Earlier this month, a federal District Court in the Northern District of California decided Lawson v. Grubhub. The case examined the employment status of an individual working for Grubhub, a growing player in the new "gig economy." Grubhub, an internet food ordering service, connects diners to local restaurants. Customers order food through Grubhub’s online platform, and Grubhub transmits the orders to restaurants. The food is then delivered either by a restaurant delivery person or a Grubhub driver. The Plaintiff in the case worked as a GrubHub driver and claimed that he was misclassified by Grubhub as an independent contract rather than an employee. In doing so, the Plaintiff alleged that GrubHub violated California’s minimum wage, overtime, and expense reimbursement laws. He brought the case as a PAGA action on behalf of himself and other aggrieved employees. The court applied California’s common law Borello test and ultimately found that the Plaintiff was not an employee of Grubhub.
Under S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal. 3d 342, “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.” (Borello at 350.) In addition to the principle test, a court may examine a series of secondary factors, which include the following: (a) whether the one performing services is engaged in a distinct occupation or business; (b) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision; (c) the skill required in the particular occupation; (d) whether the principal or the worker supplies the instrumentalities, tools, and the place of work for the person doing the work; (e) the length of time for which the services are to be performed; (f) the method of payment, whether by the time or by the job; (g) whether or not the work is a part of the regular business of the principal; and (h) whether or not the parties believe they are creating the relationship of employer-employee. (Borello at 351.)
Applying this test, the Court noted that Grubhub exercised little control over the details of the Plaintiff’s work during the four months he performed delivery services. Grubhub did not control how he made the deliveries—whether by car, motorcycle, scooter or bicycle. It also did not control the condition of the mode of transportation the Plaintiff chose. Grubhub never inspected or even saw a photograph of the Plaintiff’s vehicle.
The Court also noted that Grubhub did not control the Plaintiff’s appearance while he was making deliveries. He was not required to wear a uniform or have any signage on his vehicle. The Court contrasted the Plaintiff’s claims against other cases in which the employer was found to exercise control over an employee by requiring the employee maintain a certain appearance. (Ruiz v. Affinity Logistics Corp. [2012 9th Cir.] 754 F.3d 1101 [defendant exercised control of detail of drivers’ work by requiring them to wear uniforms and prohibiting them from wearing earrings, displaying tattoos, or having certain facial hair]; Alexander v. FedEx Ground Package Sys. [2014 9th Cir.] 765 F.3d 989 [employer controlled drivers clothing from their hats down to their shoes and socks and required drivers to be clean shaven, hair neat and trimmed, and free of body odor].)
The Court additionally noted that Grubhub provided no training or guidelines regarding drivers' interactions with customers. It had no control over who was allowed in the Plaintiff’s vehicle while he made deliveries. The Plaintiff could also control when he worked. Furthermore, when he was working, he did not have to accept delivery requests from Grubhub.
According to the Court, Grubhub also did not control the manner in which the Plaintiff made deliveries. It did not specify how fast the Plaintiff needed to pick up and deliver food. It did not specify the route the Plaintiff was required to take or whether he was allowed to make stops. While there was evidence that Grubhub terminated its delivery contract with a couple of drivers for routinely taking well more than an hour to make deliveries, the Court noted that such control was over the result (i.e. the timely and professional delivery of restaurant meals). There was also evidence that the Plaintiff was able to manipulate the manner in which Grubhub paid its drivers. By logging into the Grubhub app for a small portion of the Plaintiff’s scheduled driving time, it allowed him to earn money even though he occasionally made zero or few deliveries during his shift. The Court saw that the ability to manipulate the app and still be paid further illustrated Grubhub’s lack of control over the Plaintiff.
The Court additionally analyzed whether Grubhub had the ability to terminate the Plaintiff at will and the remaining secondary factors of the Borello test. Nonetheless, the Court ultimately determined that the Plaintiff was an independent contractor given the lack of the employer’s control over the Plaintiff.
It is important to note that, although this case is not binding on future decisions, the analysis is illustrative of how other courts may analyze similar claims for workers in other areas of the gig economy.