GrubHub Prevails in Contractor Classification Suit

GrubHub Prevails in Contractor Classification Suit

US Magistrate Judge Jacqueline Scott Corley issued her ruling on Thursday in a case brought against GrubHub late last year by former food delivery driver Raef Lawson, who claimed that the company’s gig economy business model had violated his rights as an employee under California law. Corley was not persuaded, however, by Lawson’s argument that GrubHub exerted enough control over when and how he worked for him to qualify as an employee and instead found that the company was correct to treat him as an independent contractor, TechCrunch’s Megan Rose Dickey reports:

A key element of the case centered around the Borello test, which looks at circumstances like whether the work performed is part of the company’s regular business, the skill required, payment method and whether the work is done under supervision of a manager. The purpose of the test is to determine whether a worker is a 1099 contractor or a W-2 employee.

On the basis of the Borello standard, Corley concluded that “GrubHub’s lack of all necessary control over Mr. Lawson’s work, including how he performed deliveries and even whether or for how long, along with other factors persuade the Court that the contractor classification was appropriate for Mr. Lawson during his brief tenure with GrubHub.” She also expressed concerns over Lawson’s honesty, noting that he misrepresented his education in his résumé and “intentionally manipulated the app to get paid for not working,” undermining the credibility of his testimony.

Being the first to weigh in on whether gig economy workers enjoy rights as employees, Corley’s ruling could set a precedent with implications for other gig economy companies. However, as Dickey notes, the judge hesitated to cast her ruling as dispositive with regard to the gig economy as a whole:

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GrubHub Is Latest Gig Economy Company to Defend Business Model in Court

GrubHub Is Latest Gig Economy Company to Defend Business Model in Court

In a San Francisco courthouse, US Magistrate Judge Jacqueline Scott Corley recently heard closing arguments in a case brought against GrubHub by former food delivery driver Raef Lawson, challenging the platform’s gig economy business model and claiming protections for drivers as employees under California law. Corley’s ruling in this case is highly anticipated, as she will be the first US judge to weigh in on whether gig economy workers like Lawson have a right to those protections—while Uber and Lyft have both faced similar lawsuits, both of the ride-sharing platforms settled these disputes out of court.

Lawson is represented by Shannon Liss-Riordan, the same Boston-based attorney who pressed the cases of the Uber and Lyft drivers and is also challenging the independent contractor status of gig economy workers at other platforms. SF Gate’s Joel Rosenblatt looked in on the GrubHub case last week:

As the first case of its kind in the U.S., the GrubHub trial “will inevitably be treated as a bellwether,” said Charlotte Garden, an associate law professor at Seattle University. “That’s especially true because the lawyers in this case are also involved in other larger and higher profile misclassification cases, including the Uber case,” said Garden, who has followed the Uber litigation closely.

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