A federal judge on Thursday ruled that Grubhub delivery drivers are independent contractors and not employees of the Chicago-based food delivery company.
U.S. Magistrate Judge Jacqueline Scott Corley in San Francisco ruled that a gig-economy driver doesn’t receive the same protections that employees do under California law, according to official court documents filed Thursday. The ruling could influence the way other gig-economy companies, like Uber, operate.
The case was originally brought against Grubhub by Raef Lawson, who lives in Los Angeles and worked as a food-delivery driver for the company for only four months. He claimed in his lawsuit that the company violated California labor laws by paying him below minimum wage and not reimbursing his expenses or paying him for overtime work.
“Under California law whether an individual performing services for another is an employee or an independent contractor is an all-or-nothing proposition,” Corley wrote in the court documents. “If Mr. Lawson is an employee, he has rights to minimum wage, overtime, expense reimbursement and workers compensation benefits. If he is not, he gets none. 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.”
Grubhub, founded in 2004, operates in 1,200 markets in the U.S., 250 of which are in California. According to court documents, there were about 4,000 Grubhub delivery drivers in the state as of June 2016.
