A former Grubhub Inc. driver in Los Angeles won a federal court ruling that won’t make him rich but may have a big impact on the gig economy.
“Raef Lawson is the first gig worker in America to be declared an employee by a court for wage law purposes,” said the driver’s lawyer, Shannon Liss-Riordan.
US Magistrate Judge Jacqueline Scott Corley ruled Thursday that the aspiring actor was in fact a Grubhub employee, not an independent contractor, when he briefly drove of the food-delivery service in 2015 and 2016. She ordered Grubhub to pay him $65.11 for minimum wage violations but said he was due nothing on overtime because he hadn’t worked more than 40 hours in any one week.
The eight-year-old case has been closely watched in the gig economy industry. Experts have said the outcome may determine whether drivers qualify under California’s law to be reimbursed for their personal vehicle expenses and make claims retroactively.
Grubhub disagrees with the judge’s ruling and is considering its legal options, Theane Evangelis, counsel for Grubhub at Gibson, Dunn & Crutcher LLP, said in an emailed statement. Evangelis cited Proposition 22, a measure passed by California voters in 2020 that allowed Uber, Lyft and other platforms to classify their workers as independent contractors.
“Thanks to Prop 22 — which California voters overwhelmingly enacted and the California Court of Appeal recently upheld — drivers who use the Grubhub app will continue to enjoy the freedom and flexibility of working as independent contractors,” Evangelis said.
Grubhub maintains that Lawson and its other drivers aren’t employees because they set their own hours and operate more like free-standing businesses.
But Corley disagreed, finding that the driver met California’s definition of an employee in several ways, including that his work for the company was “not outside its usual course of business.”
The judge said Lawson was required to be available and in a certain area to accept incoming delivery offers.
“This time primarily benefitted Grubhub because it helped Grubhub fulfill on-demand deliveries and meet restaurant demand around mealtimes,” the judge wrote. “The time did not primarily benefit Mr. Lawson because it was not an optional service instituted to benefit him or other drivers.”
--With assistance from Josh Eidelson.
©2023 Bloomberg L.P.
