With the recent federal court decision in Lawson v. Grubhub, which found an app-based driver had prevailed on claims of employee status under state wage law, it’s raising questions about the potential impact for others working in app-based services.
In the Castellanos v. California ruling in early March, a state appeals court ruled against plaintiff claims that Proposition 22 isn’t constitutional. But later in March, U.S. District Judge Jacqueline Scott Corley found in the Lawson ruling that a former Grubhub driver, Raef Lawson, qualified as an employee at the time of his claim in 2016.
Judge Corley’s ruling, in which Grubhub was ordered to pay Lawson $65.11 for minimum wage violations, was issued March 31.
Theane Evangelis, a partner at Gibson, Dunn & Crutcher and counsel for Grubhub, told the Southern California Record by email: “We disagree with the court’s ruling (in Lawson) and are considering our legal options. 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. 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.”
Roughyl 60% of California voters chose to back Proposition 22 in 2020.
“The issue of Prop 22’s constitutionality has not been addressed yet at the California Supreme Court," Shannon Liss-Riordan, the attorney for Lawson, told the Record by email. “We look forward to seeing if the California Supreme Court takes it up. So I don’t think we’ve heard the last word on that question.”
A labor coalition is petitioning the California Supreme Court to hear Castellanos in conjunction with a gig workers congress, the Los Angeles Times reported.
While the federal ruling in Lawson doesn’t negate Prop 22, which explicitly declares that such app-based delivery drivers should be considered independent contractors, the California Supreme Court could decide to hear another constitutional challenge in the future.
The California Supreme Court is already scheduled to hear oral arguments in Adolph v. Uber, another case involving classification of app-based services, on May 9. Adolph also involves claims brought under California’s controversial PAGA (Private Attorneys General Act).
The legal challenges to California’s worker classification laws have grown exponentially since 2019, when AB 5, sponsored by former Assemblywoman Lorena Gonzalez – now head of the California Labor Federation – was signed by Gov. Gavin Newsom following the California Supreme Court’s Dynamex decision.
During last week’s Senate Confirmation hearings for President Biden’s Labor Secretary nominee, Julie Su, she was asked about her role implementing AB 5 here.
Liss-Riordan noted the Lawson decision is part of a PAGA case.
“So we look forward to the next stage of the case, which will be the assessment of penalties against Grubhub for its misclassification of drivers across California for years," Liss-Riordan said. "Even if Prop 22 is upheld and going forward relief is not available, this will still come to substantial penalties for Grubhub’s past violations.”
A spokesperson for PADS (Protect App-Based Drivers and Services) declined to comment directly on Lawson, specifically because they are not party to it. But the spokesperson said it is important to note that the case involved a challenge to a worker classification that occurred prior to the 2020 passage of Prop 22.