SAN FRANCISCO—The first trial over the status of “gig economy” workers drew to a close here, as a man who worked for GrubHub for several months seeks to prove that he should have been classified as an employee, not an independent contractor.
Shannon Liss-Riordan, representing plaintiff Raef Lawson, didn’t get 20 minutes into her closing argument when US Magistrate Judge Jacqueline Scott Corley interrupted her to say that her client was untruthful, and that her decision would reflect that. He produced a “fabricated resume,” and lied on an application to GrubHub that he submitted after filing the lawsuit.
Despite her harsh assessment of the plaintiff in the case, it’s not at all clear that GrubHub will prevail. On almost every point that would prove that he’s an independent contractor, Corley had tough questions for GrubHub lawyers.
The trial is underway because Raef Lawson, an aspiring actor who made ends meet with various day jobs, sued GrubHub in 2015. He said that he should have been classified as an employee, not a contractor. He’s suing for back wages, overtime, and expense reimbursement. Corley denied class-action status to Lawson’s case, but Lawson and his lawyer have persisted and are now concluding a trial. Their damage claim is small—less than $600. But a win for Lawson could set the stage for future, bigger litigation wins against GrubHub and other gig economy companies like Uber and Lyft.
Closing arguments today were a conclusion to a trial that was conducted over several days in September. It’s a bench trial, meaning it will be decided by the judge, not a jury. Unlike the common practice in a jury trial, the judge often interrupted both lawyers during their final arguments to ask questions, or dig down on particular issues.
“Undermine the plaintiff”
The test for who is an independent contractor and who is an employee is a complex one, but the most important factors boil down to how much control a worker has over his or her working life. Liss-Riordan began by pointing out that Lawson was fired in early 2016, and that kind of “at will” termination represents an employee relationship. She pointed to a recently decided California state appeals case, Linton v. DeSoto Cab。
“GrubHub didn’t really rebut the facts,” said Liss-Riordan. “Their focus seemed to be on trying to undermine the plaintiff, and his credibility—trying to claim that he was a bad worker. That made for good news headlines for GrubHub but I’m not sure how that helped prove its case.”
She went on to say that Lawson’s testimony had been “credible,” but then was interrupted by Corley.
“I’m going to have to stop you on ‘credibility,'” said Corley. She continued:
In this case, he produced a fabricated resume. He represented that he got his degree from this three-year program, which he did not complete. That’s dishonest. Number two, while this case was ongoing, he applied again to work for GrubHub. I don’t know why. He used a different name, a different email address, and when he was asked whether he had worked for GrubHub before, he said no. So I do have an issue with his credibility. I know he’s willing to not tell the truth.
“We’ve seen plenty of cases where people lie on resumes to get a job,” Liss-Riordan said.
“It may be a fact of life, and it happens, but it shouldn’t happen,” Corley responded. “I’m telling you, that’s a really big misrepresentation. From someone who was, obviously, educated.”
Moving on, Liss-Riordan laid out what she saw as the evidence that GrubHub exercised control over its workers. In addition to the fact that he was terminated with no explanation, Lawson was paid, for nearly every shift, what amounted to an hourly wage, she argued. (GrubHub drivers signed up in “blocks” of time that they agreed to be online; how much enforcement of those blocks took place was a matter of debate during the trial.)
Corley pointed out that, according to Lawson’s agreement, he was getting paid by the delivery. It amounted to an hourly wage only because he got “trued up” when his delivery income was low—because Lawson sometimes did few deliveries. Corley also noted that the mere fact that he was terminated doesn’t mean that he wasn’t a contractor.
“Let’s take an example no one disputes, like an architect,” Corley said. “They still have to do what they promised to do. And if they don’t do it, and I terminate them somehow, that doesn’t make them an employee. Just because you’re required to do things doesn’t make you an employee.”
“You do need to look at this wholistically,” Liss-Riordan said. “Part of this is framing. The other way to look at it is, they were offered a rate of pay, and if they didn’t meet certain standards, they got docked.”
“Why should I look at it that way?” Corley asked.
Accused of “True-up Fraud”
Taking the podium for GrubHub, attorney Michelle Maryott pointed out that Lawson had control over the most important element of a job: how much to work, or whether to work at all.
“There’s no question about what happened when Mr. Lawson didn’t use the app for 2 months after signing up,” Maryott said. “There was no contact whatsoever. He acted like GrubHub didn’t even exist for two months. And you know what? That was fine.”
Lawson toggled his availability to “on” whenever he felt like it, often blowing off the time blocks he’d agreed to work. He was late to “toggle on,” indicating he was available to take a delivery, 48 out of 87 times. During 11 of those blocks, he toggled on more than 2 and a half hours after he said he would.
Corley grilled Maryott about the nature of Lawson’s termination, which had some similarities to “at-will” employment relationship. The recent Linton case, which had to do with a cab driver who was terminated, “made it very clear that the at-will nature of the right to terminate has ‘inordinate importance,'” Corley said. “The plaintiff cab driver got no evidence of an investigation, no chance to respond. It was a right to terminate, at will, and that weighed in favor of him being an employee.”
“There’s no evidence that Mr. Lawson’s contract was terminated for any reason other than breach,” Maryott said. “Mr. Lawson never had any obligation to sign up for a block. But once he did, GrubHub could fairly expect him to live up to his end of the bargain. He didn’t.”
Lawson could decide where to work, when to work, and how to work, she continued. He was able to choose the GrubHub “zone” that he worked in, although the zones themselves were defined by the company.
Maryott compared the Lawson case to the facts in two other California cases. One was a case about telemarketers, Jones v. Royal Administration Services, in which the court found the plaintiff was a contractor, and Alexander v. FedEx, in which the court overturned a finding that the plaintiff was a contractor.
In the Jones case, the telemarketing company let workers set their own hours, gave no quotas, and there was a mutual termination clause. The defendant company also required workers to record logs of their interactions, use its scripts and materials, and it maintained a training facility—all things that GrubHub didn’t do.
Then she came back to how Lawson gamed the app system. In one situation, it took him an hour to register that he completed a delivery, in which the customer was just a few minutes’ drive away.
In one slide, Maryott displayed evidence of what she called “Mr. Lawson’s True-Up Fraud.” She added up 14 work days, in which Lawson selected 59.7 hours of blocks, but only indicated that he was “available” for about 20 hours. During that time, he did 7 deliveries. Because of the “true-up” payments, he earned $676.65, or about $96.66 per delivery. He also went away from his zone and selected “airport” mode for hours at a time, she said.
“We’re not saying that Mr. Lawson’s fraud was okay under the contract,” said Maryott. “That was a breach. But it’s also evidence of lack of monitoring and supervision.”