A federal magistrate judge ruled on February 8 that a GrubHub driver was an independent contractor and not an employee under California law. Thus, the driver does not qualify for minimum wage, overtime, or employee expense reimbursement. Lawson v. GrubHub (US District Ct, N Dist California 02/08/2018) [PDF].
This case will be a bellwether for the Gig Economy – Uber, Lyft, etc.
The judge considered a number of factors, but GrubHub's right to control work details was the most important.
Right to control the manner and means of accomplishing the result desired: GrubHub did not control how he made the deliveries—whether by car, motorcycle, scooter or bicycle. GrubHub also did not control Lawson’s appearance. Lawson was not required to have any GrubHub signage on his car. Lawson, rather than GrubHub, controlled whether and when Lawson worked, and for how long. Lawson had complete control of his work schedule. GrubHub could not make him work and could not count on him to work. GrubHub also did not control how and when Lawson delivered the restaurant orders he chose to accept.
Distinct Occupation or Business: Lawson was not engaged in a distinct occupation or business, which weighs in favor of being classified as an employee.
Whether the Work is Performed Under the Principal’s Direction or Supervision: Lawson did not have a supervisor. He did not report to anyone at GrubHub; indeed, he never met in person with anyone at GrubHub.
The Skill Required in the Occupation: Anyone with a means of delivery can contract to deliver for GrubHub. No special skills are needed.
The Provision of Tools and Equipment: Lawson provided his own mode of transportation, his own smart phone, and could even provide his own insulated food bags.
Length of Time for Performance of Services: GrubHub did not count on its relationship with its drivers being permanent. Lawson could sign up for blocks of time when he wanted and not sign up when he did not want to deliver, without any penalty of any kind.
Method of Payment: In practice GrubHub paid Lawson by the hour, so it weighs slightly in favor of an employment relationship.
Whether the Work is Part of GrubHub’s Regular Business: While food delivery is not GrubHub’s only or primary business, it is a regular part of its business in Los Angeles, so this factor favors an employment relationship.
The Parties’ Intent: This was "neutral," according to the judge.
So, some minor factors tilted toward classification as an employee, and most (especially the big one – right to control) tilted toward classification as an independent contractor.