STATE OF MINNESOTA DISTRICT COURT

COUNTY OF HENNEPIN FOURTH JUDICIAL DISTRICT

Case Type: Employment

State of Minnesota by its Attorney General, Court File No. ___________

Keith Ellison,

Plaintiff,
CIVIL SUMMONS
vs.

Shipt, Inc.,

Defendant.

THIS SUMMONS IS DIRECTED TO: Shipt, Inc., 1010 Dale St. N, Saint Paul, Minnesota 55117-
5603.

1. You are being sued. The Plaintiff has started a lawsuit against you. The Complaint is
attached to this summons. Do not throw these papers away. They are official papers that affect
your legal rights, even if nothing has been filed with the Court and there is no court file number
on this Summons.

2. You must BOTH reply, in writing, AND get a copy of your reply to the
person/business who is suing you within 21 days to protect your rights. Your reply is called
an Answer. Getting your reply to the Plaintiff is called service. You must serve a copy of your
Answer or Answer and Counterclaim (Answer) within 21 days from the date you received the
Summons and Complaint.

ANSWER: You can find the Answer form and instructions on the Minnesota Judicial
Branch website at www.mncourts.gov/forms under the “Civil” category. The instructions will
explain in detail how to fill out the Answer form.

3. You must respond to each claim. The Answer is your written response to the Plaintiff’s
Complaint. In your Answer you must state whether you agree or disagree with each paragraph of
the Complaint. If you believe the Plaintiff should not be given everything asked for in the
Complaint, you must say that in your Answer.
4. SERVICE: You may lose your case if you do not send a written response to the
Plaintiff. If you do not serve a written Answer within 21 days, you may lose this case by default.
You will not get to tell your side of the story. If you choose not to respond, the Plaintiff may be
awarded everything they asked for in their Complaint. If you agree with the claims stated in the
Complaint, you don’t need to respond. A default judgment can then be entered against you for
what the Plaintiff asked for in the complaint.

To protect your rights, you must serve a copy of your Answer on the person who signed
this Summons in person or by mail at this address: 445 Minnesota Street, Suite 1200, St. Paul,
Minnesota 55101.

5. Carefully read the Instructions (CIV301) for the Answer for your next steps.

6. Legal Assistance. You may wish to get legal help from an attorney. If you do not have
an attorney and would like legal help:

• Visit www.mncourts.gov/selfhelp and click on the “Legal Advice Clinics” tab to get more
information about legal clinics in each Minnesota county.

• Court Administration may have more information about places where you can get legal
assistance.

NOTE: Even if you cannot get legal help, you must still provide a written Answer to protect
your rights or you may lose the case.

7. Alternative Dispute Resolution (ADR). The parties may agree to or be ordered to

participate in an ADR process under Rule 114 of the Minnesota General Rules of Practice. You
must still serve your written Answer, even if you expect to use ADR.

2
Dated: October 27, 2022 Respectfully submitted,

KEITH ELLISON
Attorney General

JAMES W. CANADAY
Deputy Attorney General
State of Minnesota

/s/ Jonathan D. Moler

JONATHAN D. MOLER (#0396621)
Assistant Attorney General

ERIC J. MALONEY (#0396326)

Assistant Attorney General

JASON PLEGGENKUHLE (#0391772)

Assistant Attorney General

445 Minnesota Street, Suite 1200

St. Paul, MN 55101-2130
(651) 724-9951
(651) 757-1021
(651) 757-1147
jonathan.moler@ag.state.mn.us
eric.maloney@ag.state.mn.us
jason.pleggenkuhle@ag.state.mn.us

Attorneys for Plaintiff, State of Minnesota

3
STATE OF MINNESOTA DISTRICT COURT

COUNTY OF HENNEPIN FOURTH JUDICIAL DISTRICT

Case Type: Employment

State of Minnesota by its Attorney General, Court File No. ___________

Keith Ellison ,

Plaintiff,
COMPLAINT
vs.

Shipt, Inc.

Defendant.

INTRODUCTION

The State of Minnesota, by its Attorney General, Keith Ellison (the “State”), for its

Complaint against Defendant Shipt, Inc. (“Shipt”), alleges as follows:

1. Shipt is a wholly owned subsidiary of Target Corporation (“Target”) that provides

same-day delivery of groceries and household goods to consumers that are ordered and arranged

through the company’s online platform. Since its inception, Shipt has willfully based its business

model on misclassifying its same-day delivery workers—who it refers to as “Shoppers”—as

independent contractors. In doing so, Shipt has exploited thousands of Minnesotan low-wage

workers and violated numerous Minnesota laws.

2. Shipt’s business would be impossible without its Shoppers. Target describes

Shipt’s business function as “delivery via our wholly owned subsidiary.” 1 However, like many

gig-economy companies, when the issue of employment is the topic, Shipt characterizes itself as

1
Target Securities and Exchange Comm’n Form 10-K Report, Item 1 (Mar. 9, 2022),
https://perma.cc/7K54-R6F5.
a “technology company that connects Shipt members through its online marketplace with a

network of independent contractors who select, purchase, and deliver groceries and household

essentials.” 2 This characterization is false, as Shipt does not create a virtual market connecting

Shoppers to customers and allowing them to do business with each other. Instead Shipt allows

customers to order goods from its corporate vendors through the Shipt App, marks up the goods

ordered, and then charges customers with either a delivery fee, a membership fee, or both.

3. That Shipt is a delivery business and not simply a technology platform is evident

from how it advertises its services to customers. Shipt does not tout the ease with which customers

can interact with and choose the Shopper who best meets the customer’s delivery needs, because

Shoppers have virtually no say as to which Shipt customers they work for. Instead, Shipt’s

advertisements and description of its services is intrinsically linked to its control over its Shopper

workforce and the service that it provides to customers: the convenient purchasing and delivery of

goods to the customer’s home.

2
Target Securities and Exchange Comm’n Form 10-K Report, Item 1A (Mar. 9, 2022),
https://perma.cc/52S3-JF3T.

2
 4. Shipt explains that its markups on customer goods are necessary to “help cover the

costs of picking, packing, and processing.” 3 Without the work of the Shoppers, however, no goods

would be picked, packed, and processed, no orders would be delivered, and thus no goods would

be bought and no profit made by Shipt. Without Shoppers, Shipt would serve no purpose. This

fact is highlighted by the fact that Shipt’s Shoppers—not its technology platform—make up the

center of its advertising campaigns.

5. In addition to its reliance on Shoppers to do the work it advertises to its customers,

Shipt exercises virtually total control over Shoppers while they do their work. It determines who

is eligible to be a Shopper. It monitors how Shoppers perform each shop. It sets the price for

goods ordered through its service, allowing no room for Shoppers to profit because of how they

perform the work or their business acumen. It controls customer access to Shoppers, and vice-

versa, even limiting how Shoppers and customers can communicate with each other by providing

masked numbers that make it difficult for Shoppers to form durable relationships with customers

on anything but Shipt’s terms. It engages in extensive data collection on its Shoppers’ work,

including how customers rate Shoppers, how often Shoppers accept the orders it offers, and how

often Shoppers deliver within the timeframe Shipt prescribes.

6. By misclassifying Shoppers as independent contractors, Shipt artificially lowers its

operating costs by evading federal, Minnesota, and local laws establishing workplace protections

that safeguard the wellbeing of employees in this state. These protections—such as minimum

wages, overtime premiums, workers’ compensation coverage, occupational safety and health laws,

3
Shipt, How are your prices determined, https://help.shipt.com/pricing/how-are-your-prices-
determined.

3
paid sick and safe time, and unemployment insurance—all depend on Shipt properly classifying

its workers as employees under the law. Shipt has willfully refused to do so.

7. Shipt is a traditional employer of its misclassified Shoppers. It hires and fires them,

controls what assignments are offered to them, sets Shopper quality standards, monitors Shoppers

for compliance with those standards, disciplines (or deactivates) Shoppers for not meeting those

standards, and prohibits Shoppers from running their own independent business by preventing

them from hiring assistants, personally advertising their service, or letting their customers select

the Shoppers of their choice.

8. Shipt has used its worker misclassification scheme to both take advantage of low

wage workers who need work because of the COVID-19 pandemic and capitalize on customers

who seek to utilize Shipt’s services to mitigate their personal risk from the pandemic. In fact,

because of its customers’ desire to avoid exposure to COVID-19, Shipt’s business exploded since

2020. In that time, Shipt tripled its Shopper workforce while its number of orders has increased

by close to 400%.

9. The State of Minnesota, by and through its Attorney General, Keith Ellison, brings

this enforcement action to stop Shipt’s unlawful misclassification of its workers and to remediate

the harm Shipt’s misclassification scheme has caused to its Shoppers.

PARTIES

10. Keith Ellison, the Attorney General of the State of Minnesota, is authorized under

Minnesota Statutes chapter 8, including sections 8.01 and 8.31; the Minnesota Fair Labor

Standards Act, section 177.45; and the Payment of Wages Act, section 181.1721, and has common

law authority, including parens patriae authority, to bring this action to enforce Minnesota’s laws,

4
to vindicate the State’s sovereign and quasi-sovereign interests, and to remediate all harm arising

out of—and provide full relief for—violations of Minnesota’s laws.

11. Defendant Shipt, Inc. is a foreign corporation, incorporated in the state of Delaware,

and is a wholly owned subsidiary of Target. Shipt is headquartered in Birmingham, Alabama, and

its registered office address in Minnesota is 1010 Dale Street N., Saint Paul, Minnesota 55117-

5603. Shipt lists its Chief Executive Officer as Kelly Caruso with the Minnesota Secretary of

State, but in February 2022, Shipt announced that Kamau Witherspoon would be its CEO effective

March 1, 2022. Shipt lists its Chief Executive Officer’s address as 1000 Nicollet Mall,

Minneapolis, Minnesota 55403—the principal executive office address for Target.

JURISDICTION AND VENUE

12. This Court has subject matter jurisdiction over this action pursuant to Minnesota

Statutes sections 8.01, 8.31, 177.45, 181.1721, and common law.

13. This Court has personal jurisdiction over this matter because, at all times relevant

to this Complaint, Shipt has transacted business within Minnesota by advertising, marketing, and

selling its same-day delivery services in Minnesota, has committed acts causing injury to its

workers located in Minnesota, and has otherwise purposefully availed itself of this forum.

14. Venue is proper in Hennepin County pursuant to Minnesota Statutes section 542.09

because some of the unlawful practices discussed herein occurred in Hennepin County.

FACTUAL ALLEGATIONS

I. EMPLOYEES ARE ENTITLED TO MANY PROTECTIONS THAT INDEPENDENT

CONTRACTORS ARE NOT.

15. In Minnesota—like in most states—many worker protections and benefits hinge on

the worker being classified as an employee by his or her employer. That is true of minimum wage

and overtime protections, employment discrimination protections, workers’ compensation

5
protections, unemployment insurance coverage, occupational safety and health protections, and

even tax benefits. In the cities of Minneapolis and St. Paul, employees are also entitled to sick and

safe time protections. Independent contractors are not entitled to any of these benefits. As such,

whether a worker is classified as an employee or an independent contractor is an important public

policy concern because accurate classification affects the legal rights and obligations of both

workers and employers.

16. Independent contractors were traditionally considered independent businesspeople

with specialized training or expertise who had a great deal of control over how they performed

their work. Such individuals generally have control over where they do their work, when they do

their work, and the ability to hire assistants and substitutes for their work without permission from

the person for whom the work is performed. The typical example of an independent contractor is

a handyman who does one-off jobs for property owners. Other traditional independent contractors

include doctors, dentists, photographers, and accountants.

17. The federal government has estimated that between 10 to 30% of employees are

misclassified as independent contractors nationwide. 4 This is in line with a 2007 report from

Minnesota’s Office of the Legislative Auditor (“OLA”), which estimated that more than 14% of

Minnesota’s employers misclassified workers. 5 The OLA believed this estimate was conservative.

Employers are incentivized to misclassify workers because “misclassifying employees as

4
Employee Misclassification: Improved Coordination, Outreach, and Targeting Could Better
Ensure Detection and Prevention at 11, United States Government Accountability Office (August
2009), available at https://perma.cc/7G5V-H8F6.
5
Misclassification of Employees as Independent Contractors at x, Office of the Legislative
Auditor, State of Minnesota (November 2007), available at https://perma.cc/Y869-SA2X.

6
independent contractors can significantly reduce an employer’s cost of doing business.” 6 For

example, the OLA estimated that an employee costs an employer an additional $7.82 per hour for

a worker making $30 per hour over an independent contractor making the same wage.

18. As the workplace has changed with the advent of remote work, smartphones, and

smartphone-based applications, employers have increasingly sought to evade their obligations as

employers by creating the fiction that their employees are independent contractors. This model

has been especially prevalent in the smartphone application-based “gig economy” populated by

companies such as Shipt, where almost all workers are classified as independent contractors.

19. While these companies—whose business model is founded on misclassifying

workers—reap the benefits of decreased workers’ compensation insurance, unemployment

insurance payments, payroll taxes, and minimum wage and overtime protections, their workers

suffer. Not only are the workers essentially at-will employees, but many are low-wage employees

who may live paycheck to paycheck. These workers operate at the whim of companies like Shipt,

who can cut them loose at no cost to the company while the worker becomes jobless without access

to traditional social safety net programs.

20. Shipt’s unfair and unlawful treatment of its Shoppers also confers an unfair

competitive advantage to itself and its parent, Target, over their law-abiding competitors and

would-be competitors. Shipt realizes illegitimate profits and savings from depriving its Shoppers

of the full compensation and benefits they would earn as employees. Target is well aware that

Shipt’s expenses would increase if it accurately classified its workers as employees:

Our expenses could increase and our operations could be adversely affected by law
changes or adverse judicial developments involving . . . the classification of
workers as either employees or independent contractors (particularly as it applies
to our Shipt subsidiary, a technology company that connects Shipt members

6
Id. at xi.

7
 through its online marketplace with a network of independent contractors who
select, purchase, and deliver groceries and household essentials ordered from
Target and other retailers). The classification of workers as employees or
independent contractors, in particular, is an area that is experiencing legal
challenges and legislative changes. If our Shipt subsidiary is required to treat its
independent contractor network as employees, it could result in higher
compensation and benefit costs. 7

II. SHIPT PROVIDES SAME-DAY DELIVERY SERVICES THAT EXPERIENCED RAPID GROWTH
DURING THE COVID-19 PANDEMIC.

21. Shipt is headquartered in Birmingham, Alabama and incorporated in Delaware. It

was acquired by Target in 2017 and now is a wholly owned subsidiary of Target. Shipt provides

same-day delivery of groceries and household goods to consumers that are ordered and arranged

through the company’s online platform.

22. Shipt’s business model consists of hiring individuals to shop and deliver goods to

its customers. It labels these individuals as “Shoppers” and has, since the inception of its business,

classified these Shoppers as independent contractors.

23. To work for Shipt, each Shopper must agree to a standard form contract and

addenda. Each Shipt contract contains standardized terms and conditions that Shipt sets regarding

Shopper work. Each Shipt contract and addenda also contains boilerplate language unilaterally

designating each Shopper as an independent contractor. Prospective Shoppers have no ability to

negotiate the terms of these form contracts; they must agree to be bound by them or forego working

for Shipt.

24. A Shopper’s basic work consists of traveling to a specific store designated by

Shipt—such as an individual Target store—collecting items that a Shipt customer has ordered

7
Target Securities and Exchange Comm’n Form 10-K Report, Item 1A (Mar. 9, 2022),
https://perma.cc/52S3-JF3T.

8
through the Shipt app, communicating with customers through the Shipt app, paying for the items

using a Shipt-supplied credit card, and delivering the purchased items to the Shipt customer.

25. Shipt’s retail partners include more than 130 retailers nationwide, ranging from

regional grocers such as H-E-B and Publix to Petco and CVS Health. Shipt’s delivery services

cover roughly 80% of U.S. households in about 5,000 cities. 8 In Minnesota, that includes national

retailers like Target, CVS, Best Buy, and Walgreens as well as regional businesses such as

Kowalski’s Markets, Lunds & Byerlys, Fresh Thyme Markets, and Midtown Global Market. For

example, as of August 16, 2022, an individual residing in the 55402 ZIP code (downtown

Minneapolis) could obtain goods from Lunds & Byerlys, Walgreens, CVS, GNC, Target,

Kowalski’s Markets, Top Ten Liquors, Chicago Lake Liquors, Liquor Boy, Fresh Thyme Market,

Bed Bath & Beyond, Petco, Sephora, Office Depot, Office Max, buybuy Baby, and Midtown

Global Market.

26. Shipt has tripled its workforce to more than 300,000 Shoppers nationwide during

the COVID-19 pandemic. 9

27. At the same time, Shipt’s business quadrupled during the pandemic. 10 In the first

year of the pandemic, Shipt’s orders increased a staggering 252% compared to 2019. That trend

did not stop in 2021, when Shipt’s orders increased an additional 40% over 2020. 11

8
Melissa Repko, ‘Out of stock’ items plague grocery delivery services. Personal shoppers at
Target’s Shipt aim to fix that, CNBC (Oct. 12, 2021), https://perma.cc/GQU6-USSN.
9
Id.
10
Id.
11
Nicole Norfleet, With staggering growth behind it, Target’s Shipt delivery business faces a now-
what moment, Star Tribune (Nov. 28, 2021), https://perma.cc/5T25-LL96.

9
 28. This uptick in Shipt’s business during the pandemic is confirmed by public polling.

In 2019, for example, only 11% of American adults reported ordering groceries online at least once

per month. As of 2021, that number has more than doubled to 23%—almost a quarter of American

adults. 12

29. In Minnesota, Shipt’s expansion has cost some workers jobs as employees and

forced them to change jobs or to accept misclassification as contract workers for Shipt. Lunds &

Byerlys, for example, is halting its in-house employee delivery service after it agreed to partner

with Shipt and says that its employee drivers can “continue to be a driver by joining the Shipt

team.” 13

30. In general, gig economy workers like Shipt’s Shoppers have struggled to afford

their lives with gig work. Despite the fact that 66% of gig workers report their gig work as their

only employment, gig workers have reported that the money they received was insufficient to meet

their household expenses. In all, 80% of the workers surveyed in a UCLA study said that their

pay was insufficient to meet household expenses. A third of the workers surveyed said that they

did not have enough money to buy groceries, while 39% stated that they were close to not being

able to afford groceries. 14

31. Similarly, a New York study of gig workers revealed that 60% of gig workers relied

on gig work as their main source of income. The majority of these gig workers did not choose gig

12
Id.
13
Adam Uren, Lunds & Byerlys partners with Shipt for grocery deliveries, Bring Me the News
(Apr. 27, 2022), https://perma.cc/CGZ6-J6FK.
14
Lucero Herrera, Brian Justie, Tia Koonse, and Saba Waheed, Worker Ownership, COVID-19,
and the Future of the Gig Economy, at 3 (UCLA Labor Center and SEIU-United Healthcare
Workers West 2020), available at https://perma.cc/WWT6-RUHV.

10
work because they preferred a flexible schedule. Rather, 57% of gig workers said they would

prefer to have their employer set their schedule and provide benefits. 15

32. Just like the California gig workers who struggled to buy groceries, the New York

gig workers often required public assistance in purchasing food. For example, 40% of the workers

reported utilizing SNAP benefits while 31% of the workers utilized cash assistance, welfare, or

TANF funds. 16

III. SHIPT SHOPPERS ARE EMPLOYEES UNDER MINNESOTA LAW.

33. The expansion of gig-economy work at the expense of stable employment is an

important issue for Minnesota. Minnesota’s explicit public policy under the Minnesota Fair Labor

Standards Act (“MFLSA”) is “(1) to establish minimum wage and overtime compensation

standards that maintain workers' health, efficiency, and general well-being; (2) to safeguard

existing minimum wage and overtime compensation standards that maintain workers' health,

efficiency, and general well-being against the unfair competition of wage and hour standards that

do not; and (3) to sustain purchasing power and increase employment opportunities.” Minn. Stat.

§ 177.22. Shipt’s expansion of misclassified Shoppers undermines each of these important goals.

34. The MFLSA applies to individuals who are employed by employers. “Employ”

means “permit to work.” Minn. Stat. § 177.23, subd. 5. An “employer” includes a “corporation”

or “any person or group of persons acting directly or indirectly in the interest of an employer in

relation to an employee.” Id. subd. 6. An “employee” is “any individual employed by an

employer.” Id. subd. 7.

15
Irene Lew, Debipriya Chatterjee, and Emerita Torres, The Gig Is Up: An Overview of New York
City’s App-based Gig Workforce during COVID-19, at 5 (Community Service Society of New
York 2021), available at https://perma.cc/2JQF-9CCL.
16
Id.

11
 35. Minnesota law draws a distinction between an employee of a business and an

“independent contractor.” For the purposes of the MFLSA, a worker’s proper classification as an

employee or independent contractor is governed by Minn. R. 5200.0221, which incorporates the

nine-factor test used in the context of workers’ compensation, Minn. R. 5224.0330-.0340, but

applies the same weight to the “control” factor as to the other factors. 17

36. Prior to the enactment of these rules, Minnesota utilized a five-factor common law

test that analyzed: (1) the right to control the means and manner of performance; (2) the mode of

payment; (3) the furnishing of material or tools; (4) the control of the premises where the work is

done; and (5) the right of the employer to discharge. Under this test, the right of the employer to

control the means and manner of performance was the most important factor.

37. The factors incorporated by Minn. R. 5200.0221 are weighed together and include

the common law factors discussed above. The factors are: (1) the employer’s control over the

worker; (2) the right of the employer to discharge the worker; (3) the worker’s availability to the

public independent of the employer; (4) the manner in which the worker is paid by the employer;

(5) the worker’s ability to realize a profit or loss for work done for the employer; (6) the right of

the worker to quit without penalty; (7) substantial investment in the work by the worker; (8)

responsibility; and (9) whether the workers are fundamental to the viability of the employer’s

business. Minn. R. 5224.0330–.0340. All factors must be weighed together to determine whether

the worker is economically dependent upon the business to which the worker provides services.

Minn. R. 5200.0221.

17
The workers’ compensation test, on the other hand, allocates more weight to the control factor.
Minn. R. 5224.0330, subp. 1.

12
 38. When applied to Shoppers, the factors overwhelmingly weigh in favor of Shipt’s

Shoppers being Shipt employees—not independent contractors.

A. Shipt has Virtually Complete Control over Shoppers’ Work.

39. Although control is not given special weighting under Minn. R. 5200.0221, an

employee’s control of the means and manner of performance has traditionally been considered the

most important factor when it comes to determining whether a worker is an employee or an

independent contractor.

40. The Minnesota Department of Labor and Industry promulgated Rule 5224.0330 to

analyze whether an employer has control over an employee’s method and manner of performance.

That rule provides thirteen factors to evaluate when determining whether control exists:

(1) authority over individual’s assistants; (2) compliance with instructions; (3) oral or written

reports; (4) place of work; (5) personal performance; (6) existence of continuing relationship; (7)

set hours of work; (8) training; (9) amount of time; (10) simultaneous contracts; (11) tools and

materials; (12) expense reimbursement; and (13) satisfying requirements of regulatory and

licensing agency. These factors are evaluated under the totality of the circumstances to determine

if an employer exercises sufficient control over an employee’s means and manner of performance

such that an employment relationship exists.

41. In the case of Shipt and its Shoppers, the totality of the circumstances

overwhelmingly demonstrates that Shipt controls the means and manner of its Shoppers’

performance of their work.

i. Shoppers must comply with detailed instructions from Shipt on how to

perform every facet of Shopper duties.

42. Control is indicated when an individual is required to comply with detailed

instructions about when, where, and how he or she is to work, including the order or sequence in

13
which the service is to be performed. Control is present if the employing unit has the right to

instruct or direct the methods for doing the work and the results achieved. Instructions may be

oral or may be in the form of manuals or written procedures which show how the desired result is

to be accomplished. Minn. R. 5224.0330, subp. 3.

43. Shoppers report that Shipt has the ability to—and does—control almost every facet

of how Shoppers perform their work through detailed instructions. Shipt also communicates its

policies and protocols to Shoppers by a variety of means, including e-newsletters, communications

through the Shopper App, communications through Shipt’s Shopper Hub, and through Facebook

groups controlled by Shipt’s agents. The best illustration of Shipt’s thorough control of Shopper

work can be found by looking at the instructions a Shopper must follow on a particular day to

complete an order.

44. Shipt instructs its Shoppers via its mobile application (“Shipt App”) through which

Shoppers receive, complete, and deliver orders. Shoppers report that they are entirely dependent

on the Shipt App in order to do their jobs, and any outages in the App renders a Shopper totally

incapable of performing work for Shipt. Shipt controls almost all aspects of Shopper work through

the Shipt App.

45. When a Shopper begins working for Shipt, Shipt assigns the Shopper a unique

“Shopper ID” which the Shopper is prohibited from sharing with any other person. This Shopper

ID is assigned to a Shopper and is tracked through the Shipt App.

46. According to Shoppers, at the start of each shift, Shoppers are required to report to

a specific territory specified by the Shipt App. Shoppers are not paid for the time that they are “on

shift” but are not assigned a customer order. A Shopper’s failure to report to their territory at the

14
start of a shift, cancelling a shift within 24 hours of the shift, or reporting late to a shift can result

in Shipt disciplining or terminating a Shopper.

47. Shipt provides its Shoppers with their work and pay by controlling which orders

individual Shoppers can receive through the Shipt App. 18 Through the Shipt App, Shipt controls

which Shoppers receive a customer order and when. When offered an order, Shoppers report that

they have approximately 30 seconds to accept or decline an order before the order is offered to

another Shopper.

48. When a Shopper receives an order, the order includes a Shipt partner store location

designated by Shipt where Shoppers are to purchase customer goods. Shipt also provides Shoppers

with directions for driving to the designated store and from the designated store to a customer’s

house. Shoppers report that they do not have the discretion to alter the order. For example, when

a Shopper picks up an order for groceries, the Shopper does not have the discretion to choose to

shop at Kowalski’s Market or Lunds & Byerlys. Similarly, if a Shopper receives an order for

groceries from Kowalski’s Market, it expects Shoppers to shop at the specific Kowalski’s location

that Shipt has specified for a particular order. In fact, many Shoppers believe that the distance

Shipt expects Shoppers to travel to and from a store is part of Shipt’s “pay based on the effort it

takes to complete the order” payment model, although most Shoppers are unclear as to how this

payment model actually works.

49. Shipt meticulously tracks and monitors Shopper activity during orders via the Shipt

App, and Shoppers must follow detailed procedures to notify Shipt through the Shipt App of the

Shopper’s status at key stages of the delivery process. For example, Shoppers must notify Shipt

18
Shipt further demonstrates its control over Shoppers by requiring them to go through a health
screening for COVID-19 symptoms before they can access the Shipt App.

15
when they have started shopping an order, when they have paid for the ordered goods, and when

an order is completed. Shipt uses the Shipt App to constantly monitor and control its Shoppers’

behavior while its Shoppers are performing work for Shipt. For example, Shoppers report

instances where they received texts from Shipt if they were running late on an order. Shoppers

also report that they also must scan the bar code for each item they shop for in the Shipt App when

picking items so that Shipt knows the item has been picked.

50. Shoppers report that Shipt provides them with detailed instructions about how to

complete customer orders when items a customer has ordered are not available. For example,

when an item a customer ordered is unavailable, Shipt directs the Shopper to contact the customer

and to choose specific replacement items.

51. Shipt specifies detailed rules for Shoppers to follow to create a uniform experience

for customers from which Shipt derives its brand recognition, reputation, and value. These detailed

rules include how to interact with its customers, including what Shoppers should say when leaving

voicemails, what to say on the phone with a customer to add a substitute item, and what to say

when delivering groceries to customers.

52. Shipt not only dictates how Shoppers should interact with customers, but also

explicitly requires Shoppers to only communicate with customers through the Shipt App. Shipt’s

contract prohibits contact between Shoppers and customers “other than for fulfilling delivery

services.”

53. Shipt additionally requires Shoppers to photograph and send Shipt receipts through

the Shipt App after each customer order is completed. Shipt forbids Shoppers from sharing

receipts with its customers, preventing customers from knowing how much Shipt marks up items

that are purchased and delivered to customers.

16
 ii. Shipt requires Shoppers to personally render their services to Shipt and
prohibits Shoppers from hiring assistants.

54. Control is indicated if the services must be personally rendered to the employing

unit. Minn. R. 5224.0330, subp. 6. Lack of control is indicated when an individual has the right

to hire a substitute without the employing unit’s knowledge or consent. Id. Moreover, control

over a worker is indicated when the employing unit hires and pays the individual’s assistants and

supervises the details of the assistants’ work. Minn. R. 5224.0330, subp. 2.

55. Shipt requires Shoppers to personally perform the Shipt orders that they accept.

56. Shipt offers specific orders to specific Shoppers through the Shipt App. Those

orders are associated with the Shopper’s Shopper ID, which the Shopper is prohibited from sharing

with others.

57. Shopper services are rendered directly to Shipt because Shoppers perform orders

as directed by Shipt. No Shopper receives an order directly from a customer. Similarly, Shoppers

generally do not receive tips directly from Shipt customers. Instead, Shipt itself determines how

it will compensate a Shopper for an order through its proprietary algorithm and pays Shoppers

both order wages and gratuities once per week on a designated payday. When Shipt customers do

tip Shoppers, those tips are generally provided electronically through the Shipt App.

58. Shipt Shoppers have no ability to utilize assistants in their work for Shipt. In fact,

Shipt coined the term “co-shopping” for Shoppers who utilize assistants. Co-shopping is

prohibited by Shipt and Shoppers are told that they can be disciplined and even terminated for

utilizing assistants. In fact, Shipt expressly states that “Shipt Shopping is a solo enterprise. Shipt

Shoppers may not bring anyone with them, including another approved Shipt Shopper. Only the

17
approved Shipt Shopper who has claimed the order is permitted to shop for and deliver to the

member.” 19

59. By prohibiting assistants, Shipt controls the means and manner of how a Shopper

must perform the work by mandating that the Shopper personally shops for and delivers an order.

iii. Shipt compiles detailed reports on Shopper activity that it uses to judge and
take action on Shopper performance.

60. Control is indicated if regular oral or written reports relating to the method in which

the services are performed must be submitted to the employing unit. Minn. R. 5224.0330, subp. 4.

61. Shipt, via the Shipt App, compiles detailed reports on each Shopper’s activities and

performance of their work. Shipt adjusts the number and quality of jobs Shoppers are offered

based on the three main metrics by which it judges Shoppers’ performance: (1) acceptance rate,

(2) on-time percentage, and (3) customer rating. Shipt apprises Shoppers of their scores in these

three metrics on a weekly basis.

62. Shipt keeps track of how often Shoppers accept or decline Shipt deliveries through

a metric it calls “acceptance rate.” Shipt penalizes Shoppers who do not accept offered deliveries

at a high enough rate and will terminate Shoppers whose acceptance rate falls below a certain

threshold. Shipt’s specific term for Shopper termination is “deactivation.”

63. Shipt also tracks when Shoppers deliver orders and assigns a metric it terms “on-

time percentage” to each Shopper. If Shoppers deviate from Shipt’s protocols or are running late,

Shoppers report that Shipt will contact Shoppers via text or phone to inquire why the Shopper is

not on time.

19
Shipt, Being a shopper, https://help.shipt.com/being-a-shopper.

18
 64. Shipt also monitors, and ultimately controls, its Shoppers through feedback it

solicits from its customers on every order via a rating system that Shipt uses to assess its Shoppers’

performance. The Shipt App solicits feedback and prompts its customers to rate Shoppers from

one to five stars for Shipt’s benefit, as it uses its rating for the discipline and termination of

Shoppers.

65. If the average customer rating of a Shopper falls below an established threshold set

by Shipt, Shipt may suspend or terminate that Shopper from providing services to customers

through the Shipt App. For example, according to Shoppers, a Shopper that falls below a customer

satisfaction of 4.7 “stars” (out of a rating of one to five stars) has to take “refresher” training course

offered by Shipt in order to continue work.

iv. Shoppers have a continuing, indefinite relationship with Shipt.

66. The existence of a continuing relationship between an individual and the person for

whom he or she performs services indicates the existence of an employment relationship.

Continuing services may include work performed at frequently recurring, though somewhat

irregular intervals, either on call of the employing unit or whenever work is available. Minn. R.

5224.0330, supb. 7.

67. Shipt and its Shoppers have a continuing relationship. If Shipt decides to hire a

Shopper, the Shopper must sign a form contract that lays out their obligations to Shipt. Shipt’s

form contract for Shoppers is for an indefinite term; Shoppers do not need to separately contract

with Shipt for each delivery accepted through the Shipt App.

68. Many Shoppers regularly perform work for Shipt at regular intervals over a long

period of time—some for several months and some for years. For example, one Shopper reported

19
that he has worked for Shipt since December 2019, while others worked for Shipt for less than one

year.

v. Shipt requires Shoppers to go through onboarding training as well as

corrective trainings if Shipt determines that the Shopper’s performance is
inadequate.

69. Control is indicated when employees are required to complete trainings. Minn. R.

5224.0330, subp. 9.

70. Shipt has control over Shoppers from the beginning of the employment

relationship. First, Shipt utilizes an interview process, including background checks, to determine

which Shoppers it will approve to provide its shopping and delivery services using the Shipt App.

Shipt can change its Shopper-eligibility standards at its sole discretion.

71. Shipt has required newly hired Shoppers to complete several different trainings,

including on how to shop for Shipt and how the app works. If a Shopper wishes to be able to

receive orders involving alcohol or pharmaceuticals, Shipt has required Shoppers to complete a

special certification training course provided by the company.

72. Shipt also requires Shoppers to go through corrective trainings if their acceptance

rating, customer rating, or on-time percentage falls below certain levels dictated by Shipt.

Shoppers report that failure of Shoppers to undergo those corrective trainings results in their

termination (i.e., “deactivation”).

vi. Shipt furnishes Shoppers with the Shipt App, without which it is
impossible for Shoppers to complete orders.

73. The furnishing of tools, materials, and supplies by the employing unit indicates

control over a worker. However, lack of control is not indicated if the individual provides tools or

supplies customarily furnished by workers in the trade. Minn. R. 5224.0330, subp. 12.

20
 74. The most vital tool Shipt furnishes to its Shoppers is the Shipt App. Without the

Shipt App, Shoppers are unable to receive Shipt orders or begin orders they have already accepted.

They are unable to communicate with customers during orders. They are unable to mark that they

have retrieved items in an order. They are unable to indicate that they have paid for an order at a

Shipt retail partner. They are unable to photograph receipts and send them to Shipt. They are

unable to indicate to Shipt that they have completed an order and thus be eligible to receive

payment for the order. In other words, without the Shipt App, a Shopper cannot perform any of

the tasks for Shipt that the Shopper is required to fulfill in order to complete an order to Shipt’s

satisfaction and be compensated for their work.

75. Shipt has total control over the Shipt App. Without notice to Shoppers, Shipt

experiments with features in the Shipt App which directly impact its Shoppers, creating an

environment in which Shoppers are subject to shifting working conditions determined at Shipt’s

discretion. For example, Shipt tested out its algorithmic “effort-based” pay metric in certain

markets before replacing its original pay scale for Shoppers nationwide.

76. In addition to the Shipt App, Shipt provides Shoppers with additional tools

necessary to complete their work for Shipt. Shipt gives every Shopper a debit card with pre-loaded

amounts that Shoppers use to make the purchases for Shipt customers. Shipt also provides

Shoppers with Shipt paraphernalia, including Shipt shirts and face masks, and encourages

Shoppers to wear Shipt clothing when handling orders.

77. While Shoppers generally provide their own vehicle, it is customary for delivery

drivers to provide their own vehicles. Additionally, Target has begun supplying some of Shipt’s

21
Shoppers with commercial vehicles instead of personal vehicles because the commercial vehicles

can hold more packages than personal vehicles. 20

vii. Shipt reimburses Shoppers for unexpected expenses related to customer

orders.

78. Payment by the employing unit of either the worker’s approved business or

traveling expenses, or both, indicates control over the worker. A lack of control is indicated when

the worker is paid on a job basis and is responsible for all incidental expenses. Minn. R.

5224.0330, subp. 13.

79. Shipt controls how Shoppers pay for customer deliveries. It provides each Shopper

with a Shipt debit card. The cards are supplied with only enough money for Shoppers to complete

customer orders that they have accepted. If there is an issue with the Shipt debit card and the

Shopper is required to pay for a customer order out of pocket, Shipt reimburses the Shopper for

the expenses incurred.

80. Similarly, if a customer’s order requires numerous substituted items that exceed the

amount of money Shipt has placed on the Shipt debit card for a particular order, Shoppers have

reported that they may pay for the order out of pocket and Shipt will reimburse the Shopper for

the order once the Shopper fills out reimbursement forms.

viii. Shipt determines where Shoppers shop for and complete orders.

81. Control is indicated if work, which could be done elsewhere, is done on the

employing unit’s premises. Minn. R. 5224.0330, subp. 5. However, the fact that work is not done

on the employer’s premises does not show freedom from control where the services are necessarily

performed away from the premises of the employing unit. Id.

20
Nicole Norfleet, Target streamlines digital order shipping in Twin Cities and beyond,
StarTribune (July 27, 2022) https://perma.cc/SG5U-ZH47.

22
 82. The place of work factor is not particularly relevant to the work of a Shopper, which

necessarily consists of traveling to retail establishments to procure items for Shipt customers and

then to deliver those items to customers. As discussed above, however, while Shipt effectively

does not have its own premises for Shoppers to perform work because of the nature of its business,

Shipt controls which shops Shoppers travel to for orders and what customers they must travel to

in order to complete orders. (See section III.A.i, infra.) For example, if a Shopper accepts a

customer order for strawberries from Target, the Shopper has no discretion to fulfill the order at a

Cub Foods even if the Shopper knows the Cub Foods offers the same product at a lower price.

ix. Even though Shoppers are provided with flexible work hours, they must
generally schedule their work hours with Shipt in advance and are penalized
when they deviate from those hours once they are set.

83. The establishment of set hours of work by the employing unit indicates control.

Where fixed hours are not practical because of the nature of the occupation, a requirement that the

worker work at certain times indicates control. Minn. R. 5224.0330, subp. 8.

84. While Shoppers have some flexibility in how they schedule their work for Shipt,

they are subject to certain requirements in order to continue shopping.

85. Shoppers do not have true control over their schedules. Instead of simply logging

into the Shipt App when they want to work, Shoppers report that they provide their windows of

availability to Shipt each week. Based on that availability, Shipt assigns them a schedule of shifts

for the upcoming week.

86. Shoppers report that they must also be ready to review and accept orders at Shipt’s

discretion. Generally, Shipt releases and offers orders to Shoppers at a set time—for example,

6:00 a.m. on a particular day if a Shipt customer has placed an order in advance—and a Shopper

23
must have his or her phone ready to receive an order that is placed during a time the Shopper is on

Shipt’s schedule during the day. Shoppers who are not on Shipt’s schedule are not offered orders.

87. Similarly, once a Shopper is on a schedule, a Shopper is penalized for declining too

many orders. Shipt also reserves the right to penalize a Shopper for failing to accept at least one

order per month. Similarly, if a Shopper has accepted an order, Shipt will penalize the Shopper

for not completing the order within the timeframe required by Shipt.

x. Some Shoppers work full-time for Shipt.

88. Control is indicated where a worker must devote full time to the activity, and a lack

of control is indicated if an individual works for a number of persons or firms at the same time.

Minn. R. 5224.0330, subps. 10, 11.

89. Shipt does not require workers to devote full time to the activity of being a Shopper.

However, some Shoppers report working 40 hours or more per week for Shipt in order to make

enough money to support themselves. Other workers have jobs that they work in addition to their

work for Shipt in order to make ends meet.

90. Taken as a whole, Shipt controls virtually every facet of a Shopper’s day-to-day

work. The only facet of work that a Shopper has control over is when he or she works and what

territory he or she agrees to work in. Such limited discretion shows that the amount of control

Shipt exercises is akin to an employer and is not the lack of control indicative of an independent

contractor relationship. As the workplace has evolved in response to the COVID-19 pandemic,

many employees have discretion over the location of work and have increased flexibility in their

schedules. Finding that such limited discretion on the part of the worker is enough to establish a

worker as an independent contractor would essentially eliminate the employment protections for

24
hundreds of thousands of workers in numerous professions. Like those workers, Shipt’s Shoppers

are appropriately classified as employees.

B. In Addition to Control, Other Factors Minnesota Courts Consider

Demonstrate that Shipt Shoppers Should Be Classified as Employees.

91. In addition to “control,” in Minnesota courts look at eight other factors when

determining whether an employment relationship exists. Those factors are: (1) right to discharge;

(2) availability to the public; (3) method of compensation; (4) realization of profit or loss; (5) the

worker’s right to terminate employment; (6) the worker’s substantial investment; (7)

responsibility; and (8) whether the worker’s services are fundamental to the business.

Minn. R. 5224.0340.

92. Each of these factors further confirm that Shipt Shoppers should be classified as

employees.

i. Shipt can discharge its Shoppers at any time for virtually any reason.

93. An employer has the right to discharge employees at will. The right to discharge

exists if the worker may be terminated with little notice, without cause, or for failure to follow

specified rules or methods. Minn. R. 5224.0340, subp. 2. Shipt has such discretion to discharge

Shoppers.

94. According to Shipt’s contract, it can terminate (i.e., “deactivate”) a Shopper for

even an “alleged violation” of the form contract it requires Shoppers to sign:

25
 95. Shipt can also deactivate a Shopper for an acceptance rating, customer rating, or

on-time percentage falling below designated levels determined by Shipt.

96. Shipt can additionally deactivate a Shopper for performing in a manner that it

deems “unprofessional,” which includes but is not limited to Shopper appearance.

97. Shipt also maintains the right to deactivate a Shopper if they do not perform at least

one delivery per month.

98. Finally, Shipt reserves the right to terminate Shoppers if it deems there to have been

any breach of its Shopper contract and maintains the right to unilaterally terminate the contract

without cause given a 14-day notice.

ii. Shopper services are only available to the public through Shipt.

99. Independent contractors make their services available to the general public on a

continuing basis. Minn. R. 5224.0340, subp. 3. Availability to the public is indicated by: (1)

having an office and assistants; (2) displaying a sign in front of a place of business; (3) holding a

business license; (4) having a listing in a business directory or business listing in a telephone

directory; or (5) advertising in a newspaper, trade journal, or magazine. Id. A worker who is not

available to the public indicates an employment relationship.

26
 100. Shipt’s Shoppers are not available to the general public. Instead, Shoppers are

available to Shipt customers only through Shipt and at Shipt’s discretion.

101. As discussed above, Shipt’s Shoppers are prohibited from either employing

assistants or subcontracting out their work to others. Instead, Shipt characterizes Shopping as a

“solo enterprise” where an order assigned by Shipt must be personally completed by the Shopper

to whom the order is assigned. (See section III.A.ii, infra.)

102. Independent contractors often require specialized licenses or registrations from

governmental entities to perform their work. For example, an independent contractor electrician

must have a license. There are no specialized business licenses required for a Shopper to work for

Shipt; instead, Shipt provides the Shoppers with the training and information they need to perform

their work. Shipt permits Shoppers to perform services with an ordinary driver’s license and

personal vehicle. Shoppers are not required to obtain business licenses of any kind, as shopping

for and delivering goods is not a distinct trade, occupation, or business that would require such a

license. When Shipt does ask Shoppers to make more sensitive purchases, such as those involving

alcohol or pharmaceuticals, it has required Shoppers to complete a special certification training

course provided by the company.

103. Shipt customers must go directly through Shipt (or Target, Shipt’s parent company,

for Target-specific orders) to request Shipt’s on-demand delivery services. Because Shoppers

cannot obtain orders other than through Shipt’s App, there is no opportunity or need to maintain

an office, display signage, or advertise services in a newspaper, trade journal, or magazine.

104. For example, almost any activity that an independent businessperson might engage

in to expand their business is not relevant to a Shopper because Shipt exclusively controls those

functions. Shipt—not Shoppers—collects payments from Shipt customers for goods ordered

27
through the Shipt App. Shipt handles invoicing, claim reconciliation, and resolution of complaints

that arise from interactions between its customers and Shoppers. Shipt mediates and resolves

conflicts involving its Shoppers in its discretion, including Shopper-customer disputes, allegations

of Shopper or customer misconduct, lost items, and Shopper complaints of not receiving the full

amount of compensation owed for delivery services provided through the Shipt App.

105. Shipt also controls and limits the information available to its Shoppers and

customers through the Shipt App, which Shipt can change at any time without notice. When a

Shopper is offered a customer order, Shoppers and customers do not freely negotiate over the terms

of the delivery. Instead, Shoppers are paid a set rate for the delivery—determined solely by

Shipt—and customers are free to tip Shoppers entirely at their discretion. In fact, Shipt sets its

own fees for customer orders. It charges Shipt members a $7 delivery fee for orders less than $35,

but no delivery fee for orders more than $35. Shipt also charges a $9.99 fee for all deliveries to

non-members. Shipt also unilaterally marks up prices on items ordered by customers.

106. Shipt does not allow Shoppers to increase their income by building a base of

customers who enjoy working with a particular Shopper. In fact, until August 2021, the Shipt App

did not allow customers to request particular Shoppers. Shipt also requires Shoppers to

communicate with customers through the Shipt App, and its contract prohibits contact between

Shoppers and customers “other than for fulfilling delivery services.” This prevents Shoppers and

customers from communicating directly and exchanging information. This limits Shoppers’

ability to differentiate themselves and increase their earnings in a way true independent contractors

or service-based entrepreneurs typically would.

107. Thus, Shoppers have virtually no availability to the public that is not filtered

through and controlled by Shipt.

28
 iii. Shipt pays Shoppers on a regularly scheduled payday rather than on a per-
job basis.

108. Shipt attempts to disguise its payment structure as a per-job payment plan, when in

fact it pays its workers more similarly to employees. Independent contractors are paid by the job,

while employees are generally paid at stated intervals with no requirement for repayment of the

excess drawn over commissions earned. The guarantee of a minimum salary indicates an

employment relationship. Minn. R. 5200.0340, subp. 4.

109. Shipt tries to pass off its Shoppers as independent contractors because they have

the discretion to accept or reject offered customer orders. However, this masks the true nature of

Shopper compensation. Shipt’s contract states that Shoppers are paid at a weekly interval by direct

deposit. As seen in the Shipt contract shown above, Shoppers are also required to shop at least

once per month or face deactivation.

110. Further, until recently, Shipt offered Shoppers a pay range for each order, including

a guaranteed minimum payment per order. It characterizes this payment plan as “effort-based”

but does not actually disclose to Shoppers how it factors “effort” into an order. For example,

according to the technology publication Gizmodo, Shipt’s “effort-based” pay plan assigned a 1,400

item order with a $20 pay for the Shopper. 21 Shipt continues to use the “effort-based” model but

Shoppers report that Shipt recently eliminated the pay range for orders and now offers a set base

pay amount for each order.

111. More recently, Shipt has claimed to its Shoppers that its pay algorithm based on

“effort” effectively amounts to an hourly rate. Specifically, Shipt claimed that “every shopper

across all cities will earn at least $16 per hour for each offer, based on Shipt’s time and effort

21
Bryan Menegus, Shipt’s ‘Effort-Based’ Pay Model Decided a 1,400-item Order Was Worth
About $20, Gizmodo (Sept. 25, 2020), https://perma.cc/HP6J-HA4Q.

29
estimates.” Shipt characterized this as the “Shipt Earnings Standard, which is a guarantee that no

offer will have offer pay that is less than $16 per hour in every single market across the country,

based on Shipt’s time and effort estimates.”

112. Finally, as the Shipt form contract states, the Shipt-Shopper relationship is

indeterminate. The contract term is ostensibly for one year, but it automatically renews without

action from either party. In other words, once a person becomes a Shopper for Shipt, they remain

a Shopper until Shipt fires them or until the Shopper ends the relationship. This demonstrates that

a Shopper is not truly employed by Shipt on a per-job basis; instead Shoppers are employees who

work for Shipt for an indeterminate term.

iv. Shoppers are unable to realize a profit or loss based upon their job
performance.

113. Independent contractors have an ability to realize a profit or suffer a loss based on

how they perform their services. An opportunity for profit or loss is demonstrated by: (1) an ability

to hire, direct, and pay assistants; (2) provide their own office, equipment, materials, or other

facilities for doing the work; (3) continuing and recurring financial liabilities or obligations relating

to the work; (4) profit or loss in the work depends on the relationship or receipts to expenditures;

(5) expenses incurred in connection with the work are paid by the individual; (6) specific jobs are

performed for prices agreed upon in advance; and (7) performance of the services affects the

individual’s business reputation, not the business reputation of those who purchase the services.

Minn. R. 5224.0340, subp. 5.

114. As discussed above, Shipt strictly forbids Shoppers from hiring assistants. (See

section III.A.ii, infra.)

115. While Shoppers provide their own vehicles, Shipt’s contract expressly states that it

leases the Shopper’s vehicle for the purposes of Shopper work. During those periods where

30
“Delivery Services” are being performed, “Shipt shall assume complete responsibility for the

operation of the vehicle during that time.” 22

116. Shoppers have no continuing financial obligations related to their work as

Shoppers. Shoppers are guaranteed minimum pay for each order performed, so they do not have

the ability to profit based on the comparison of receipts to expenditures.

117. Shoppers do not negotiate or agree in advance on what they will be paid for orders.

They are offered orders with specific pay unilaterally determined by Shipt and have approximately

30 seconds to accept or decline an order. Shipt does not provide Shoppers with any opportunity

to counter-offer or bid on customer orders.

118. Similarly, Shipt and its retail partners have control over the prices that customers

pay for goods ordered through the Shipt App and collected and paid for by Shoppers. Shoppers

have no control over markups on goods. Shipt also has sole control of the pay offered to Shoppers

for specific deliveries. Shipt does not share details about its pay algorithm with workers nor does

it explain how it calculates pay for each order within its form contracts.

119. Shipt also utilizes competitions and promotional offers for its Shoppers through the

Shipt App that incentivize Shoppers to accept more orders and perform more deliveries.

22
While Shipt’s contract contains a clause specifying that its relationship with Shoppers is that of
an independent contractor, employers cannot escape their obligations simply by coercing
employees to agree to be misclassified as independent contractors. Instead, it is a factual issue
decided by weighing the factors laid out by the applicable Minnesota rules.

31
 120. Before August 2021, Shipt customers were unable to request specific Shoppers. As

a result, a Shopper’s performance of their work for Shipt had no affect on the individual’s business

reputation. Instead, Shopper performance solely affected Shipt’s customer views of Shipt’s

services, as can be seen through reviews of Shipt through websites such as Google.

121. Beginning in August 2021, Shipt created a “Preferred Shopper” program, where a

customer can add a Shopper to a list of “Preferred Shoppers” who receive priority on assignment

to a customer’s order. Shoppers, however, do not have any input into this process, are not notified

by Shipt when they are selected as a Preferred Shopper and are not notified when a customer who

has designated a Shopper as a Preferred Shopper has scheduled an order. Additionally, if a

customer designates multiple Shoppers as Preferred Shoppers, the customer has no input as to

which Preferred Shopper is actually assigned an order. Unlike the book of business an independent

contractor could garner through repeat work for multiple clients, the “Preferred Shopper” program

keeps Shoppers locked within the Shipt ecosystem and does not facilitate their building of a client

base for a delivery business outside of Shipt.

122. The only economic choices a Shopper can make that impacts the Shopper’s ability

to make money is when and how often to shop for Shipt. This choice alone is not consistent with

the level of decision-making normally exercised by an entrepreneur or an individual operating

their own independent business. As Rule 5224.0340 states, the “opportunity for higher earnings

from piecework or commissions does not indicate an opportunity for profit or loss.”

123. Further, Shipt functionally limits a Shopper’s ability to accept or decline orders

offered to the Shopper through its acceptance rate metric and through the provision in its contract

that requires Shoppers to shop at least one customer order per month.

32
 124. Thus, Shipt directly shapes its Shoppers’ earnings, and thereby effectively prevents

Shoppers from attaining the profits and losses that would ordinarily be the hallmarks of running

their own, independent businesses.

v. Shoppers may terminate their working relationship with Shipt at will and
without incurring any penalty.

125. A worker’s ability to terminate a working relationship with an employer at will and

without any liability indicates employment. Minn. R. 5224.0340, subp. 6. A requirement to

provide notice isn’t relevant for the purposes of this factor. Id.

126. Shoppers may stop working for Shipt at any time. They can affirmatively inform

Shipt that they wish to terminate the relationship, as per the contract. Alternatively, Shoppers can

simply decline to log into the app and accept orders.

127. There is no penalty for a Shopper who chooses to stop working for Shipt, even if

the worker quits during an order and never completes it.

128. A Shopper’s ability to quit at any time without penalty indicates an employment

relationship with Shipt.

vi. Shopping for Shipt does not require substantial investment on the part of a
Shopper.

129. When a worker makes a substantial investment in his or her own facilities, that

indicates independent contractor status. Minn. R. 5224.0340, subp. 7. Facilities include

equipment or premises necessary for the work. Id.

130. Shoppers’ “facilities” for the purposes their work for Shipt primarily consist of the

facilities of the retail partners where Shoppers do their shopping for Shipt customer orders.

131. According to Shoppers, the majority of Shopper work is done in the stores of

Shipt’s retail partners where Shipt directs Shoppers to Shop for goods, and without access to a

33
Shipt retail partner’s facilities, a Shopper would be unable to perform work for Shipt. Shoppers

indicate that it can take an hour or more to shop for all of the items a customer has ordered.

Shoppers also estimate that they spend 50-75% of their time shopping for Shipt doing the physical

shopping, as opposed to delivering customer orders in their vehicles. For example, one Shopper

estimated that he spent about 45 minutes to 1 hour shopping for an order and spent approximately

25 minutes per order driving to the store and then to the customer’s house.

132. As explained above, the primary “equipment, ” which Shoppers use to complete

their work is the Shipt App, which Shipt provides to Shoppers to enable them to perform their

work for Shipt.

133. As discussed above, a Shopper is completely unable to perform work for Shipt

without the use of the Shipt App, as well as a pre-loaded debit card provided by Shipt to make

purchases for Shipt orders. (See section III.A.vi, infra.)

134. Many individuals own vehicles and smartphones regardless of whether or not they

shop for Shipt, as such, they do not purchase the vehicle or smartphone as an investment that

allows them to work for Shipt. For these reasons, this factor also favors establishing an

employment relationship between Shipt and its Shoppers.

vii. Shipt explicitly takes responsibility for Shopper actions.

135. If an employing unit is responsible for the negligence, personal behavior, and work

actions of an individual in contact with customers and the general public during times that services

are performed for the employing unit, an employment relationship is indicated. Minn. R.

5224.0340, subp. 8.

136. As seen above, although Shipt requires Shoppers to take some responsibility for

their actions while they provide services for Shipt customers, Shipt also “assume[s] complete

34
responsibility for the operation of” a Shopper’s vehicle while a Shopper performs delivery

services. “Delivery Services” means a Shopper’s “provision of shopping, loading and unloading

of property into and from [the Shopper’s] vehicle and delivery services via the” Shipt App.

137. Indeed, as discussed above, Shipt controls and directs many Shopper interactions

with customers and even masks Shopper identities from customers and vice versa.

138. Shipt also dictates the types of cars that its Shoppers may use for shopping and

delivery services, as well as the standards that Shoppers’ vehicles must meet. Shipt can change its

vehicle standards at its sole discretion. When Shoppers begin working for Shipt, they must supply

Shipt with their driver’s license as well as their auto insurance.

139. Thus, both Shipt and Shoppers bear some responsibility for Shopper behavior

during the time that Shoppers perform services for Shipt.

viii. Shipt’s Shoppers are fundamental to the viability of Shipt’s same-day

delivery business.

140. When a worker’s services are necessary to the fundamental business purpose for

which the organization exists, that factor indicates an employment relationship. Minn. R.

5224.0340, subp. 9.

141. Shipt would not be a functional business without the work of Shoppers.

142. Shipt’s Shoppers are engaged in work that is within the usual course of Shipt’s

business: the same-day delivery of groceries and other household goods a Shipt customer orders

through Shipt’s online platform.

143. Shoppers provide the on-demand shopping services for Shipt’s customers. They

are an integrated and essential part of Shipt’s same-day delivery business. The immediate

availability and temporal convenience of on-demand delivery is the fundamental service that Shipt

sells to its customers.

35
 144. Shipt is financially integrated with and dependent on its Shoppers. Shipt only

generates income for its same-day delivery business if its Shoppers actually shop for and transport

goods to its customers. Shipt sets the markup for goods that its customers pay and the rate of pay

Shoppers receive. It collects the entire payment from customers and then disburses some

percentage of that payment to its Shoppers as compensation for providing same-day delivery

services to its customers while keeping the remainder of the delivery fee and product markups for

itself. Without Shopper labor to provide Shipt’s services, Shipt’s on-demand delivery services

would not exist.

145. Far from merely connecting customers with Shoppers, Shipt is deeply involved in

how its same-day shopping and delivery services are provided, presumably to burnish Shipt’s own

brand by ensuring that services are of a uniform quality. It controls customer access to its services.

It controls Shopper access to providing delivery services to Shipt customers. Shipt prescribes

qualifications for its Shoppers, determines what customer orders Shoppers receive, and designs

and monitors the service that its Shoppers must provide to each customer. Shipt sets the price for

goods ordered through its service, incentivizes particular types of orders, and uses the Shipt App

to distribute orders to Shoppers at its discretion. Specifically, Shipt states that its “prices will vary

slightly from in-store prices to help cover the costs of picking, packing, and processing. For

example, a loaf of Wonderbread costs $2.29 in the store and $2.59 to have it delivered to your door

using Shipt.” 23 In other words, Shipt explicitly acknowledges that its business is not just as a

technological platform, but a grocery delivery business whose activities include “picking, packing,

and processing” items.

23
Shipt, How are your prices determined, https://help.shipt.com/pricing/how-are-your-prices-
determined.

36
 146. Shipt engages in extensive data collection and surveillance of its Shoppers, tracking

Shopper hours, movements, quality of services, percentage of offered orders accepted, as well as

other metrics from when Shoppers log onto the Shipt App until they log off. Shipt uses this

detailed data to monitor and make disciplinary decisions regarding Shoppers as well as for other

business purposes. Shipt’s business model begins and ends with Shoppers.

147. Shipt publicly holds itself out as a delivery company in the business of delivering

goods to customers so that they do not have to go and shop for the good themselves. Shipt

advertises that, “We’re more than delivery.” On its Facebook page, Shipt also states that “Shipt is

a grocery delivery service that lets members order groceries and alcohol from their local store for

delivery right to their door (in as little as one hour!).” Shipt’s website advertises an identical claim:

148. On its website, Shipt claims that “People are the magic behind Shipt,” highlighting

the stories of numerous Shoppers and painting them as integral members of Shipt’s mission”24

24
Shipt, About, https://www.shipt.com/about/.

37
 149. Indeed, Shipt encourages the identification of Shoppers with Shipt. For example,

Shipt provides Shoppers with Shipt shirts and face masks at no charge and encourages Shoppers

to wear Shipt clothing when handling orders. Shoppers thus do not provide greater visibility of

their own services by contracting with Shipt; instead, their work for Shipt simply serves to

advertise Shipt’s own services and only benefit Shipt’s reputational interests.

38
 150. Recognizing how crucial Shoppers are to its business, Shipt does everything in its

power to make it clear to customers that it has control over its Shoppers and how they interact with

customers. For example, Shipt represents to its customers that each Shopper “must successfully

complete a background check before they are approved to shop on” the Shipt App. 25

151. Shipt also advertises to customers that it purposefully keeps customer payment

information away from its Shoppers: “This means Shoppers never have access to a member’s

payment information.” 26

152. Shipt also explicitly highlights that it does not allow Shoppers to directly contact

customers. “Shipt leverages technology that permits a member and Shopper to communicate via

text or phone call without sharing telephone numbers. Through this process, Shipt utilizes a

“masked number” to ensure that neither party’s actual phone number” is shared. 27 It tells

customers that they “should never be asked by a Shopper to provide your actual number for Shipt-

related reasons. We recommend that you do not provide your telephone number to another person

while using Shipt.” 28 In other words, Shipt Shoppers are not provided with the type of customer

information that they would need to actually run their own grocery delivery businesses.

IV. SHIPT’S UNLAWFUL MISCLASSIFICATION OF SHOPPERS HAS RESULTED IN THE

VIOLATION OF NUMEROUS MINNESOTA LAWS THAT PROTECT THE RIGHTS AND
WELFARE OF EMPLOYEES.

153. By misclassifying its Shoppers, Shipt has devised an unlawful business model that

denies Shoppers the protections and benefits they have earned and are entitled to receive as

25
Shipt, Trust and Safety, https://www.shipt.com/trustandsafety/.
26
Id.
27
Id.
28
Id.

39
employees. Through this misclassification, Shipt has gained an unlawful and unfair competitive

advantage in the marketplace. Shipt’s misclassification of its Shoppers hurts vulnerable

Shoppers—especially during the COVID-19 pandemic—and evades Shipt’s responsibility to

contribute its share as employers into Minnesota’s social insurance programs. Shipt’s actions also

harm taxpayers who are often called upon to address negative consequences to Shoppers and their

families of Shipt’s unlawful employment practices.

154. Shipt’s misclassification of its Shopper workforce has allowed it to gain an

unlawful competitive advantage over its competitors by circumventing the protections and benefits

that Minnesota law requires employers to provide to their employees. The laws violated by Shipt

include, but are not limited to, requirements related to minimum wage, overtime wages, wage

statements, sick and safe leave in certain local jurisdictions, and social insurance programs.

A. Shipt’s Wage Payment Practices Results in Shoppers Sometimes Receiving

Hourly Pay Below Minimum Wage.

155. Minnesota Statutes, section 177.24, requires Shoppers to be paid the applicable

state or local minimum wage for each hour worked, regardless of the compensation formula or

method used.

156. In Minnesota, the state minimum wage for large employers was $9.86 per hour as

of January 1, 2019, and rose on the first day of each year to $10.00, $10.08, until its current rate

of $10.33 on January 1, 2022. In the city of Minneapolis, the local minimum wage is $14.50 per

hour, while in the city of Saint Paul, the local minimum wage is $12.50 per hour.

157. Shoppers report that they are often assigned one order for each hour they are on the

schedule, and many report that the process of driving to, Shopping for, and delivering an order can

take an hour or more on average.

40
 158. Shipt does not guarantee its Shoppers the minimum wage under relevant state and

local laws. According to Shipt data obtained by the Attorney General, orders can pay as little as

$4 and the average order payout for Shipt’s designated “Minneapolis” area was approximately

$12.50 in the spring and early summer of 2020. Because orders often take at least an hour for

Shipt workers to complete, this amount is below the applicable local minimum wage.

159. Shipt also does not pay its Shoppers for all hours worked. Examples of such unpaid

time includes, but is not limited to, time spent waiting in line to pay at Shipt retail partners, time

spent refueling, time spent maintaining vehicles according to Shipt’s standards, time spent driving

to and from Shipt retail partner locations, and time spent logged on and monitoring the Shipt App

for customer orders to be offered. Shipt cannot provide delivery services to its customers without

Shopper performance of these tasks.

160. Shipt has failed to meet its minimum wage obligations to its Shoppers, who are

employees for purposes of Minnesota’s wage and hour laws. For example, one Shopper estimated

that she made approximately $8-9 per hour while working for Shipt. Another Shopper estimates

that, for scheduled orders offered by Shipt, without tips, he only makes $6-10 per order.

B. Some Shipt Shoppers Who Devote Long Hours to Shipt Work Are Deprived
of Overtime Wages Required By Law.

161. Minnesota Statutes section 177.25, subdivision 1 requires that employees are paid

the applicable overtime rate of pay—one-and-one-half times the Shoppers’ regular rate of pay—

for all hours worked in excess of forty eight hours per week under Minnesota law.

162. However, Shipt does not pay its Shoppers overtime wages as required by law,

despite the fact that some Shoppers routinely work overtime to ensure that Shipt has a steady and

constant supply of Shoppers for deliveries on which its business depends. Indeed, some Shoppers

indicate they spent at least 50-60 hours in some weeks performing work for Shipt.

41
 163. Shipt has failed to meet its overtime wage obligations to its Shoppers, who are

employees for purposes of Minnesota’s wage and hour laws.

C. Shipt Has Failed to Provide Wage Statements to its Employees as Required By

Law.

164. Minnesota Statutes section 181.032 requires that Shoppers receive employment

notices, including an initial notice upon hiring, complete itemized wage statements, and

supplementary notices when the terms of employment changes.

165. Shipt does not provide Shoppers with any wage notices and, in fact, is wholly

opaque when it comes to how it calculates Shopper compensation. Its “effort-based” pay algorithm

is a black box to Shoppers and Shipt’s description of the factors that make up the algorithm are

not sufficient to comply with Minnesota law.

166. Shipt has failed to meet the notice requirements owed to its Shoppers, who are

employees for purposes of Minnesota’s wage and hour laws.

D. Shipt Does Not Provide Sick and Safe Time Wages Required by Local
Ordinances to its Shoppers.

167. The cities of Minneapolis and Saint Paul require employers to provide employees

with paid sick and safe time for hours worked within those city boundaries.

168. Shipt’s Shoppers do not accrue the paid sick and safe time benefits when they

perform work for Shipt within the boundaries of Minneapolis or St. Paul.

169. Shipt has failed to meet its sick and safe time obligations with respect to its

Shoppers, who are employees for purposes of the cities’ paid sick and safe time ordinances.

42
 E. Shipt’s Misclassification Scheme Deprives Shoppers of Access to Social
Insurance Programs to Which They Are Entitled.

170. Minnesota law requires Shipt to remit contributions and take other mandatory

actions under the Minnesota’s social insurance programs, including, but not limited to,

unemployment insurance and workers’ compensation insurance.

171. These programs are intended to provide wage replacement and other benefits in the

event an employee loses a job, is hurt on the job, or is otherwise unable to work.

172. Shipt has failed to meet these obligations with respect to its Shoppers, who are

employees for purposes of Minnesota’s social insurance programs. Shipt has instead shifted the

burden of workers’ compensation insurance onto its Shoppers through its form contract, which

requires Shoppers to maintain their own workers’ compensation insurance.

COUNT I
MISREPRESENTATION OF EMPLOYMENT RELATIONSHIP PROHIBITED
MINN. STAT. § 181.722, SUBD. 1

173. The State re-alleges all prior paragraphs of this Complaint.

174. Minnesota Statutes section 181.722, subdivision 1 prohibits an employer from

misrepresenting the nature of its employment relationship with its employees to any federal, state,

or local government unit; to other employers; or to its employees.

175. An employer misrepresents the nature of its employment relationship with its

employees if it makes any statement regarding the nature of the relationship that the employer

knows or has reason to know is untrue and if it fails to report individuals as employees when

legally required to do so. Minn. Stat. § 181.722, subd. 1.

176. Shipt has repeatedly informed Shoppers, including but not limited to in its form

contracts, that they are independent contractors despite having reason to know that such statements

are false and untrue. As discussed above, Shipt has reason to know that it has misclassified its

43
employees according to Minnesota law. Shipt’s parent company, Target, has acknowledged as

much in its Federal Securities and Exchange 10-K Report, where it states that “Our failure to

comply with federal, state, local, and international laws . . . could increase our costs, reduce our

margins, and lower our sales.”

177. Shipt has also repeatedly failed to report Shoppers as employees to numerous state

agencies when legally required to do so.

178. Minnesota Statutes section 268.044 requires employers to provide wage detail

reports to the Minnesota Department of Employment and Economic Development for all

employees. Employers who fail to report employees are subject to an administrative service fee

equal to 2% of the employee’s total wages for each employee for whom the information is

completely missing. Minn. Stat. § 268.044, subd. 3. Because it classifies its Shoppers as

independent contractors, on information and belief, Shipt has failed to provide wage detail reports

to the Department of Employment and Economic Development for all employees.

179. Under Minnesota’s Workers’ Compensation Act, employers are required to have

workers’ compensation insurance to cover potential claims of employees, either through an

insurance carrier or by having a qualifying self-insurance program authorized by written order of

the Minnesota Department of Commerce. Minn. Stat. § 176.181, subd. 2. Target, of which Shipt

is a wholly-owned subsidiary, is self-insured against workers’ compensation claims. 29 Self-

insurers are required by law to report to the Minnesota Department of Commerce various

information, including payroll, by April 1 of each year. Minn. R. 2780.0500. Because the

Shoppers are misclassified as independent contractors, on information and belief, Shipt does not

29
Target Corporation 2021 Form 10-K at 30.

44
report them on its payroll, and Shipt’s independent contractor agreement with Shoppers places the

burden on Shoppers to maintain workers’ compensation insurance.

180. Employers are required to take a withholding tax out of their employees’ wages.

Minn. Stat. § 290.92, subd. 2a(1). Based on the allegations above, Shipt Shoppers should have

been classified as employees for withholding tax purposes. Shipt’s classification of its Shoppers

as independent contractors thus resulted in Shipt failing to report and withhold these wages to the

Minnesota Department of Revenue, provide accurate quarterly returns to the Department of

Revenue, or provide accurate wage statements and tax forms to Shoppers.

181. The Attorney General has the authority to enforce section 181.722 pursuant to

Minnesota Statutes sections 181.1721 and 8.31.

182. Shipt’s conduct, practices, and actions described in this Complaint constitute

multiple, separate violations of Minnesota Statutes section 181.722, subd. 1.

COUNT II
AGREEMENTS RESULTING IN EMPLOYEE MISCLASSIFICATION PROHIBITED
MINN. STAT. § 181.722, SUBD. 2

183. The State re-alleges all prior paragraphs of this Complaint.

184. Minnesota Statutes section 181.722, subdivision 2 prohibits an employer from

requiring or requesting any employee to enter into any agreement, or sign any document, that

results in misclassification of the employee as an independent contractor or otherwise does not

accurately reflect the employment relationship with the employer.

185. Shipt requires all Shoppers to sign an agreement stating that “the relationship

between the parties to this Agreement”—Shipt and the Shopper—“is solely that of independent

contractors.” The agreement further claims that the parties “expressly agree” that “this Agreement

45
is neither an employment agreement nor one that creates an employment relationship between

SHIPT and You.”

186. This agreement does not accurately reflect the employment relationship between

Shipt and its Shoppers, and results in the misclassification of Shoppers as independent contractors

when they should be classified as employees under Minnesota law.

187. The Attorney General has the authority to enforce section 181.722 pursuant to

Minnesota Statutes sections 181.1721 and 8.31.

188. Shipt’s conduct, practices, and actions described in this Complaint constitute

multiple, separate violations of Minnesota Statutes section 181.722, subd. 2.

COUNT III
MINIMUM WAGE VIOLATIONS UNDER THE MINNESOTA FAIR LABOR
STANDARDS ACT
MINN. STAT. § 177.24

189. The State re-alleges all prior paragraphs of this Complaint.

190. The Minnesota Fair Labor Standards Act (“MFLSA”), Minnesota Statutes section

177.24, requires employers to pay employees at least the minimum wage for all hours worked.

191. Section 177.24 sets out a higher wage for “large employers,” meaning employers

whose business done is not less than $500,000.

192. Shipt is a “large employer” for the purposes of section 177.24.

193. Starting August 1, 2016, the minimum wage in Minnesota for large employers was

$9.50 an hour, subject to annual adjustment for inflation. Minn. Stat. § 177.24, subd. 1(b)(1), (f).

Minnesota’s large-employer minimum wage was increased to $9.65 an hour in 2019, $10.00 an

hour in 2020, $10.08 an hour in 2021, and is currently $10.33 an hour in 2022.

194. Section 177.24, subdivision 4 also requires employers to reimburse employees for

travel expenses if those expenses would bring the employee’s average rate below the minimum

46
wage and are unrelated to an employee’s travel from the employee’s residence and place of

employment.

195. No employer may directly or indirectly credit, apply, or utilize gratuities towards

payment of the minimum wage. Minn. Stat. § 177.24, subd. 2.

196. Shipt’s misclassification of its Shoppers as independent contractors has caused its

Shoppers to routinely receive no pay for some compensable work time and sometimes receive less

than the applicable minimum wage for work they perform for Shipt. The tips received by Shoppers

do not remedy Shipt’s failure to pay Shoppers the applicable minimum wage. Shipt willfully

misclassified its Shopper workforce as independent contractors.

197. The Attorney General has the authority to enforce section 177.24 pursuant to

Minnesota Statutes sections 177.45 and 8.31.

198. Shipt’s conduct, practices, and actions described in this Complaint constitute

multiple, separate violations of Minnesota Statutes section 177.24.

COUNT IV
VIOLATIONS UNDER THE PAYMENT OF WAGES ACT
MINN. STAT. § 181.101, 181.13, 181.14

199. The Payment of Wages Act (“PWA”), Minnesota Statutes sections 181.01–

181.1721, requires employers to pay employees all the wages owed to them or be subject to back

wages, liquidated damages, and civil penalties.

200. Minnesota Statutes section 181.101 requires employers to pay employees all wages

owed under any statute, regulation, rule, ordinance, or other legal authority and provides

employees with a substantive right to those wages. Minnesota Statutes sections 181.13 and 181.14

require employers to promptly provide employees with earned, unpaid wages after the employee

is discharged, quits, or resigns.

47
 201. The City of Minneapolis Ordinance, Title 2, Chapter 40, article 390 (“Minneapolis

Minimum Wage Ordinance”) sets forth the minimum wage for work performed in the City of

Minneapolis. On July 1, 2018, the applicable minimum wage for large employers was $11.25. On

July 1, 2019, the minimum wage increased to $12.25. On July 1, 2020, the minimum wage

increased to $13.25. On July 1, 2021, the minimum wage increased to $14.25.

202. Gratuities cannot be credited, applied, or utilized towards payment of

Minneapolis’s minimum wage requirement. Minneapolis, Minn., Code Title 2, § 40.400.

203. The Minneapolis Minimum Wage Ordinance provides a substantive right to the

minimum wages set out in the ordinance, including both administrative remedies and a private

cause of action for aggrieved employees.

204. City of Minneapolis Ordinance Title 2, Chapter 40, article 330 defines a “large

business” as one that has more than 100 employees.

205. Shipt is a “large business” for the purpose of Minneapolis’ Minimum Wage

Ordinance.

206. Minimum wages under the Minneapolis Minimum Wage Ordinance are collectible

under Minnesota Statutes sections 181.101, 181.13, and 181.14. The Attorney General has the

authority to enforce each of these statutes through Minnesota Statutes sections 181.1721 and 8.31.

207. The City of Saint Paul Ordinance chapter 224 (“Saint Paul Minimum Wage

Ordinance”) sets forth the minimum wage for the City of Saint Paul. On July 1, 2020, the

applicable minimum wage was $11.50. On July 1, 2021, the applicable minimum wage was

$12.50.

208. Gratuities cannot be credited, applied, or utilized towards payment of St. Paul’s

minimum wage requirement. St. Paul. Minn., Code Part II, Title XXIII, § 224.04(a).

48
 209. The Saint Paul Minimum Wage Ordinance provides a substantive right to the

minimum wages set out in the ordinance, including an administrative process by which a

complainant can seek back wages owed.

210. City of Saint Paul Ordinance section 224.01 defines a “large business” as one with

more than 100 employees.

211. Shipt is a “large business” for the purpose of Saint Paul’s Minimum Wage

Ordinance.

212. Minimum wages under the Saint Paul Minimum Wage Ordinance are collectible

under Minnesota Statutes sections 181.101, 181.13, and 181.14. The Attorney General has the

authority to enforce each of these statutes through Minnesota Statutes sections 181.1721 and 8.31.

213. Shipt’s misclassification of its Shoppers as independent contractors has caused its

Shoppers to routinely receive no pay for some compensable work time and sometimes receive less

than the applicable minimum wage for work they perform for Shipt. Shipt willfully misclassified

its Shopper workforce as independent contractors.

214. Shipt’s conduct, practices, and actions described in this Complaint constitute

multiple, separate violations of Minnesota Statutes sections 181.101, 181.13, and 181.14.

COUNT V
OVERTIME VIOLATIONS OF THE MINNESOTA FAIR LABOR STANDARDS ACT
MINN. STAT. §§ 177.25

215. The State re-alleges all prior paragraphs of this Complaint.

216. The MFLSA, Minn. Stat. § 177.25, requires employers to pay employees overtime

wages of at least 1.5 times their regular rate of pay after 48 hours of work during a workweek.

217. The Attorney General has the authority to enforce Minn. Stat. § 177.25 pursuant to

Minn. Stat. §§ 177.45 and 8.31.

49
 218. Shipt Shoppers who worked more than 48 hours in a workweek were not paid the

overtime wages owed under the MFLSA because Shipt misclassified its Shopper workforce as

independent contractors. Shipt willfully misclassified its Shopper workforce as independent

contractors.

219. The Attorney General has the authority to enforce Minn. Stat. § 177.25 pursuant to

Minn. Stat. §§ 177.45 and 8.31.

220. Shipt’s conduct, practices, and actions described in this Complaint regarding failure

to pay overtime wages constitute multiple, separate violations of Minnesota Statutes section

177.25.

COUNT VI
NONPAYMENT OF SICK AND SAFE TIME UNDER THE PAYMENT OF WAGES
ACT
MINN. STAT. § 181.101

221. The State re-alleges all prior paragraphs of this Complaint.

222. Minnesota Statutes section 181.101 requires employers to pay employees all wages

owed under any statute, rule, regulation, rule, ordinance, or other legal authority and provides

employees with a substantive right to those wages. Minn. Stat. § 181.101(a).

223. The City of Minneapolis Ordinance, Title 2, Chapter 40, article 210 (“Minneapolis

Sick and Safe Time Ordinance”) sets forth required sick and safe time wages employees are

entitled to receive for work performed in the City of Minneapolis.

224. Employees accrue one hour of sick and safe time for every thirty hours worked

within the boundaries of the city of Minneapolis, up to a maximum of 48 hours per year.

225. The Minneapolis Sick and Safe Time Ordinance provides a substantive right to the

sick and safe time wages set out in the ordinance.

50
 226. Had Shipt correctly classified its Shoppers as employees, Shoppers who work

within the boundaries of Minneapolis would have been entitled to sick and safe time wages under

the Minneapolis Sick and Safe Time Ordinance.

227. The sick and safe time wages owed to employees are collectible through Minn. Stat.

§ 181.101.

228. The Attorney General has the authority to enforce Minn. Stat. § 181.101 pursuant

to Minn. Stat. §§ 181.1721 and 8.31.

229. Shipt Shoppers who worked within the boundaries of Minneapolis did not receive

sick and safe time wages. Shipt Shoppers who were misclassified as independent contractors are

owed sick and safe time wages as a result of Shipt’s misclassification. Shipt has willfully classified

its Shopper workforce as independent contractors.

230. Shipt’s conduct, practices, and actions described in this Complaint regarding failure

to pay sick and safe time wages constitute multiple, separate violations of Minnesota Statutes

section 181.101.

COUNT VII
FAILURE TO PROVIDE EMPLOYMENT NOTICE UNDER THE PAYMENT OF
WAGES ACT
MINN. STAT. § 181.032

231. The State re-alleges all prior paragraphs of this Complaint.

232. Minnesota Statutes section 181.032(d) requires Minnesota employers to provide

employees a written notice containing certain information, including the rate of pay and basis

thereof, including whether the employee is paid by the hour, shift, day, week, salary, piece,

commission, or other method and the specific application of any additional rates.

233. Shipt does not provide Shoppers with the employee notice required by law.

51
 234. Specifically, Shipt does not provide Shoppers with sufficient information to

determine how Shipt calculates the pay that Shoppers are owed for a particular order. Because

Shoppers should be classified as employees, the failure to provide this information at the start of

employment is a violation of section 181.032(d).

235. The Attorney General has the authority to enforce Minn. Stat. § 181.032 pursuant

to Minn. Stat. §§ 181.1721 and 8.31.

236. Shipt’s conduct, practices, and actions described in this Complaint regarding failure

to provide notice of employment constitute multiple, separate violations of Minnesota Statutes

section 181.032(d).

RELIEF

WHEREFORE, the State of Minnesota, by its Attorney General, Keith Ellison, respectfully

asks this Court to award judgment against Defendant Shipt, as follows:

1. Declaring that Shipt’s conduct described in this Complaint constitutes a

misclassification of Shoppers as independent contractors when they are legally

employees, and permanently enjoining Shipt from continuing in the acts, practices,

and conduct of misclassifying its Shoppers as independent contractors;

2. Declaring that Shipt’s acts described in this Complaint constitute multiple, separate

violations of Minnesota Statutes sections 177.24, 177.25, 181.032, 181.101,

181.13, and 181.14 by misclassifying its Shopper workforce as independent

contractors instead of employees;

3. Permanently enjoining Shipt and its employees, officers, directors, agents,

successors, assignees, affiliates, merged or acquired predecessors, parent or

controlling entities, subsidiaries, and all other persons acting in concert or

52
 participation with them from engaging in the misclassification of workers under

Minnesota law;

4. Directing that the court’s findings of fact and conclusions of law be transmitted to

the Minnesota Department of Labor and Industry, who shall then report the finding

to relevant state and federal agencies, including the Minnesota Department of

Commerce, the Minnesota Department of Employment and Economic

Development, the Minnesota Department of Revenue, the Internal Revenue

Service, and the United States Department of Labor, pursuant to Minnesota Statutes

section 181.722, subdivision 5;

5. Awarding judgment against Shipt for restitution and/or disgorgement under the

parens patriae doctrine, the general equitable powers of the Court, Minnesota

Statutes section 8.31, and any other authority, for all persons injured by Shipt’s acts

as described in this Complaint, including restitution and/or disgorgement for all

unpaid minimum wages, overtime wages, and sick and safe time wages;

6. Awarding judgment against Shipt for back pay, gratuities, and compensatory

damages for misclassified workers injured by Shipt’s misconduct, less any amount

actually paid to the worker by Shipt, along with judgment against Shipt in an

additional, equal amount as liquidated damages, pursuant to Minnesota Statutes

section 177.27, subdivisions 7 and 8, and as otherwise provided by law;

7. Awarding judgment against Shipt for civil penalties of up to $25,000, pursuant to

Minnesota Statutes, section 8.31, subdivision 3, for each separate violation of

Minnesota law;

53
 8. Awarding the State its costs, including costs of investigation, attorneys’ fees, as

authorized by Minnesota Statutes, section 8.31, subd. 3a; and

9. Granting such further relief as provided by law or equity or as the Court deems

appropriate and just.

Dated: October 27, 2022 Respectfully submitted,

KEITH ELLISON
Attorney General

JAMES W. CANADAY
Deputy Attorney General
State of Minnesota

/s/ Jonathan D. Moler

JONATHAN D. MOLER (#0396621)
Assistant Attorney General

ERIC J. MALONEY (#0396326)

Assistant Attorney General

JASON PLEGGENKUHLE (#0391772)

Assistant Attorney General

445 Minnesota Street, Suite 1200

St. Paul, MN 55101-2130
(651) 724-9951
(651) 757-1021
(651) 757-1147
jonathan.moler@ag.state.mn.us
eric.maloney@ag.state.mn.us
jason.pleggenkuhle@ag.state.mn.us

Attorneys for Plaintiff, State of Minnesota

54
 MINN. STAT. § 549.211

ACKNOWLEDGMENT

The party or parties on whose behalf the attached document is served acknowledge through

their undersigned counsel that sanctions may be imposed pursuant to Minn. Stat. § 549.211 (2012).

Dated: October 27, 2022 Respectfully submitted,

/s/ Jonathan D. Moler

JONATHAN D. MOLER (#0396621)
Assistant Attorney General

445 Minnesota Street, Suite 1200

St. Paul, MN 55101-2130
(651) 724-9951
(651) 757-1021
(651) 757-1147
jonathan.moler@ag.state.mn.us

Attorneys for Plaintiff, State of Minnesota

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