California Court Declines to Apply ABC Test to GrubHub Classification Case

On Tuesday, the Northern District of California issued an order denying the plaintiff’s motion for partial summary judgment to apply the ABC test for worker classification in the case of Lawson v. Grubhub, Inc.

The motion states that Grubhub is a food delivery service which provides food delivery to customers through an on demand dispatch system of drivers that are classified by the company as independent contractors. 

As recounted by the motion, the ABC test is a three-prong standard for employment classification. Under the test, the worker is an employee unless three factors are met. First, the worker must be free from the control and direction from the hiring entity; second, the worker must perform that work outside the usual course of the entity’s business; and third, the worker must be independently engaged in the trade for which they were hired.

The ABC test, per the motion, is stricter than the Borello case law standard.

The order states that the plaintiff, Raef Lawson, worked for Grubhub from 2015 and 2016  which was a time when the legal standard for classifying a worker as an employee was not clearly settled. The plaintiff subsequently initiated the present lawsuit arguing that Grubhub had misclassified him as an independent contractor and therefore failed to reimburse his business expenses in accordance with the California Labor Code.

The plaintiff brought the suit under California Labor Code § 2802, which requires employers to indemnify and reimburse its employees for all necessary expenditures incurred by the employee due to his discharge. The plaintiff argues that since Grubhub misclassified him it failed to reimburse him for his expenses under Section 2802 such as the use of his vehicle and cell phone as required if he was classified as an employee. 

The plaintiff filed the present motion for summary judgment arguing that the ABC test for determining whether a worker as an employee should apply to the present case rather than Borello standard. 

In the order, the court states that as of 2020, the ABC test governs whether a worker is an employee for claims that are derived from wage orders. Further, the court held that when a claim is not based on or rooted in a wage order, the Borello standard applies. 

The court went on to state that Lawson’s expense reimbursement claim is based on Section 2802, not the wage order applicable to his industry. Therefore, the court held that the Borello standard applies to the plaintiff expense reimbursement claim against Grubhub. Accordingly, the court denied Lawson’s motion for partial summary judgment. 

The plaintiff is represented by Lichten & Liss-Riordan, P.C., and Grubhub is represented by Gibson, Dunn & Crutcher.