As readers of this blog know, we are right in the midst of one of the most significant legal developments for the gig economy. For the first time, a judge is being asked to definitely decide at trial whether a typical on-demand worker is correctly classified as an independent contractor or whether he is actually an employee. The two-week trial started last week, the Tuesday after Labor Day, and apparently there have been some interesting developments in the proceedings so far.
GrubHub, the food delivery app, has been in a legal battle with a former delivery driver over the driver’s classification as an independent contractor since 2015. Initially filed as a class action in state court in San Francisco, the case was removed to federal court where U.S. Magistrate Judge Jacqueline Corley of the Northern District of California ruled in 2016 that the case would not proceed as a class action. In the most recent news from the case, Judge Corley indicated that the case will proceed to a bench trial on the key issue of whether the driver was properly treated as an independent contractor or whether the driver should have been a W2 employee. Like Lyft and Uber, GrubHub utilizes on demand workers – who are treated as independent contractors – through smartphone apps. So a trial decision in the GrubHub case would certainly have a major impact on these and other gig-economy companies.
Gig employers returning from the Fourth of July holiday were in for a rude awakening when they learned about the fireworks that just went down in a California federal court. Right before the holiday weekend, Judge Jacqueline Scott Corley denied GrubHub’s request to have a misclassification case tossed from court. She has now scheduled it for a bench trial to begin September 5. At stake: a decision from a federal judge about whether those who perform work for one of the largest on-demand companies are independent contractors or employees.