Win for Business Owners: GrubHub’s Drivers Are Independent Contractors
In its decision late last week in Lawson v. Grubhub, Inc., the U.S. District Court for the Northern District of California found that Grubhub’s classification of its drivers as independent contractors is completely valid.
Under the Borello test, the court stated that Grubhub’s drivers were properly classified because: (1) it did not control how deliveries were made or whether its drivers accepted or declined deliveries; (2) it did not require its drivers to work a minimum number of hours; (3) it did not force its drivers to wear Grubhub’s uniform; (4) the drivers had no supervisor or boss at Grubhub; and (5) the agreement with the drivers was short-term. It is important to note that even though the court found the drivers to be independent contractors, Grubhub still relied on the drivers as a major part of its business, performed background checks, determined the rates its customers’ paid, determined driver pay based on hours (not service-based), and could terminate the driver at-will.
As California courts continue to clarify how it will analyze whether hiree’s are employees or independent contractors, each analysis is fact-specific and dependent upon the circumstances surrounding the relationship between a business and its contractors.
It is very important for you to discuss whether your independent contractors are properly classified. Contact the attorneys at Chauvel & Glatt, LLP to set up a time to discuss whether your independent contractors are properly classified so you remain California compliant.