In the first lawsuit of its kind to make it to trial in California, Grubhub fought allegations of misclassifying its drivers as independent contractors instead of employees. Other worker misclassification lawsuits in the past have been resolved via settlements.
The Lawson v. Grubhub case was filed in a San Francisco federal court in December 2015. Plaintiff Raef Lawson formerly worked as a driver for the food delivery startup for five months starting in October 2015. He claimed he was underpaid because he was classified as an independent contractor instead of an employee. Lawson also said Grubhub owed him overtime pay and reimbursements for business expenses.
The Grubhub trial’s outcome could have a big impact on the employment status of workers in the fast-growing gig economy. It could set a precedent for other similar lawsuits. The case has received substantial attention due to its implications for on-demand companies such Uber, Lyft, Postmates and Doordash that rely on independent contractors.
One of the key factors considered in the case was the amount of control Grubhub had over Lawson and other drivers. Lawson’s attorney noted that the company tracked his location, told him to wear a Grubhub hat and shirt, and required him to accept almost all deliveries in under 20 seconds.
However, Grubhub maintained that the company did not have control over Lawson. He was free to set his own hours, wear anything he wanted and take the routes of his choice for deliveries, among other factors.
In addition, Grubhub argued food delivery is not a core part of its business. The company said it simply connects customers with restaurants. This aspect is likely to be significant in determining whether the drivers are considered independent contractors or employees.