In Raef Lawson v. GrubHub Inc., a closely watched case regarding worker classification in the gig economy, a California federal court judge ruled in favor of food delivery service GrubHub, finding that delivery driver Lawson was properly classified as an independent contractor and was not an employee nor was he entitled to wages and benefits associated with employee status, primarily because the company’s right to control its drivers’ work is limited. This includes little or no control over choice of vehicle, appearance, training, scheduling, and performance evaluation. However, the judge did identify certain secondary factors that could constitute an employee-employer relationship, such as the fact that drivers were paid by the hour, and that their primary function — to deliver food — was also a primary part of the company’s business.
While the ruling applies only to California, it is still of interest for any company that uses an independent contractor or freelance model, or incorporates contingent workers into its employment strategy, as well as a reminder to consider carefully how this part of your workforce is structured as the gig economy evolves.
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