A former Grubhub driver is set to make $65 after a California judge ruled he was working as an employee, not a contractor, when he made deliveries for the company eight years ago in Los Angeles.
The $65 is what Grubhub owes Raef Lawson in minimum wage for his time delivering food through the app from November 2015 to February 2016. In California, workers classified as employees are entitled to a minimum wage, while independent contractors are not. Third-party delivery companies have long argued that their drivers should be treated as independent contractors.
Though the payout in the case is minimal, it could have broader implications for Grubhub and fellow delivery providers DoorDash and Uber Eats. If the decision stands, it could clear the way for former drivers to file for retroactive compensation.
The ruling’s impact on current and future drivers is less clear because of Proposition 22, the California law passed in 2020 that categorizes app-based workers specifically as independent contractors.
“It’s important to note that if the district court’s ruling stands, it means that Mr. Lawson is owed $65 for his brief use of the Grubhub app over seven years ago,” Grubhub counsel Theane Evangelis said in a statement. “Thanks to Prop 22—which California voters overwhelmingly enacted and the California Court of Appeal recently upheld—drivers who use the Grubhub app will continue to enjoy the freedom and flexibility of working as independent contractors.”
To determine Lawson’s employment status, U.S. District Court Judge Jacqueline Scott Corley used what’s called the ABC test, a three-part standard for defining independent contractors in California. Corley concluded that Grubhub drivers do not meet part B of the standard, which says contractors must do work that is outside of the employer’s business.
“The usual course of [Grubhub’s] business is connecting restaurants with diners to facilitate food ordering,” Corley wrote in a document filed March 30. “Food delivery is not outside the usual course of that business.”
Therefore, she ruled that Lawson was an employee of Grubhub, yet earned below the state’s minimum hourly wage on nine occasions in 2015 and 2016. California’s minimum wage was $9 in 2015 and rose to $10 in 2016.
Chicago-based Grubhub disagreed with the ruling and was considering its legal options, Evangelis said.
It’s the latest twist in the ongoing battle over delivery drivers’ employment status in California. The conflict goes back to at least 2020, when the state adopted Assembly Bill 5 and established the ABC test.
In response, gig companies like Uber Eats, Lyft and DoorDash funded Proposition 22, a ballot initiative that would exempt their workers from AB 5 and the ABC test. Voters approved the initiative in the November 2020 election.
Since then, Prop 22 has ping-ponged through the courts. Last month, California’s 1st District Court of Appeals upheld the law after a challenge from the Service Employees International Union. The ruling is widely expected to be appealed to California's Supreme Court.
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