
`VIOLATION OF THE MINIMUM WAGEREVISION ACT
`
`78.
`
`The District re-alleges the foregoing paragraphs of this Complaint as if fully set
`
`forth herein.
`
`14
`
`

`

`79.
`
`The MWRA requires employers to pay employees overtime wage rates ofatleast
`
`1.5 times the employee’s regular rate for hours worked in excess of 40 hours per week. D.C. Code
`
`§ 32-1003(c).
`
` Shipt is an “employer” that employsits shoppers as “employees”as defined by the
`80.
`MWRA.D.C. Code § 32-1002(1A), (2), (3).
`|
`81.
` Shipt violated and continues to violate the MWRAby failing to pay overtimerates —
`
`to shoppers who worked hours in excess of 40 hours per week in violation of the MWRA.
`
`COUNT II: FAILURE TO PROVIDE PAID SICK LEAVE
`VIOLATION OF THE SICK AND SAFE LEAVE ACT
`
`82.
`
`The District re-alleges the foregoing paragraphs of this Complaint as if fully set
`
`forth herein.
`
`83.
`
`The SSLA requires employers to provide employees with paid sick leave, which is
`
`accrued based upon hours workedat a rate that depends on the employer’s total number of
`
`employees. D.C. Code § 32-531.02.
`
`84.
` Shipt is an “employer” that employsits shoppers as “employees”as defined by the —
`SSLA.D.C. Code § 32-531.01(2)-(3).
`|
`
`85.
`
` Shipt violated and continues to violate the SSLA by failing to provide shoppers
`
`with any accrued paid sick leave.
`
`COUNTIV: FAILURE TO PAY WAGESDUE
`‘VIOLATION OF THE WAGE PAYMENT AND COLLECTION LAW
`
`86.
`
`The District re-alleges the foregoing paragraphs of this Complaint as if fully set
`
`forth herein.
`
`87.
`
`The WPCL requires that employers “shall pay all wages earned to his or her
`
`- employees on regular paydays.” D.C. Code § 32-1302.
`
`15
`
`

`

`88.
` Shipt is an “employer” that employsits shoppers as “employees” as defined by the
`WPCL.D.C. Code § 32-1301(1B)-(2).
`|
`89.
` Shipt violated and continues to violate the WPCL by failing to pay shoppers
`
`minimum,wage, overtime, and paid sick leave required by District law.
`90.
`Shipt also violated and continues to violate the WPCL by failing to pay shoppers
`
`for business expenses that were to Shipt’s benefit and were borne by shoppers, including travel
`expenses (such as gas and auto insurance) and tool expenses (such as smartphones and broadband
`services).
`|
`
`91.
`
`Minimum wage, overtime, paid sick leave, and business expenses are “wages” as
`
`defined by the WPCLbecausethey are “remuneration promised or owed .
`
`.
`
`. [p]ursuant to District
`
`or federal law.” D.C. Code § 32-1301(3)(E)(iii).
`92.
`7DCMR § 909.1 requires that an “employer shall pay the cost of travel expenses
`incurred by the employee in performanceofthe business of the employer.”
`93.
`7DCMR§ 910.1 requires that an “employer shall pay the cost of purchasing and
`
`maintaining any tools required of the employee in the performance of the business of the
`
`employer.”
`
`COUNTV: FAILURE TO PAY UNIVERSAL PAID LEAVE TAXES
`VIOLATION OF THE UNIVERSAL PAID LEAVE ACT
`
`94.
`
`The District re-alleges the foregoing paragraphs of this Complaintasif fully set
`
`forth herein.
`
`95.
`Shipt’s payments to shoppers are “wages”as defined by the UPLA. D.C. Code
`§ 32-541.01(22).
`|
`
`96.
`
` Shipt is a “covered employer” that employs its shoppers as “covered employees”
`
`as defined by the UPLA. D.C. Code § 32-541.01(3)-(4).
`
`16
`
`

`

`97.
`
`The UPLA requires covered employers to pay a tax, calculated as a percentage of
`
`wages paid to its covered employees, to fund paid leave. D.C. Code § 32-541.03(a).
`98.
`Shipt violated and continuesto violate the UPLAby failing to pay UPLAtaxes on .
`
`wagespaid to its shoppers.
`
`COUNTVI: FAILURE TO SECURE WORKERS’ COMPENSATION COVERAGE
`VIOLATION OF THE WORKERS’ COMPENSATION ACT
`
`99.
`
`The District re-alleges the foregoing paragraphs of this Complaint asif fully set
`
`forth herein.
`
`100.
`
`The WCArequires that employers shall “secure the payment of [workers’]
`
`compensation” by either purchasing workers’ compensation insurance through an insurance
`carrier or furnishing to the Mayor the employer’s financial ability to pay workers’ compensation
`
`directly. D.C. Code § 32-1534(a).
`|
`101.
`Shipt is an “employer” that employs its shoppers as “employees” as defined by
`
`the WCA. D.C. Code § 32-1501(9)-(10).
`102.
`Shipt has violated the WCAbyfailing to secure the payment ofworkers’
`
`compensation in compliance with D.C. Code § 32-1534(a).
`
`103.
`
`The WCAalso requiresthat: “In the case of an employer whois a subcontractor,
`
`the contractorshall be liable for and shall secure the payment of such [workers’] compensation
`to employees ofthe subcontractor unless the subcontractor has secured such payment.” D.C.
`
`Code § 32-1534(c).
`
`104.
`
`Thus, in the alternative, even if Shipt shoppers were properlyclassified as
`
`independentcontractors, Shipt wouldstill be in violation of the WCA becauseit never secured
`
`for them the paymentof workers’ compensation.
`
`17
`
`

`

`PRAYER FOR RELIEF
`
`WHEREFORE,Plaintiff District of Columbia respectfully requests:
`
`a. A declaratory judgment that Defendant Shipt’s worker misclassification scheme as
`alleged herein is unlawful and that Defendant Shipt’s shoppers are its employees as
`defined by the MWRA, SSLA, WPCL, UPLA, and WCA;
`
`b. An injunction enjoining Defendant Shipt from continuing the worker misclassification
`schemedescribed herein;
`c. An award of damages and liquidated damages against Defendant Shipt for failing to
`pay minimum wage, overtime pay, and for failing to reimburse for business expenses
`to shoppersin violation of the MWRA and WPCL,in an amountto be provenattrial;
`
`d. An award of compensatory and punitive damages against Defendant Shipt for failing
`‘to provide accrued paid sick leave to shoppersin violation of the SSLA, in an amount
`to be provenattrial;
`
`e. Statutory penalties against Defendant Shipt for each violation of the MWRA, SSLA,
`and WPCL in an amountto be provenattrial;
`
`f.. An award of back taxes, interest, and penalties against Defendant Shipt owed pursuant
`to the UPLA.
`
`g. An award ofcivil penalties against Defendant Shipt for each violation ofthe WCA and
`an injunction requiring Defendant Shipt
`to secure the payment of workers’
`compensation in compliance with the WCA;
`
`h. An award of costs and reasonable attorneys’ fees; and
`
`i.
`
`Such other furtherrelief as this Court deems just and proper.
`
`JURY DEMAND
`
`The District demandsa trial by jury onall issues triable as of right by a jury in this action.
`
`Respectfully submitted,
`
`Dated: October 24, 2022
`.
`
`KARL A. RACINE
`Attorney General for the District of Columbia
`
`KATHLEEN KONOPKA
`Deputy Attorney General
`Public Advocacy Division
`
`18
`
`

`

`.
`/s/ James Graham Lake
`JAMES GRAHAM LAKE,D.C.Bar #1028853
`Chief, Workers’ Rights and Antifraud Section
`Public Advocacy Division
`
`/s/ Sarah M. Levine
`SARAH M.LEVINE,New Jersey Bar #3530620202!
`RANDOLPHT. CHEN,D.C. Bar #1032644
`CHARLESA.SINKS, D.C. Bar #888273315
`Assistant Attorneys General
`Public Advocacy Division
`Office of the Attorney General
`400 6th Street N.W.
`Washington, D.C. 20001
`Phone: (202) 707-0559
`Email: sarah.levine@dc.gov
`
`Attorneys for the District ofColumbia
`
`1 Admitted to practice only in New Jersey. Practicing in the District of Columbia under the direct
`supervision of James Graham Lake, a memberof the D.C. Bar, pursuant to D.C. Court of
`Appeals Rule 49(c)(4).
`
`19
`
`

`

`
`
`Superior Court of the District of Columbia
`CIVIL DIVISION
`.
`Civil Actions Branch
`500 Indiana Avenue, N.W., Suite 5000 Washington, D.C. 20001
`Telephone: (202) 879-1133 Website: www.dccourts.gov
`'
`
`District of Columbia, a municipal corporation,
`
`400 Sixth StreetNW
`
`Washington, DC 20001
`
`vs.
`
`Plaintiff
`
`9922 & 909
`
`Case Number
`
`17 20th Street N, Suite 100
`Birmingham, AL 35203
`
`To the above named Defendant:
`
`Defendant
`
`SUMMONS
`
`You are hereby summoned and required to serve an Answer to the attached Complaint, either
`personally or through an attorney, within twenty one (21) days after service of this summons upon you,
`exclusive of the day of service. If you are being sued as an officer or agency of the United States Government
`or the District of Columbia Government, you have sixty (60) days after service of this summonsto serve your
`Answer. A copy of the Answer must be mailed to the attorney for the plaintiff who is suing you. The
`attorney’s nameandaddress appear below.If plaintiff has no attorney, a copy of the Answer must be mailed
`to the plaintiff at the addressstated on this Summons.
`
`Youare also requiredto file the original Answer with the Court in Suite 5000 at 500 Indiana Avenue,
`N.W., between 8:30 a.m. and 5

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