A Grubhub driver’s misclassification win could have a big impact on the gig economy despite the small financial award, plus other joint employment and misclassification cases.
Grubhub. Grubhub driver Raef Lawson was awarded only $65.11 when a US magistrate judge found the delivery company misclassified him as an independent contractor. But the ruling could have a big impact on the gig economy, Bloomberg [1] reported.
Lawson worked as a restaurant delivery driver for Grubhub in Southern California for four months in late 2015 and 2016. He asserted that Grubhub improperly classified him as an independent contractor and therefore violated California’s minimum wage, overtime and employee expense reimbursement laws.
In what was then heralded as the first federal court decision on whether workers in the gig economy are employees, US Magistrate Judge Jacqueline Scott Corley in February 2018 found Lawson to be an independent contractor [2]. The original ruling predated the California Supreme Court’s Dynamex ruling [3], which redefined employee classification in the state.
Last week, Scott Corley reversed course, finding that Lawson met California’s definition of an employee in several ways, including that his work for the company was “not outside its usual course of business.”
The case’s outcome may determine whether drivers qualify under California’s law to be reimbursed for their personal vehicle expenses and make claims retroactively, Bloomberg reported.
“Raef Lawson is the first gig worker in America to be declared an employee by a court for wage law purposes,” said Shannon Liss-Riordan, the driver’s attorney. Liss-Riordan has brought other independent contractor misclassification lawsuits against gig economy companies.
Joint employment. The US Department of Labor’s Wage and Hour Division determined two Maryland construction firms were joint employers in an arrangement through which leased workers’ hours would be split between the companies’ records in order to avoid paying overtime. The companies must pay $135,124 in back wages to the 42 workers affected, an equal amount in liquidated damages and $19,522 in civil penalties.
According to a WHD investigation, Jordi Construction provided leased workers to augment Stark Truss Baltimore’s workforce. Once the workers reached 40 hours in a workweek for Jordi Construction at Stark Truss Baltimore’s worksite, they were directed to work additional hours under Stark Truss Baltimore. This arrangement led to the joint employers willfully paying affected employees straight time instead of the required overtime premium for hours worked over 40 in a workweek, a violation of the Fair Labor Standards Act.
Under the FLSA, joint employment applies when an employee is employed by two or more employers such that the employers are responsible, both individually and jointly, for compliance with federal labor laws.
“These employers illegally used their employee lease agreement to intentionally avoid paying overtime wages,” said Wage and Hour Division Assistant District Director Linamarie Martinez in Hyattsville, Maryland. “The division will hold companies accountable when they don’t meet their obligations under the law.”
Misclassification. The DOL alleges that Medi-Wheels of the Palm Beaches Inc. — a company providing non-emergency and emergency medical transportation services to patients in South Florida and Florida’s west coast — misclassified 46 of its drivers as independent contractors and violated minimum wage, overtime and recordkeeping provisions of the Fair Labor Standards Act. The complaint seeks back wages resulting from these violations from June 2020 through Dec. 1, 2022, and for violations continuing after Dec. 1, 2022, through present, for current and former employees listed in the complaint as well as liquidated damages and an injunction against future violations of the FLSA.