No overtime, no workers’ comp for Grubhub drivers, says California judge

For that reason, among others, Lawson said he wasn’t an independent contractor, but a Grubhub employee—someone whose work was controlled by a boss. So in a pre-trial briefing in August, Lawson asked the company for the benefits the state requires for employees: overtime pay, reimbursed business expenses, and backpay for days he worked and didn’t meet minimum wage. (Under California law, you’re either an employee, or you’re not. Part-time and full-time status doesn’t affect eligibility for those benefits.)

But in its Thursday ruling, the U.S. District Court for the Northern District of California said Lawson’s contractor classification had been correct. According to Bloomberg Law, Grubhub’s attorneys successfully argued that the company wasn’t a traditional employer. All the company does is connect customers, restaurants and drivers. The judge found that Lawson had control over how he made his deliveries, which included the hours he worked, and could wear whatever he damn well pleased. (The full text of the ruling is here.)

That’s a big deal because it’s the first time a gig economy contractor has been found not to pass the Borello test at trial. That’s a common-law standard in California, established by a case heard in the state Supreme Court in 1989. The essential question of that test is whether or not the person, or the employer, is controlling how the work is done. It also examines whether the work performed is part of the company’s regular business, if it requires a special skill, and whether or not it can be performed without the involvement of the employer.

Rather than face that standard, the major delivery companies have generally opted to settle out of court, as more workers sue them over their classifications. Settlements have been the norm, no matter the state. In 2016, Uber reached a $100 million settlement with 385,000 drivers in New York to continue to classify them as contractors, and last year, Postmates settled with couriers on both coasts for $8.75 million. Shannon Liss-Riordan, the attorney who represented plaintiffs in those cases, and has become something of a specialist in challenging the food-delivery industry, is also representing Raef Lawson.

This first ruling isn’t likely to be the end of things. Lawson plans on appealing his case, and by the time it reaches the appellate court, the lay of the land may have shifted. As his attorney notes, another case challenging employee classification is currently being heard in the state’s high court—and that one may reach a different conclusion. In that case, which concerns the plight of Dynamex couriers, the judge is using a different standard known as the ABC test. It’s three questions long, hails from New Jersey, and compared to the 12-factor Borello test, is labor-friendly: It assumes workers are employees until proven otherwise.

If the couriers win, and the more protective ABC test prevails in the high court, the case could set a precedent for employee classification in California. If that happens, then Lawson stands a better chance at winning his appeal, and from there, the floodgates could open, allowing even more drivers to say they’re not deliverypeople—they work for Grubhub.