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Employer vs. Independent Contractor: Lawson v. GrubHub Provides Guidance on the Difference

The distinction between independent contractors and employees is a minefield. A recently-released California federal district court’s decision in Lawson v. GrubHub provides some helpful guidance, as employers wait with bated breath for the California Supreme Court’s ruling in Dynamex Operations West v. Superior Court.

Under the test set forth by the California Supreme Court in S.G. Borello & Sons v. Department of Industrial Relations (1989), a purported employer must convince the court that the contractor retains control over the “manner and means” by which the contracted-for service is performed. In making this determination, courts consider whether the relationship bears various hallmarks of employment, including the primary question of control, as well as consider numerous secondary factors. Applying the Borello factors, Magistrate Judge Corley concluded that the GrubHub delivery driver plaintiff was not an employee.

In contrast, in Dynamex Operations West v. Superior Court, currently before the California Supreme Court, the appellate court relied on the definition of employer in the Industrial Welfare Commission Wage Orders—“any person … who directly or indirectly, or through an agent or any other person, employs or exercises control over the wages, hours, or working conditions of any person.” (Cal. Code Regs., tit. 8, Section 11090, subd. 2(F).) If the California Supreme Court adopts the Wage Order definition of employment, there will be significant impacts both in the gig economy and elsewhere.

Gina Roccanova, Chair of Meyers Nave’s Labor and Employment Practice Group, published an article in The Recorder to help employers understand the court’s decision in Lawson v. GrubHub and how the particular facts in that case led to the decision favoring the employer. Please click here to read her article.