The judge filed a lawsuit against GrubHub, an online and mobile food delivery service, which ruled that Raef Lawson, who was making shipments for the company, was an independent contractor and not an employee. The Lawson decision v. Grubhub comes in as several companies in the tourism industry are looking into the status of their employees and the costs associated with misclassification.
GrubHub drivers are entrepreneurs – so what?
The decision of Jacqueline Scott Corley, Magistrate of the United States, is extremely important because it is the first federal court to make a verdict on the status of employees of the mission economics. And coming from California, a state that has higher standards than most states to establish workers as independent contractors, this means that lawsuits in other states will have a better chance of succeeding in favor of the companies.
For small businesses that use entrepreneurs of all kinds, that’s good news. There is a big difference between an independent contractor and an employee. Treating workers as employees involves following federal and state laws on employment and work, a much more expensive and time consuming process for employers.
This may include minimum wage, overtime, reimbursement of expenses, workmen’s compensation and other protections depending on the state where the person is employed. The settlement is therefore welcomed by Grubhub and other companies taking advantage of the gig’s economy.
In a statement published on Arstechnica, Matt Maloney, CEO of Grubhub, said: “We are extremely pleased with the decision made today in the Lawson v. Grubhub case, which gives our delivery partners the opportunity to freedom to decide when, where and how often deliveries We will continue to ensure that distribution partners can take advantage of the flexibility they enjoy when working with Grubhub. “
When the offer to classify the lawsuit against Grubhub as a failed class action, it was limited to Lawson, a driver who claimed to have been misclassified as an independent contractor while he was in the business. he was delivering food to the company.
In her decision, Corley J. wrote: “On the basis of what the Court observed at trial and the facts found, and after applying the Borello test (the Borello test determines whether workers are correctly classified as independent contractors), During the four months, Mr. Lawson provided delivery services to Grubhub, he was an independent contractor. “
What does the decision mean for big economy companies?
For companies in the game industry, he decides that he can legally continue to structure his businesses according to a model of independent contractor. For small businesses that employ entrepreneurs and freelancers of any kind, the business can also reduce the fear of being penalized for misclassifying their workers. This is a huge problem for small businesses that, in many cases, do not have the budget needed to hire full-time employees, especially in the beginning.
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