Gig Worker Found to Be Independent Contractor in First-of-Its-Kind Ruling
Author: Michael Cardman, XpertHR Legal Editor
February 14, 2018
A restaurant delivery driver for the online food-ordering company Grubhub was properly classified as an independent contractor under California law, a federal court has ruled.
Although there is no official definition of gig economy, the United States District Court for the Northern District of California's ruling in Lawson v. GrubHub appears to be the first of its kind involving on-demand work facilitated by a digital platform.
The ruling marks a promising victory for Grubhub and provides helpful examples of practices that can help other companies with similar business models to limit the risk of a misclassification. However, it is hardly the last word on the classification of gig workers.
There are many different tests for determining whether a worker is an employee or an independent contractor, which vary depending on the law(s) in question (for example, the tax code, unemployment insurance, workers' compensation or, in this case, wage and hour) and on the jurisdiction where the work was performed (in this case, California).
Courts examine all of the circumstances as a whole, and no single factor is determinative. As a result, classification can sometimes turn on seemingly small differences in the facts at hand - and another court could find that gig workers very similar to the delivery driver in the Lawson ruling should be classified as employees rather than independent contractors.
In deciding the Lawson case, the Northern District of California court applied a test established by the California Supreme Court. Several factors are considered under this test, but, as the court observed, the "principle test of an employment relationship is whether the person to whom service is rendered has the right to control the manner and means of accomplishing the result desired."
Although some of the factors weighed in favor of an employment relationship, other factors persuaded the court that the plaintiff driver was an independent contractor, not an employee. Among them were Grubhub's lack of control of:
- The driver's mode of transportation (for example, by car, motorcycle, scooter or bicycle) or the condition of the mode of transportation he chose;
- The driver's appearance;
- The driver's training;
- Whether and when the driver worked, and for how long; and
- How and when the driver delivered the restaurant orders he chose to accept (Grubhub did not specify an amount of time in which a driver had to reach a restaurant to pick up an order nor how quickly the driver had to complete the delivery).