GrubHub Gets a Taste of Drivers’ Labor Lawsuit
Q: Are on-demand, app-based drivers employees or independent contractors?
With fast food workers successfully protesting to receive a higher minimum wage, it should come as no surprise that other food industry workers would want to improve their own position in the workplace.
There have been several recent suits in California and elsewhere against ride-hailing giant, Uber, claiming the company misclassified its taxi-like drivers as independent contractors instead of employees in an effort to avoid paying its drivers benefits or giving them other protections which employee status would provide. Settlements so far have enabled Uber to avoid reclassification by making monetary and other concessions, but it remains to be seen how long these companies can continue to stave off these repeated challenges.
GrubHub and other similar app-based businesses likely saw the success of Uber’s business model and followed suit. Now these businesses are defending similar lawsuits challenging that business model.
GrubHub, like Uber, is an app-based business that hires drivers and classifies them as independent contractors instead of employees. Instead of transporting people, GrubHub drivers deliver food to people from businesses that don’t employ dedicated, on-site delivery drivers. You can also order food for pickup through GrubHub instead of calling the restaurant directly.
Drivers for GrubHub make many of the same arguments the Uber drivers have been asserting in similar suits–essentially that the level of control that the company exerts over them rises to the level of employer-employee rather than employer-independent contractor and as such, the classification and the associated benefits should change.
Specifically, the drivers have little independence in how they handle their job duties and no ability to set prices for their services. As independent contractors, they are responsible for their expenses, including gas, car maintenance, and insurance and are not entitled to guaranteed minimum wage, overtime, unemployment, or other benefits and protections to which workers classified as employees are entitled. Some claim they make less than minimum wage after paying their expenses. In many ways they have even less independence than Uber drivers. For example, GrubHub drivers must report for shifts and wait for deliveries where instructed to do so, must sign up in advance for shifts, and are told what to wear.
While the savings of classifying workers as independent contractors instead of employees can be substantial, litigating a classification challenge can be burdensome, so it’s best to consult with an Employment and Labor Law attorney with any questions on the classification of your workforce.
If you need an Employment and Labor Law attorney or need help with an Employment Litigation matter, Carico Johnson Toomey LLP is conveniently located right in the South Bay area of California and offers years of experience and expertise. Call (310) 545-0010.
Posted in: Blog