Grubhub Trial Decision Could Be Delayed For A Very Scary Reason

by Fisher Phillips

The first few days of 2018 might not be going to plan for those gig economy businesses hoping that the new year might bring some relief in the seemingly never-ending misclassification struggle. As we sit on pins and needles waiting for a decision from the trial court judge in the blockbuster Grubhub trial (you can familiarize yourself with the trial here and here if you need a refresher), the plaintiff’s attorney is asking for a delay in the court’s ruling. Yesterday, plaintiff Raef Lawson’s attorney provided the court with a quick one-page filing that might otherwise seem innocuous; after all, it was just a “Notice of Supplemental Authority,” a common legal tool intended to alert the court to some additional legal precedent that might impact the case. But its contents could signal that a bombshell is on the way. 

The filing points out that, last week, the California Supreme Court sent a notice to the parties in a completely separate case – Dynamex Operations West, Inc. v. Superior Court of Los Angeles County – asking for their thoughts about whether to adopt a revised test for determining whether a worker is an employee or independent contractor under state law. The scary part? The California Supreme Court specifically asked the parties to assess whether state law should embody a test similar to the “ABC” test adopted by the Supreme Court of New Jersey in a 2015 case. And that test is nothing but bad news for gig economy companies. 

The “ABC” test, as formulated by the Supreme Court of New Jersey in Hargrove v. Sleepy’s LLC, presumes an individual in question is an employee unless the employer can satisfy three very specific criteria: 

(A)         Such individual has been and will continue to be free from control or direction over the performance of such service, both under his contract of service and in fact;

(B)         Such service is either outside the usual course of the business for which such service is performed, or that such service is performed outside of all the places of business of the enterprise for which such service is performed; and

(C)         Such individual is customarily engaged in an independently established trade, occupation, profession or business. 

So let’s take a closer look at these A-B-C items and what they might mean if they became the law in the state of California. 

Item A isn’t that big of a deal. The question of control is the centerpiece of just about any independent contractor misclassification test across the country, whether we’re talking about a court, a regulatory agency, an investigator, or interpretative guidance. It’s items B and C that are worrisome. 

Item B would require a business to only use independent contractors to handle work that is outside their usual course of business, or to perform work in locations outside of their normal business coverage. That’s just about impossible to square with most gig economy businesses, as most of them exist for the sole purpose of connecting needy consumers with workers who happen to have the time, capacity, and means to handle the work. Although many try to argue they aren’t actually “in” the business of providing the specific service around which the business is shaped, but instead are just a digital connection platform, this argument hasn’t caught much traction and has been viewed skeptically by those examining its merits. 

And Item C might be near impossible to comply with. It would require a gig business to only retain workers who are customarily engaged in that trade or business to do their work. So a rideshare company, presumably, could only retain professional drivers to do their work. A handyman company might only be able to contract with professional service people. And a delivery company might only be able to work with professional delivery drivers. This could ruin the gig economy as we know it. After all, a great many of those providing services for gig companies – taking advantage of their idle capacity so they can fill a specific need and make some extra money – are handling these jobs as side hustles. They are not running an independently established trade, occupation, profession, or business. And moreover, how would a gig economy business confirm that their workers are meeting these standards? Presumably they could ask new workers joining the digital platform to confirm this status during the application or registration process, but they couldn’t realistically invest the time and effort to investigate and confirm this status in a way that would ensure it would withstand scrutiny from a court or regulatory body. 

Getting back to the business at hand, the California Supreme Court was somehow made aware of this New Jersey ABC test and is now kicking the tires about whether to adopt it for workers in their own state. And in the Grubhub trial, the plaintiff’s attorney is asking the trial court to “hold its ruling in abeyance” until the Supreme Court issues its ruling in Dynamex and determines whether to adopt the ABC test. According to the attorney, “should the Court adopt the ABC test, as it appears to be considering, this would make it significantly harder for Grubhub to prove that its drivers have been properly classified as independent contractors.” 

There is no word on the timing of this request. The trial court could, of course, ignore it and issue its ruling any day now. Or it could sit and wait to see what the Supreme Court has to say. Whatever happens, with the possible adoption of the ABC test hanging over their heads, gig businesses in California will now have something else to worry about in 2018. Happy New Year, folks.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Fisher Phillips | Attorney Advertising

Written by:

Fisher Phillips

Fisher Phillips on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.