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.

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

California Proposition 65 regulations amended to require more specificity on warnings

On August 30, 2016, (yes a year ago) the California Office of Administrative Law approved the adoption of amendments to Article 6, "Clear and Reasonable Warnings", of the California Code of Regulations.  This was a regulatory "repeal and replace" and not a legislative one so as a result it was further off the news "radar". The new regulations provide, among other things, methods of transmission and content of warnings deemed to be compliant with the Safe Drinking Water and Toxic Enforcement Act of 1986 (Prop. 65). Prop 65 regulations are promulgated by the Office of Environmental Health Hazard Assessment (OEHHA) which also maintains the Prop 65 chemical list and is one of 6 agencies under the California Environmental Protection Agency (CalEPA).

Most companies already know that any consumer product sold in California must comply with Proposition 65, meaning that their products sold in California cannot contain harmful amounts of the chemicals on its notorious 800 chemical list (and growing). Its important to keep in mind that this list continues to grow and is much more extensive than the EU REACH law/regulation (which currently lists only about 200 chemicals). Its also much more extensive that the US Consumer Product Safety Commission's (CPSC) regulations which are mostly confined to lead and Phthalates. There has been quite a bit of publicity surrounding Monsanto's futile legal efforts to keep RoundUp weed killer off the Prop 65 list.

The difficulty with the new warning requirement (which does not go into effect until August 30, 2018) is that if you test and if you find something on the list in your product you must now have specific "safe harbor" warnings that include any of the 800 chemicals on the list that might be in your product in harmful amounts. Under the old abolished regulations you could utilize a "safe harbor" (provision of a statute or a regulation that specifies that certain conduct will be deemed not to violate a given rule) warning that did not need to specify which of the 800 chemicals on the list might exist in the product. Now of course one can debate the merits of warnings generally, especially the efficacy of one that lists the offending complex chemical name over one that does not, but we don't have enough space on this post to have that debate. The point is this is now the current state of the law and my advice is to try to steer clear of Prop. 65 suits (just like ADA suits and host of others). Also these warnings cannot exist solely in user's manuals unless you are a vehicle manufacturer who got special dispensation under the new regulations (but even they still must have stand alone warnings)

The other interesting issue is that if your company was part of a settlement of a Prop 65 suit. Under the new law a company that is a party to a court-ordered settlement or final judgment establishing a warning method or content, is deemed to be providing a “clear and reasonable” warning for that exposure for purposes of the new law, if the warning fully complies with the order or judgment. This covers a few companies in the bicycle arena. It's not known how many total companies are exempted by this as that would depend a lot on the terms of the settlement and (I assume) the chemicals ("the exposure") involved in that particular suit.

Clearly there is going to be lots of work ahead in the next year for all consumer product manufacturers, brands, distributors, resellers, and retailers (on line and off). You can be sure Amazon, Walmart and all the big retailers are well aware of these issues and they will surely come up in contract negotiations with sellers to most large retailers.

Law Offices of Steven W. Hansen | www.swhlaw.com | 562 866 6228 © Copyright 1996-2013 Conditions of Use

List of California legislation (bills) that became Law in 2016

We recently became curious as to the comprehensive list of legislation signed and vetoed in California in any given year. We then set out to find a comprehensive list not limited to any particular subject matter (or just the "popular bills" the media liked) and low and behold we could not find one (at least available to the public). Governor Browns office also does not issue a comprehensive yearly list but rather issues many press releases throughout the year listing all the bills signed or vetoed on a particular day. Most of these press releases contain many bills. Some only a few. 

In 2016 the Legislature sent Governor Brown 1,059 pieces of legislation, 898 of which the governor signed into law. He vetoed 159 and two become law without signing. We show 5,103 bills were introduced in the State Legislature. Only 20.75% of the bills made it to the Governor's desk and only a mere 17.6% were signed and became law. If we assume each bill is an average of 7 pages long (and some are much longer) that would be about 6,300 pages of new laws! Happy reading! Some of these are real gems.....only became possible through the hard work of lobbyists and special interests! Quite frankly I'm pretty impressed with our 78 year old Governor's ability to wade thru this mess. Having a full time state legislature (unlike most states) is quite frankly both a blessing and a curse.

Now keep in mind that this list is only "legislation" signed or vetoed in 2016. It does NOT include changes in the California administrative code (non legislative) and related "codes" passed by State agencies. Nor does it include voter initiatives passed in 2016. Nor does it include cases decided by the various appellate level courts in California that can greatly affect how a given law is interpreted or enforced, or create all new obligations in and of themselves ("Judicial law" or precedent). This also does not include local laws or ordinances passed by various California counties (58) or other municipalities (482) or other governmental entities. Finally this list only includes laws passed or vetoed in 2016. Some of these take effect January 1, 2017 (typically) but many may not take effect until later or some even earlier (rare). Also keep in mind there are laws passed in 2014-2015 that may just now be taking effect in 2017.

There really is something in this 37 page list for everyone. We were not able to put it in chronological order due to the fact that it was hard enough to avoid duplication with the many press releases that came out in a 12 month period. The order signed is also really not important. What is important is the date the law becomes effective, which can vary for each piece of legislation. The veto and signing statements are hyperlinked in the list but the legislation passed/signed is not. The fastest way to look it up is by typing in the bill number here and making sure you have the right year (2016). Let us know if you see any duplicative entries or if you think we have missed something. The last date anything was signed or vetoed was September 30, 2016 and we are not aware of anything still pending on the Governors desk as of this writing.

Law Offices of Steven W. Hansen | www.swhlaw.com | 562 866 6228 © Copyright 1996-2016 Conditions of Use