Grubhub Independent Contractors

Judge Rules Grubhub Drivers Independent Contractors Not Employees

In a significant court decision on the status of gig-economy workers, U.S. Magistrate Judge Jacqueline Scott Corley concluded on February 8, 2018, that drivers for Grubhub Inc. are independent contractors and not employees under California law. The ruling may have implications for other sharing economy companies, including Uber and Lyft, whose business models are built on pairing customers with products and services through apps while avoiding the personnel costs of traditional employment.

Lawson v. Grubhub Inc.
The case against Grubhub was brought by Raef Lawson, who worked as a food-delivery driver for less than six months while pursuing a career as an actor and writer. In 2015, Lawson sued Grubhub claiming the company violated California labor laws by not reimbursing his expenses, paying him less than minimum wage and failing to pay overtime. Lawson claimed he should have been classified as an employee, not a contractor.

The case was originally filed as a proposed class-action lawsuit, but the judge never granted that status, so it was only limited to him and his claimed $600 in damages–consisting of back wages, overtime, and expense reimbursement. Both sides had agreed that Judge Corley, rather than a jury, would decide the case in her San Francisco federal courtroom. Closing arguments were heard in late October 2017.

Borello Test
A key element of the case centered around the Borello test, which is used to determine whether a worker is a 1099 contractor or a W-2 employee. The Borello test considers workplace circumstances like whether the work performed is part of the company’s regular business, the skills required to do the job, payment methods, and whether the work is done under the supervision of a manager.

Elements of the case in Lawson’s FavorGrubhub Independent Contractors “Grubhub did control some aspects of Mr. Lawson’s work,” Judge Corley commented. “Grubhub determined the rates Mr. Lawson would be paid and the fee customers would pay for delivery services. While the Agreement states that a driver may negotiate his own rate, this right is hypothetical rather than real. The Court finds that Mr. Lawson could not negotiate his pay in any meaningful way and therefore this fact weighs in favor of an employment relationship.”

Elements of the case in Grubhub’s Favor
In Judge Corley’s estimation, in addition to working for other gig economy companies while simultaneously working for Grubhub, Lawson was fundamentally “not credible.” By his own admission, Lawson “gamed the app” by scheduling himself for a work shift (a “block” in company parlance) but received few, if any, actual delivery orders by putting his phone in airplane mode, among other tactics.

“Mr. Lawson’s claimed ignorance of his dishonest conduct is not credible,” Judge Corley wrote. “Mr. Lawson would remember if after he filed this lawsuit against Grubhub he cheated Grubhub. If he had not moved his smart phone to airplane mode, intentionally toggled available late, or deliberately engaged in other conduct to get paid for doing nothing he would have denied doing so at trial. But he did not.”

Other aspects that were not in Lawson’s favor of being treated as an employee included 1) he could set his own schedule, 2) largely wear whatever clothes he wanted, and 3) he could choose his own route.

The Decision
Under California law, whether an individual performing services for another is an employee or an independent contractor is an all-or-nothing proposition,” Judge Corley concluded.

“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. In the meantime the Court must answer the question one way or the other. Based on what the Court observed at trial and the facts found, and after applying the Borello test, the Court finds that during the four months Mr. Lawson performed delivery services for Grubhub he was an independent contractor.”

Reaction
Shannon Liss-Riordan, Lawson’s lawyer, said she plans to appeal the ruling. “Among other issues, the California Supreme Court is considering adopting a more protective test for employee status, so I was surprised the decision was issued before the Supreme Court has issued that decision…we should have prevailed even under the Borello standard,” Liss-Riordan said. 

Matt Maloney, chief executive officer of Grubhub, said the company is pleased with the ruling, “which validates the freedom our delivery partners enjoy from deciding when, where and how frequently to perform deliveries…We will continue to ensure that delivery partners can take advantage of the flexibility that they value from working with Grubhub,” Maloney said.

Conclusion
People who work as 1099 contractors can set their own schedules, and decide when, where and how much they want to work. Employers utilizing 1099 contractors avoid paying taxes, overtime pay, benefits and workers’ compensation. However, some companies have recognized that some people don’t want to be independent contractors, and prefer the benefits that come with employee status. 

Additional Resources: Daily Journal article by Eric B. Kingsley: Let’s talk about a ‘hybrid’ worker. 

Employers are advised to review independent contractor relationships and evaluate agreements with third parties, and contact an employment lawyer with questions. To discuss these laws, or a potential claim on your behalf, feel free to call us toll-free at (888) 500-8469 or click here to contact us via email.

Kingsley & Kingsley

16133 Ventura Boulevard, Suite 1200
Encino, California 91436
Phone: 888-500-8469
Local: 818-990-8300 (Los Angeles Co.)

 

California

Recap of 2018 California Employment Law Changes

california employment lawCalifornia Employment Law Changes Enacted by the 2017 California Legislature

The California Legislature once again enacted numerous labor and employment laws addressing discrimination, harassment, compensation, hiring, and parental leave. A snapshot of each of these laws and their effective dates are summarized below. Employers with operations in California should understand how these laws change their policies, procedures and employee notification processes.

Hiring Practices and Enforcement

AB 168 bars employers from requesting, orally or in writing, the pay history of job applicants (either directly or through an agent, such as a third-party recruiter). Also, employers may not rely on salary history information as a factor in determining whether to hire the applicant or how much to pay the applicant. Applicants may voluntarily and without prompting disclose their salary history to a prospective employer. Effective January 1, 2018

Ban the Box

AB 1008 prohibits employers with at least five employees from asking, orally or in writing, job applicants about criminal conviction histories until a conditional offer of employment has been made. There are limited exemptions for certain positions, such as those where a criminal background check is required by federal, state or local law. AB 1008 also prohibits California employers from considering, distributing or disseminating information about certain types of arrests or convictions while conducting a background check following a conditional offer of employment. Once an employer has made a conditional offer of employment, it may seek certain criminal history information. However, before denying employment because of a criminal conviction, AB 1008 outlines several  specific steps that must be followed. Employers in Los Angeles and San Francisco are also required to comply with the local “Fair Chance” ordinances, which have additional requirements. Effective January 1, 2018

Workplace Harassment

SB 396, the Transgender Work Opportunity Act, requires California employers with 50 or more employees to expand the two hours of sexual harassment prevention training such employers are already required to provide under the Fair Employment and Housing Act to supervisors every two years (or within six months after an employee becomes a supervisor) to include training on gender identity, gender expression and sexual orientation harassment. Effective January 1, 2018

Retaliation and Discrimination 

SB 306 authorizes the Division of Labor Standards Enforcement (DLSE) to investigate an employer – “with or without receiving a complaint” – when the Labor Commissioner suspects retaliation or discrimination against a worker during a wage claim or other investigation. The Labor Commissioner will also be allowed to seek injunctive relief (that the employee be reinstated pending resolution of the claim) upon a mere finding of “reasonable cause” that a violation of the law has occurred. That injunctive relief, however, would not prohibit an employer from disciplining or firing an employee for conduct that is unrelated to the retaliation claim. Effective January 1, 2018

Expansion of Fair Pay Act

AB 46 extends California’s Fair Pay Act to cover public employers. The Fair Pay Act prohibits wage discrimination on the basis of gender, race and ethnicity and previously only covered private employers. Effective January 1, 2018

Gender Discrimination

AB 1556 revises California’s Fair Employment and Housing Act by deleting gender-specific personal pronouns (such as “female,” “she” and “her”) in California’s anti-discrimination, anti-harassment, pregnancy disability and family/medical leave laws and replacing them with gender-neutral terms such as “the person” or “the employee.” Effective January 1, 2018

Worksite Immigration Protections

AB 450, or Immigrant Worker Protection Act, provides workers with protection from immigration enforcement while on the job and imposes varying fines from $2,000 to $10,000 for violating its provisions. Per AB 450, employers cannot give federal immigration enforcement agents access to non-public areas of a business without a judicial warrant, nor can they provide enforcement agents access to employee records without a subpoena or judicial warrant. Effective January 1, 2018

Parental Leave for Small Employers

SB 63, the New Parental Leave Act (NPLA), requires small businesses with 20 or more employees to provide eligible employees up to 12 weeks of unpaid, job-protected leave to bond with a new child. New Parental Leave must be taken within one year of the child’s birth, adoption or foster care placement. Effective January 1, 2018

 

Prohibited Discrimination Against Veterans

AB 1710 expands the current protections for members of the armed services by prohibiting discrimination in all “terms, conditions, or privileges” of employment. This legislation conforms state law to the federal Uniformed Services Employment and Reemployment Rights Act (USERRA) by protecting service members in civil jobs from hostile work environments. Effective January 1, 2018

Whistleblower Protections for Health Care Facilities

Section 1278.5 of California’s Health and Safety Code prohibits a health facility from discriminating or retaliating against a patient, employee, member of the medical staff or any other health care worker of the health facility because that person has presented a grievance, complaint or report to the facility, as specified, or has initiated, participated or cooperated in an investigation or administrative proceeding related to the quality of care, services, or conditions at the facility, as specified. AB 1102 amends Section 1278.5 to increase the maximum fine for a person who willfully violates the aforementioned provisions from $20,000 to $75,000. Effective January 1, 2018

workplace discrimination

Google Accused Of Workplace Discrimination Against White Conservative Men

Workplace Discrimination Case

The engineer who was fired by Google after he criticized its diversity policies last August claims in a lawsuit that he and others at the internet giant faced harassment and workplace discrimination due to their conservative political views. This latest lawsuit against Google comes on the heels of a lawsuit brought against the company in December citing violations of the California Equal Pay Act. That suit alleges that Google discriminates against its women employees by systematically paying them lower compensation than their male peers for performing substantially similar work under similar working conditions. 

Damore v. Google, LLC. (Cal. Sup. Ct., Santa Clara Cty.)

On January 8, former Google engineer James Damore, who famously circulated a memo about Google’s so-called “ideological echo chamber,” and a fellow former Google employee filed a discrimination class action complaint against Google on behalf of all employees of Google discriminated against “due to their perceived conservative political views,” “their male gender,” and/or “their Caucasian race.” 

The other ex-Googler named as a plaintiff is David Gudeman, who says he was an engineer for three years until he was wrongfully terminated in December 2016. The two men claim they were “ostracized, belittled and punished for their heterodox political views, and for the added sin of their birth circumstances of being Caucasians and/or males.”

The complaint alleges the following:

  • that employees who deviated from the “majority view” at Google regarding issues such as “‘diversity’ hiring policies, ‘bias sensitivity,’ or ‘social justice,’” were singled out, mistreated, and systematically punished and terminated from Google.
  • that the company’s “open hostility” to conservative thought leads to discrimination in hiring, promotion, and termination decisions on the basis of race and gender because of the “extreme” lengths Google allegedly goes to in taking race and/or gender into consideration as determinative hiring factors, to the detriment of white males.
  • that several of Google’s diversity initiatives, including, among other things, a “Diversity and Inclusion Summit” and a “diversity training class,” as evidence of bias against conservative white men.
  • “Google’s current method of increasing diversity resulted in what is known as reverse discrimination, because Caucasian and Asian males were not being selected for jobs and promotions due solely to their status as non-females or non-favored minorities.”

Damore’s Attorney

workplace discrimination

Damore’s attorney is Harmeet Dhillon, a civil rights lawyer who has taken on cases that push back against the Bay Area’s progressive tendencies. As part of a press conference, Dhillon, a California representative for the Republican National Committee, elaborated more on the very lengthy complaint and argued that her current clients are far from alone. Dhillon suggested that she had spoken with “dozens” of employees at Google to formulate the lawsuit and that she expects there will be “future lawsuits” to explore, as well.

California Employment Law

Protected classes called out in both state and federal statutes, such as sex, religion, race, etc. are broadly defined. As such, every person can face discrimination, and it is just as unlawful if targeted against white men as it would be against any other group. As long as an employee is negatively impacted because of his or her membership in a protected class, that counts as discrimination and could form the basis for a lawsuit. Further, California law also bans private employers from discriminating against workers due to their political views, affiliations, or activities.

If you are living in Los Angeles, San Francisco, Sacramento, or San Diego and feel you have been a victim of workplace discrimination, contact Kingsley & Kingsley to speak with one of our experienced lawyers.

Kingsley & Kingsley

16133 Ventura Boulevard, Suite 1200
Encino, California 91436
Phone: 888-500-8469
Local: 818-990-8300 (Los Angeles Co.)

sexual orientation discrimination california

Supreme Court Refuses to Hear Sexual Orientation Discrimination Case

Sexual Orientation Discrimination sexual orientation discrimination california

On December 12, 2017, the Supreme Court refused to hear a case challenging whether Title VII protects employees from sexual orientation discrimination. In Evans v. Georgia Regional Hospital, Case No. 17-370 (2017), the high court declined to hear Ms. Evans’ appeal, essentially closing the door on her claim and leaving intact a prior appellate court ruling that prevents employees in the Eleventh Circuit from pursuing a claim of sexual orientation discrimination against an employer. The Supreme Court provided no explanation for its decision.

Background

From 2012 to 2013, Jameka Evans worked as a security officer at Georgia Regional Hospital at Savannah (the “Hospital”). Evans, who describes herself as a gay female, presented herself at work in  stereotypically “male” ways—for example, she wore a male uniform, had a short haircut, and wore male shoes. During her time at the Hospital, her supervisors “harassed her because of her perceived homosexuality, and she was otherwise punished because [of her] status as a gay female.” After filing complaints to Human Resources with no changes in working conditions, Evans eventually left her job.

After exhausting her remedies with the Equal Employment Opportunity Commission (EEOC), Evans filed a pro se complaint against the Hospital, Moss, Clark, and Powers in the United States District Court for the Southern District of Georgia. In her complaint, Evans specifically alleged that she was subjected to workplace discrimination because her “status as a gay female did not conform to gender stereotypes associated with women.”

Prior to service of the complaint, Evans’ case was referred to a magistrate judge. The magistrate recommended that the complaint be dismissed with prejudice for failure to state a claim upon which relief could be granted. In the magistrate’s view, Evans’ claim of discrimination based on her sexual orientation failed because Title VII “was not intended to cover discrimination against homosexuals.” The district court adopted the magistrate judge’s report and recommendation without addressing any of Evans’ objections. The district court then dismissed Evans’ case with prejudice.

Evans appealed, and the EEOC filed a supportive amicus brief, maintaining that sexual orientation discrimination “fall[s] squarely within Title VII’s prohibition against discrimination based on sex.”  The Eleventh Circuit Court of Appeals previously dismissed her claim holding that Title VII does not prohibit discrimination based on sexual orientation. Evans appealed to the U.S. Supreme Court. 

Federal Appellate Courts

Federal courts around the country are divided on whether sexual orientation is protected by Title VII. The law does not specifically reference sexual orientation. While some courts, including federal district courts in Pennsylvania have held that discrimination on the basis of sexual orientation is prohibited as a form of “sex” discrimination, other courts ave refused to recognize such a claim holding that it is up to Congress to change the law. 

 
 

Return to Work Policy Costs American Airlines $9.8M

American Airlines and Envoy Air Settle EEOC Disability Suit about Return to Work Policyamerican airlines eeoc return to work policy

American Airlines’ and Enoy Air’s return to work policy has resulted in a $9.8 million settlement with the Equal Employment Opportunity Commission (EEOC). According to the agency responsible for enforcing federal laws that make it illegal to discriminate against a job applicant or an employee, the airline’s policy violated the Americans with Disabilities Act (ADA) because it meant that employees were not allowed to return to work until they had no disability-related restrictions on their job duties. In short, the EEOC challenged the airline’s policy of requiring workers to be at “100 percent” in order to return to work. 

Allegations of Disability Discrimination

Employees of American Airlines and its largest regional affiliate, Envoy Air filed charges of discrimination with the EEOC alleging violations of the ADA. The employees filing complaints had disabilities such as back and knee injuries, cancer, lupus and asthma. The complaints suggested the employer refused to provide accommodations such as intermittent leave or a stool behind the ticket counter for a worker with a standing restriction, according to the EEOC.  The workers ultimately alleged that the airlines had a “100 percent” return to work policy that required employees to be able to work without any restrictions.

After investigating, the EEOC filed suit asserting that since at least Jan. 1, 2009, American Airlines engaged in a practice of violating the statute by refusing to accommodate employees with disabilities, terminating employees with disabilities and failing to rehire employees. The policy required that employees who are no longer able to do their job without reasonable accommodation find other jobs, apply for other jobs or compete for other American Airlines jobs. The policy did not require consideration of job reassignment as a reasonable accommodation.  

According to the EEOC’s complaint, American 1) did not provide intermittent leave as an accommodation, 2) refused to provide a stool behind the ticket counter to accommodate an employee with a standing restriction, 3) terminated several of the charging parties or placed them on unpaid leave, and 4) told other disabled employees they could not return to work until they had no restrictions related to their injuries and/or disabilities.

American Enters a Consent Decree

American Airlines denied all of the allegations and maintained that they provide equal employment opportunities for all workers. Even with this stance, American entered a consent decree to settle the charges. The consent decree contains the following provisions:

  1.  The EEOC will hold an unsecured claim in American Airlines’ Fourth Amended Joint Chapter 11 Plan in the amount of $9.8 million. The ultimate dollar value of the settlement will depend upon the trading price of the airline’s stock, the parties acknowledged, with the decree fully enforceable no matter the trading price;
  2. American took responsibility for administration costs up to $150,000;
  3. American and Envoy will conduct additional ADA training for all employees, with extra time allotted for human resources workers and ADA coordinators, and a newly designated position will have responsibility for overseeing American’s compliance with the statute and the consent decree;
  4. American and Envoy will refrain from taking part in any employment practices that discriminate or retaliate on the basis of disability and will engage in the interactive process with employees who request a reasonable accommodation;
  5. The airlines will end the challenged return to work policy accommodation and remove references to the litigation from the charging parties’ personnel files; and 
  6. American will provide equitable relief to the complainants.

EEOC Deputy General Counsel James L. Lee said, “We are pleased the parties were able to resolve this important case without resorting to prolonged and expensive litigation, and we are proud of the Commission’s long record of protecting people with disabilities from workplace discrimination.”

Click here to read the entire consent decree filed on November 3, 2017 in Equal Employment Opportunity Commission v. American Airlines, Inc.

California Employment Lawyers

Given the outcome of this investigation, employers should take heed of the EEOC’s position regarding 100% return to work policies. Subsequently, employers should be extremely cautious about requiring employees to return to work without restrictions when returning from medical leaves of absence. Should you have questions about the ADA, or employees having the ability to return to work with or without restrictions, don’t hesitate to contact the experienced California employment lawyers at Kingsley & Kingsley. To discuss these laws, or a potential claim on your behalf, feel free to call us toll-free at (888) 500-8469 or contact Kingsley & Kingsley via email.

Kingsley & Kingsley

16133 Ventura Boulevard, Suite 1200
Encino, California 91436
Phone: 888-500-8469
Local: 818-990-8300 (Los Angeles Co.)

 

California’s Latest Ban the Box Law

ban the boxBan the Box

On October 14, 2017, Governor Jerry Brown signed AB 1008 into law, enacting a broad “Ban the Box” law that takes effect on January 1, 2018. The new law prohibits most California public and private employers from asking an applicant about criminal conviction history until after a conditional offer of employment has been made. Therefore, within less than 2 months, California employers will have to modify job applications and ensure criminal background checks are not conducted prior to an employer making a conditional offer of employment.

Background on Ban the Box Legislation
The passing of AB 1008 follows a recent history of related California legislation. In 2013, California enacted Labor Code section 432.9, which prohibited public employers from inquiring about criminal conviction history until the employer has determined that the applicant met the minimum qualifications for the job. Changes in local laws followed, as the cities of Los Angeles and San Francisco enacted their own “ban-the-box” ordinances, applicable to private employers doing business in those cities. Then, in June 2017, the California Fair Employment and Housing Council promulgated new regulations that limit an employer’s ability to consider the criminal history of a job applicant or employee when making employment decisions.

Who is Impacted by AB 1008?
AB 1008 amends the California Fair Employment and Housing Act (FEHA), which covers all California employers with five or more employees. Only the following positions are exempted: (1) positions for which a government agency is required by law to conduct a conviction history background check; (2) positions with criminal justice agencies; (3) Farm Labor Contractors (as defined by the Labor Code); and (4) positions for which a state, federal, or local law mandates that an employer conduct a criminal history background check for employment purposes, or restricts employment based on criminal history.

When does it go into effect?
AB 1008 goes into effect on January 1, 2018.

What constitutes prohibited actions?
The following conduct is now prohibited before an employer makes a conditional offer of employment:

  • Including in any application (whether written or oral) any question that seeks the disclosure of an applicant’s conviction history;
  • Considering an applicant’s conviction history;
  • Considering, distributing, or disseminating information about any of the following while conducting a conviction history background check in connection with any application for employment:
    • arrest not followed by conviction (except as provided in Labor Code § 432.7(a)(1) and (f))
    • referral to or participation in a pretrial or post-trial diversion program; and
    • convictions that have been sealed, dismissed, expunged, or statutorily eradicated pursuant to law.

What’s allowable following a conditional offer of employment?
After extending a conditional offer of employment, the employer may conduct a background check and obtain a record of the applicant’s criminal history. If the criminal record reveals information that the employer feels necessary to reject the applicant solely or in part because of the applicant’s conviction history, the employer must evaluate if the conviction history would have a “direct” and “adverse” relationship with the specific duties of the job. As part of the evaluation, the employer should consider the nature and gravity of the offense or conduct, the time that has passed since the conduct and completion of the sentence, and the nature of the job held or sought.

If the employer makes a preliminary determination that the offense is worthy of disqualification, the employer is required to notify the applicant in writing and include numerous required elements such as the disqualifying conviction(s), a copy of the conviction history report, and an explanation of the applicant’s right to respond. After the notification is provided, the applicant has five days to respond.

Conclusion
All California employers should review recruitment policies, procedures and forms to ensure they adhere to the latest “Ban the Box” law, especially the revised prohibitions and processes required for applicant notification and disqualification. Employers should also ensure the proper classification of jobs and the determination of those jobs that may be exempt from the provisions within AB 1008. 

Should you have questions about the Ban the Box law, or any of California’s labor laws, don’t hesitate to to contact leading employment lawyers at Kingsley & Kingsley prior to AB 1008’s effective date of January 1, 2018. Feel free to call us toll-free at (888) 500-8469 or click here to contact us via email.

Kingsley & Kingsley

16133 Ventura Boulevard, Suite 1200
Encino, California 91436
Phone: 888-500-8469
Local: 818-990-8300 (Los Angeles Co.)