Court: GrubHub drivers are contractors

In the gig economy, the battle has intensified between companies that argue that workers such as Uber drivers are independent contractors and the workers themselves, who increasingly argue they should be classified as employees.

Now a federal judge in California has issued a ruling that sheds additional light on the divide that should delight gig economy businesses.

The case involved drivers who perform delivery services via GrubHub, the app-based food delivery service.

U.S. Magistrate Judge Jacqueline Scott Corley concluded that Grub-Hub’s drivers are independent contractors based on when, where and how frequently they performed door-to-door deliveries. Essentially, the drivers made those decisions, so it appeared to the judge that GrubHub had little control over their work.

The bottom line in most independent contractor classification cases is that the less control the company exerts over workers, the less likely they will be classified as employees.

For now, the decision only affects work performed in California. However, the California legislature historically has bent over backwards to help workers make the case that they are employees, not contractors. That makes this opposite conclusion all the more significant for businesses engaged in gig economy commerce.

In her opinion, Corley noted, “With the advent of the gig economy, and the creation of a low-wage workforce performing low-skill but highly flexible episodic jobs, the legislature may want to address this stark dichotomy.” (Lawson v. GrubHub, Inc., U.S. District Court, Northern District of California, 2018).

Final note: Six months ago, the Department of Labor withdrew Obama-era guidance that generally presumed a worker is an employee and not an independent contractor, unless proven otherwise. That makes it easier to classify a worker as an independent contractor, if that worker exercises discretion in how, when and where the work is performed.