In what may be the first "gig economy" case to be fully decided on the merits a California federal court finds that an independent contractor is not an employee [ Lawson v Grubhub Inc. Case No.15-cv-05128-JSC ]
The case involved Grubhub in a labor lawsuit filed by one of its former drivers (plaintiff Lawson) In a long and detailed court opinion released February 8, 2018 by US Magistrate Judge Jacqueline Scott Corley, who ruled: "the Court [found] that Grubhub [had] satisfied its burden of showing that Mr. Lawson was properly classified as an independent contractor." The plaintiff Lawson was an aspiring actor who made ends meet with various day jobs and sued Grubhub in 2015. He argued that he should have been classified as an employee, not a contractor. The case was originally filed as a proposed class-action lawsuit, but that class action status was never allowed by the court. It is important to note that this case was a judge (court) trial not a jury trial
and was NOT a motion for summary judgment. Closing arguments in this
trial were heard in October 2017.
I highly recommend reading the full decision here as it's a good road map to follow in making the independent contractor employee determination. However part of why it's important not to read too much into individual cases was the judges finding that the Plaintiff was fundamentally "not credible.". Lawson, by his own admission, "gamed the Grubhub driver app". This credibility finding may have hurt the plaintiff in many ways.
I highly recommend reading the full decision here as it's a good road map to follow in making the independent contractor employee determination. However part of why it's important not to read too much into individual cases was the judges finding that the Plaintiff was fundamentally "not credible.". Lawson, by his own admission, "gamed the Grubhub driver app". This credibility finding may have hurt the plaintiff in many ways.
On the other hand the judge ruled "Grubhub did control some aspects of Mr. Lawson's work," by "determin[ing] the rates Mr. Lawson would be paid and the fee customers would pay for delivery services. While the Agreement states that a driver may negotiate his own rate, this right is hypothetical rather than real. The Court finds that Mr. Lawson could not negotiate his pay in any meaningful way and therefore this fact weighs in favor of an employment relationship."
This is a good example of the uncertainty involved in trying to determine employment status which is governed in California by the multi-factor test set forth in S.G. Borello & Sons, Inc. v. Department of Industrial Relations, 48 Cal.3d 341 (1989).
The Grubhub case likely has limited precedential value as each employee vs independent contractor determination relies heavily on the specific facts unique to the relationship between the worker and the employer/company. This is what makes these cases so difficult. They literally must all be decided by a trier of fact making the process very expensive and very uncertain for any employer who quite frankly has the deck stacked against it as well as large financial disincentives for litigating these matters.
Plaintiff's counsel did indicate there would be an appeal and was surprised that the federal court did not wait for the California Supreme Court in its anticipated decision in Dynamex Operations West, Inc. v. Superior Court. There the California Supreme Court has agreed to review a Court of Appeal decision that expanded the definition of “employee.” The lower Court of Appeal in Dynamex adopted the much-broader definition of “employ,” meaning “to engage, suffer or permit to work.” expanding the meaning of the term “employee,” to nearly every labor relationship a company would be likely to have.
Law Offices of Steven W. Hansen | www.swhlaw.com | 562 866 6228 © Copyright 1996-2013 Conditions of Use
This is a good example of the uncertainty involved in trying to determine employment status which is governed in California by the multi-factor test set forth in S.G. Borello & Sons, Inc. v. Department of Industrial Relations, 48 Cal.3d 341 (1989).
The Grubhub case likely has limited precedential value as each employee vs independent contractor determination relies heavily on the specific facts unique to the relationship between the worker and the employer/company. This is what makes these cases so difficult. They literally must all be decided by a trier of fact making the process very expensive and very uncertain for any employer who quite frankly has the deck stacked against it as well as large financial disincentives for litigating these matters.
Plaintiff's counsel did indicate there would be an appeal and was surprised that the federal court did not wait for the California Supreme Court in its anticipated decision in Dynamex Operations West, Inc. v. Superior Court. There the California Supreme Court has agreed to review a Court of Appeal decision that expanded the definition of “employee.” The lower Court of Appeal in Dynamex adopted the much-broader definition of “employ,” meaning “to engage, suffer or permit to work.” expanding the meaning of the term “employee,” to nearly every labor relationship a company would be likely to have.
Law Offices of Steven W. Hansen | www.swhlaw.com | 562 866 6228 © Copyright 1996-2013 Conditions of Use
