Grub-Hub Drivers Officially Ruled Contractors and The Gig-Economy is Taking Notice

A recent ruling declared Grub-Hub drivers independent contractors officially and the gig-economy is taking notice. The ruling has the potential to affect Uber litigation as it is also hinging on employment status questions. The significant court decision was handed down by a federal judge asked to rule whether drivers for GrubHub Inc. are actually independent contractors or employees. Since Uber Technologies Inc. has a similar business model that depends on pairing customers with products/services through a smart phone app, it’s not surprising that employment law litigation facing both parties includes similar issues.

The first of its kind ruling was delivered by U.S. Magistrate Judge Jacqueline Scott Corley in San Francisco. According to the ruling, a gig-economy driver does not qualify for employee protections under California law. Her ruling was based on her interpretation of California law on the matter. She did note that the law, as it stands, is an all-or-nothing proposition and the advent of the gig economy’s low wage workforce engaging in low skill, high flexibility, episodic jobs may mean the legislature will need to readdress the issue. 

The GrubHub suit was filed by Raif Lawson. Lawson worked as a food-delivery driver for less than six months while he pursued an acting/writing career. He claimed GrubHub violated California labor laws by not reimbursing him for expenses, failing to pay minimum wage and failing to pay overtime pay for hours worked in excess of either per day or 40/week.

Determining whether Lawson was an independent contractor or an employee hinged on pinning down how much control GrubHub exerts over their drivers’ work lives. GrubHub argued that Lawson held the reins as he decided when, where and how frequently he performed deliveries. Lawson’s attorney contended that GrubHub exerted control over drivers by expecting them to be available to accept assignments during shifts they sign up for and to remain in prescribed geographical regions.

GrubHub is happy with the ruling, as are many other gig-economy front runners facing similar litigation and questions of misclassification. They feel the ruling validates the freedom that GrubHub drivers enjoy. They also stated that the would make sure drivers would retain the advantage of flexibility that made working with GrubHub advantageous.

If you have questions about misclassification in the work place or if you need the help of an experienced California employment lawyer, get in touch with Blumenthal Nordrehaug Bhowmik De Blouw LLP.

California Supreme Court and Questions Defining “Employers” Liable for Wage Violations

Ramifications of Ayala v. Antelope Valley Newspapers could result in changes for California workers. The California Supreme Court unanimously affirmed a Court of Appeal decision that reversed the denial of class certification in the independent contractor misclassification case. Judge Werdegar, Justice Baxter and Justice Chin all concurred that the Court of Appeal correctly reversed the trial court decision that denied certification in the case of Ayala v. Antelope Valley Newspapers. In the case, Newspaper delivery workers filed against a daily newspaper. They were classified as independent contractors and as such, were denied minimum wage payment, overtime pay, minimum rest and meal period premiums, as well as employer contributions toward Social Security.

The trial court held that there were too many individual inquiries necessary in order to determine how the various newspaper delivery workers handled their day to day operations, but the Supreme Court felt that the trial court missed the point of the case: whether a common law employer/employee relationship exists dependent upon the degree of the hirer’s right to define/control the relationship or how the end result is actually achieved. The Supreme Court further explained their decision by pointing out that while there was evidence of variation in work habits between newspaper carriers, which supports claims made by Antelope Valley’s position that they didn’t control their carriers’ work, this fact didn’t negate the actual question at hand. How much right does the employer (Antelope Valley) have to control what their carriers’ do?

This case reinforces the common proof method that turns to governing contracts: a common method used to determine the answer to the independent contractor vs. employee question. The Court has pointed out that at the certification stage, the form contract’s importance is not particularly in what it says, but in what degree of control it defines and whether it is uniform across the class.

Countless California workers are misclassified as independent contractors even though their employers retain control of their working conditions. If you are one of these California workers and you’d like to join with fellow workers to address the issue of misclassification claims, contact Blumenthal, Nordrehaug & Bhowmik. There’s precedence in the legal system that empowers you to raise your wage claim.