Home / Mobile / GrubHub Ruling Good News for All Businesses Using Contractors – Small Business Trends

GrubHub Ruling Good News for All Businesses Using Contractors – Small Business Trends


The pass judgement on a lawsuit in opposition to on-line and cell meals supply carrier GrubHub has dominated Raef Lawson, who made deliveries for the corporate, used to be an unbiased contractor and no longer an worker. The Lawson v. Grubhub determination comes as a number of gig-economy corporations grapple with the standing in their workers and the related prices of misclassification.

GrubHub Drivers are Contractors – So What?

The ruling via U.S. Magistrate Judge Jacqueline Scott Corley is very vital as a result of it’s the first federal court docket to achieve a verdict at the standing of gig economic system workers. And coming from California, a state which has upper requirements than maximum states for organising staff as unbiased contractors, it manner fits in different states can have a greater likelihood of succeeding in desire of the firms.

For small companies the use of contractors of any sort, this is excellent news. There is a large distinction between an unbiased contractor and an worker. Treating staff as worker involves following federal and state employment and hard work rules, a a lot more pricey and hard work extensive procedure for employers.

This can come with minimal salary, time beyond regulation, expense repayment, staff reimbursement advantages and different protections relying at the state the place the individual is hired. So the agreement is a welcomed one via Grubhub and different corporations leveraging the gig economic system.

In a observation posted on Arstechnica, Grubhub CEO  Matt Maloney stated, “We’re extremely satisfied with today’s ruling in Lawson v. Grubhub, 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.”

The Case

When the bid to categorise the lawsuit in opposition to Grubhub as a class-action failed, it used to be restricted to Lawson, a motive force who claimed he used to be misclassified as an unbiased contractor whilst turning in meals for the corporate.

In her determination, Judge Corley wrote, “Based on what the Court observed at trial and the facts found, and after applying the Borello test, (The Borello test determines if workers are properly classified as independent contractors) the Court finds that during the four months Mr. Lawson performed delivery services for Grubhub he was an independent contractor.”

What Does the Ruling Mean for Gig Economy Businesses?

For gig economic system companies he  ruling manner they may be able to lawfully proceed to construction their corporations on an unbiased contractor type. For small companies the use of contractors and freelancers of any sort, the case may additionally reduce the concern of being penalized for misclassifying their staff. This is a big factor for small companies which in lots of circumstances should not have the price range to rent full-time workers — particularly when beginning out.

Photo by means of Shutterstock

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