The GrubHub "Gig Economy" Trial

(Brandon Bhangoo) #1

In 2015 Raef Lawson was an aspiring actor, comedian, and writer living in Los Angeles. Like many in his shoes, he chose to make ends meet by doing deliveries. He chose to work for GrubHub. Thereby joining the gig economy.

The gig economy is a term used to refer to a labor pool made up of short-term contractors or freelances.

Lawson worked with GrubHub for four months and his services were terminated in early 2016. When he quit he went the route of litigation. He sued GrubHub.

His main gripe was his wages. He claimed that once he subtracted his expenses for things like gas, parking and phone usage he was earning less than the Californian legal minimum of $10.50 an hour. He felt that based on his duties, he should have been classified as an employee and not a contractor thereby allowing him to earn a decent wage.

His lawsuit against GrubHub was for back wages, overtime, and expense reimbursement to the tune of approximately $600.

Similar lawsuits have been brought against on-demand companies such as Uber, Lyft, Postmates, Handy, Shyp, DoorDash, and Washio.

Previous Lawsuits

Following is a brief look at the lawsuits filed against Uber and Lyft. It should be noted that when the lawsuits were brought against each company, they both filed for summary judgment.

A summary judgment is a request made to the courts to make a determination on a case using only the facts that have been presented in the initial filing thereby eliminating the need for a trial. Both requests were denied and the cases were allowed to proceed to trial/settlement.


The lawsuit against Lyft was a class-action lawsuit. More than 200,000 former and current drivers were involved. The issue at the heart of the lawsuit was how the ride-hailing company referred its drivers.

The lawsuit did not go to court as a settlement was reached. The amount of the settlement was $12.5 million and the driver's classification was to remain as independent contractors. A judge threw that settlement out as he felt it did not sufficiently address the drivers concerns.

The settlement amount was then bumped up to $27 million. In addition, drivers were offered more on the job protections such as job security and channels for resolving grievances as they occur. A judge has given a preliminary approval for this settlement to proceed.


The lawsuit filed against Uber was similar to that of Lyft. It is also a class action lawsuit and involved about 385,000 Uber drivers. The settlement amount offered by Uber was $100 million. The settlement was not approved.

The judge in the Uber case expressed similar concerns to the judge in the Lyft case. The drivers were getting a raw deal and the company needed to do better. This case is ongoing.

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Raef Lawson Vs GrubHub

Lawson's case against GrubHub appeared before a judge in September at California's US District Court for the Northern District. The judge assigned to the case was US Magistrate Judge Jacqueline Scott Corley.

The case was a bench trial. This means that a judge and not a jury makes the final decision. It also means that the judge gets to ask questions during the trial.

Lawson was represented by labor lawyer Shannon Liss-Riordan. She's the lawyer responsible for the two suits brought against Uber and Lyft.

The employee/independent contractor debate boils down to control. The more control you have over an individual makes them more of an employee than an independent contractor.

Liss-Riordan centered her case around proving that the manner in which GrubHub operates including the way in which Lawson was fired made him an employee and not an independent contractor.

At the start of the trial, Liss-Riordan had requested for class action status. Class action status would have allowed other GrubHub employees to join the suit. Her request was denied. There was initially a co-plaintiff by the name of Andrew Tan. However, it appears he dropped off.

GrubHub's lawyer, on the other hand, focused on showing how Lawson was for all intents and purposes his own boss and therefore in control of his own time. They also went further to prove that he was not the most credible individual.

They pointed out how he signed up to work for GrubHub yet he did not access the app required to perform his duties for two months. When he finally signed on to the app he would sign up for blocks (shifts) of work and either work a small portion of the time he had selected or spend it in airplane mode which made him unreachable.

Judge Corley asked dissecting questions throughout the course of the case. Her most memorable interjection though came when Liss-Riordan was barely twenty minutes into her closing argument.

Liss-Riordan brought up the issue of Lawson's credibility in her closing argument. She stated he was credible. Judge Corley interjecting saying the following.

" In this case, he produced a fabricated resume. He represented that he got his degree from this three-year program, which he did not complete. That' s dishonest. Number two, while this case was ongoing, he applied again to work for GrubHub. I don't know why. He used a different name, a different email address, and when he was asked whether he had worked for GrubHub before, he said no. So I do have an issue with his credibility. I know he's willing to not tell the truth."

The fact that Lawson lied to GrubHub does not necessarily tank the case. Cases are about the facts. If the judge rules in his favor, even though it would only apply to drivers in California, it would set precedence for other lawsuits like it.

If rideshare drivers get their wish and have their classification changed from independent contractors to employees, owners of rideshare companies will see their expenses rise sharply.

They will have to take on the added responsibility of taxes and social security. Pay for their driver's health insurance and other benefits. Also, they will have to reimburse drivers expenses such as gas and vehicle maintenance.

It will also be hard to see the drivers not losing something in that deal. If they become employees they will undoubtedly have to give up the independence that comes with being an independent contractor

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