Labor & Employment Law Daily Wrap Up, WAGE-HOUR—MINIMUM WAGE—S.D.N.Y.: NYC’s Tipping Laws survive most challenges brought by delivery platforms, (Aug 25, 2026)

By Ronald Miller, J.D.

The Tipping Laws did more than regulate the underlying commercial transaction by prescribing when and how a communication about tipping must appear in covered delivery platforms’ consumer-facing interfaces and require a particular percentage option.

New York City was entitled to dismissal of claims brought by DoorDash and Uber alleging that its Tipping Laws constituted First Amendment retaliation, constituted violations of the Takings Clause, violated their substantive due process rights, was constitutionally vague, and exceeded the city’s police powers, ruled a federal district court in New York. The Tipping Laws require covered platforms to provide customers an “opportunity to pay a gratuity” to the delivery worker (1) “before or at the same time” the order is placed, (2) “in plain language and in a conspicuous manner,” and (3) with gratuity options that include an option of “at least 10 percent of the purchase price” and an option to manually enter a different amount or percentage. However, the food delivery platforms’ compelled-speech challenge to the Tipping Laws, which required the delivery platforms to display a tipping prompt at or before checkout that includes an option of at least 10 percent, survived the motion to dismiss ( DoorDash, Inc. v. The City of New York , No. 25 Civ. 10268 (GBD) (S.D.N.Y. Aug. 20, 2026)).

Minimum pay standard. In 2021, the New York City Council enacted Local Law 115, which directed the Department of Consumer and Worker Protection (DCWP) to study the working conditions of app-based food delivery workers and promulgate a minimum pay standard. DCWP’s study found that delivery workers earned $7.09 per hour exclusive of tips—$4.03 per hour net of job-related expenses—and that workers classified as independent contractors lacked workers’ compensation coverage and, frequently, health insurance. The resulting Minimum Pay Rule (MPR) was finalized on June 12, 2023.

The MPR guarantees delivery workers a wage floor without regard to tips. DCWP declined to incorporate tips into that calculation in part because “tips are an unreliable form of income” and anticipated that platforms might respond to the MPR with user-interface changes that “discourage or eliminate tipping.”

DoorDash and Uber Eats operate third-party platforms through which consumers order food and grocery deliveries in New York City. When the MPR took effect on December 4, 2023, DoorDash moved all tipping functionality for New York City customers to post-checkout only. Beginning in December 2023, Uber Eats stopped displaying its pre-checkout tipping screen to almost all customers and instead provided the option to tip after an order was completed.

Tipping Laws. According to a city council Committee Report, the platform changes resulted in a loss of $85 million in tips earned by delivery workers between December 2023 and June 2024. The council adopted the Tipping Laws on July 14, 2025. Local Laws 107 and 108 became effective without the mayor’s signature.

The Tipping Laws require covered platforms to provide customers an “opportunity to pay a gratuity” to the delivery worker (1) “before or at the same time” the order is placed, (2) “in plain language and in a conspicuous manner,” and (3) with gratuity options that include an option of “at least 10 percent of the purchase price” and an option to manually enter a different amount or percentage.

Lawsuit. DoorDash and Uber Eats commenced this action on December 11, 2025 and moved for a preliminary injunction. The court denied the motion for a preliminary injunction on January 22, 2026. The Tipping Laws took effect on January 26, 2026. The city moved to dismiss the complaint.

Compelled speech. DoorDash and Uber Eats first alleged that the Tipping Laws compelled them to convey a message about tipping that they would not otherwise communicate in violation of the First Amendment and Article I, § 8 of the New York Constitution. For its part, the city argued that the Tipping Laws regulate conduct, that any speech implicated is commercial, that Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626 (1985), governs, and that the Tipping Laws survive any applicable level of scrutiny.

The court agreed that the speech at issue was commercial but cannot conclude at the pleading stage that Zauderer governs or that the Tipping Laws satisfy intermediate scrutiny as a matter of law.

The Tipping Laws did more than regulate the underlying commercial transaction. They prescribe when and how a communication about tipping must appear in covered delivery platforms’ consumer-facing interfaces and require the communication to include particular percentage option. Thus, on the face of the statute and the complaint, the Tipping Laws regulate speech.

Commercial speech. Commercial speech includes “expression related solely to the economic interests of the speaker and its audience,” and speech that “does ‘no more than propose a commercial transaction.’” The government’s authority to regulate commercial transactions supports its authority to regulate commercial speech “linked inextricably” to those transactions. Here, the required prompt appears only within the paid food-delivery transaction and concerns compensation associated with the delivery service being purchased. Accordingly, the First Amendment claim proceeds under the commercial-speech framework, not strict scrutiny, the court found.

Zauderer. Zauderer permits the government to compel “purely factual and uncontroversial information” about the terms on which the speaker’s services are available, so long as the requirement is not unjustified or unduly burdensome. DoorDash and Uber Eats plausibly alleged that the Tipping Laws did more than require disclosure of a preexisting fact about their own delivery services. The Tipping Laws require the plaintiffs to present an opportunity for the customer to make a voluntary payment to a delivery worker and compel statutorily specified percentage tip option. On those allegations, the court could not conclude as a matter of law that Zauderer governs.

Intermediate scrutiny. Under Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n, 447 U.S. 557 (1980), a regulation of lawful, nonmisleading commercial speech must serve a substantial governmental interest, directly advance that interest, and be “not more expensive than is necessary to serve that interest.” The government must show that the asserted harms are real and that the regulation will alleviate them “to a material degree.”

Here, the city identified substantial interests in delivery-worker livelihood, consumer choices, and cost transparency. The legislative materials provided support for requiring tipping opportunity at checkout. That evidence addressed when a tipping prompt must appear. But the Tipping Laws prescribe the prompt’s content as well as its timing, the court found. They require the plaintiffs’ prompt to feature an option of at least 10 percent of the purchase price. The legislative evidence was thus directed at the placement of the tipping opportunity, not at the compelled 10-percent option.

For the plaintiffs’ part, they alleged that the compelled 10-percent option itself communicated that 10 percent is an appropriate pre-service tip and that they would not communicate that message absent the Tipping Laws. Accepting the plaintiffs’ allegations as true, the court could not conclude as a matter of law that the Tipping Laws bear the reasonable fit that Central Hudson requires. Thus, the city’s motion to dismiss the constitutional claim was denied.

Retaliation claim. Next, the plaintiffs alleged that the city enacted the Tipping Laws in retaliation for their protected communications concerning tips. To state a First Amendment retaliation claim, a plaintiff must plausibly allege that “(1) [its] speech or conduct was protected by the First Amendment; (2) the defendant took an adverse action against [it]; and (3) there was a causal connection between this adverse action and the protected speech.”

Because causation was dispositive, the court assumed without deciding that the plaintiffs engaged in protected speech and that enacting of the Tipping Laws constituted an adverse action.

The plaintiffs principally relied on the timing of the legislation and statements by a city council member to establish causation. The bills were introduced in April of 2024, within months of the plaintiffs’ December 2023 changes to their tipping practices. The council member criticized their removal of the pre-checkout tipping options. Those allegations supported an inference that the plaintiffs’ changes may have prompted a legislative response.

However, the council member’s statements and pleaded chronology did not plausibly establish the motive for the full council that enacted the Tipping Laws. The city’s motion to dismiss the retaliation claim was granted.

Takings claim. The plaintiffs next alleged that the Tipping Laws affect a regulatory taking under the federal and state Takings Clauses by restricting how they may design and use their platforms. A takings plaintiff must first identify a protected property interest.

The plaintiffs invoked contractual rights, intellectual property rights and a claimed right to modify their platforms at will. However, they identified no particular contract term that the Tipping Laws appropriate or extinguish. Likewise, they identified no patent, copyright, trademark, or trade secret that the Tipping Laws use, disclose or extinguish. Nor did the complaint identify a source of law creating a property entitlement to keep the platforms’ checkout design free from regulation. Thus, they failed to identify the property interest allegedly taken.

Moreover, the character of the governmental action did not plausibly support a taking because the Tipping Laws regulate the use of the plaintiffs’ platforms, and did not involve a physical invasion or appropriation of their property. Accordingly, the city’s motion to dismiss the takings claim was granted.

Due process claim. Next, the plaintiffs asserted substantive due process claims under the Fourteenth Amendment and Article I, § 6 of the New York Constitution. “To establish a substantive due process violations, a plaintiff must show both (1) that she has an interest protected by the Fourteenth Amendment, and (2) that the statute, ordinance, or regulation in question is not rationally related to a legitimate government interest.”

Even assuming that DoorDash and Uber have a protected property interest, their substantive due process claim failed because their complaint did not plausibly allege that the Tipping Laws lacked a rational relationship to legitimate government interests. Here, the city could rationally conclude that requiring platforms to provide a pre-checkout tipping opportunity would promote delivery-worker livelihood and preserve consumer choice. Thus, the city’s motion to dismiss was granted.

Vagueness claim. The plaintiffs asserted a facial vagueness theory under both the Due Process Clauses of the Fourteenth Amendment and Article I, § 6 of the New York Constitution. The platforms alleged that the requirements to provide an “opportunity to pay a gratuity” in a “conspicuous manner” are unconstitutionally vague.

The Tipping Laws identified their operative requirements: a gratuity opportunity presented at or before order placement, in plain language and conspicuously, with an option of at least ten percent and a manual write-in option. Uncertainty regarding how the font size or scroll depth may bear on “conspicuous” presentation did not render a law vague where the application to the plaintiffs was clear. Thus, the city’s motion to dismiss the vague claim was granted.

City police powers. Finally, the plaintiffs alleged that the Tipping Laws exceeded the city’s delegated policy powers because they benefit delivery workers rather than the general public. Here, the court determined that the plaintiffs’ complaint did not plausibly allege that the Tipping Laws exceeded the city’s authority. They apply citywide to covered food and grocery delivery services and regulate an industry that involves thousands of city businesses and millions of orders placed. In view of that alleged scale and scope, the complaint did not plausibly allege the regulation directed to workers earnings, consumer choice, and transaction practices fell outside the city’s general-welfare authority. Accordingly, the city’s motion to dismiss this claim was granted.

The case is No. 25 Civ. 10268 (GBD).

Judge: Daniels, G.

Attorneys: Katielynn Boyd Townsend (Gibson Dunn & Crutcher) for DoorDash, Inc. John Charles Quinn (Hecker Fink) for Uber Technologies, Inc. Amanda Christine Ikard, New York City Law Department, for the City of New York.

Companies: DoorDash, Inc.; Uber Technologies, Inc.; City of New York

Cases: WageHour MinimumWage IndividualRights StateLegislation NewYorkNews