The stories are legendary: the employee who calls in sick and then posts a picture of himself dressed as a fairy at a Halloween party hundreds of miles away; the video of the salesman in a drunken stupor at a conference he is attending on the company’s dime; and just this past week, the New York City lawyer railing against an employee and a customer speaking Spanish to one another in a restaurant. An individual’s social media can be a treasure trove of information about a person and could give insight into a person’s character and habits that might not become apparent until months or years of employment have gone by, perhaps never.
In what some believe the first federal trial over the classification of this new 21st Century worker, a federal district court found a Grubhub driver an independent contractor rather than an employee. With this determination, the worker did not qualify for protections extended to employees under California law. This is a big win for Grubhub, although Lawson appealed to the 9th Circuit Court of Appeals.
All eyes were on the case Lawson v. Grubhub Inc. in California. Grubhub is an on-line food ordering service that connects people to restaurants for take-out. In select markets, Grubhub also offers delivery of food through its drivers rather than the customer picking-up directly or a restaurant using its own delivery service.
Raef Lawson, who had worked as a driver for the company for less than six months, sued Grubhub claiming violations of California law. He alleged Grubhub had failed to pay him a minimum wage, overtime, and reimbursement of his work-related expenses. Lawson had worked under a Delivery Service Provider Agreement with Grubhub. He also served as a driver for two of Grubhub’s competitors – Postmates and Caviar – during this same time.
At issue was whether Lawson was an employee subject to certain protections under the law or an independent contractor. In reaching its determination, the trial court primarily considered Grubhub’s right to control Lawson as well as other secondary factors under California’s classification test, referred to as the Borello test. After a trial, the judge found that “considering all of the Borello factors as a whole in light of the trial record, the Court finds that Grubhub has satisfied its burden of showing that Mr. Lawson was properly classified as an independent contractor. While some factors weigh in favor of an employment relationship, Grubhub’s lack of all necessary control over Mr. Lawson’s work, including how he performed deliveries and even whether or for how long, along with other factors persuade the Court that the contractor classification was appropriate for Mr. Lawson during his brief tenure with Grubhub.” While reaching this conclusion, the judge also noted that this test is “an all-or-nothing proposition” and queried whether the legislature should consider other options or tests for these type of on-demand gig economy jobs.
The “gig” economy is a term that refers to a workforce of temporary or freelance workers who take short-term assignments, projects, or gigs. The increase in this on-demand worker shows a shifting away from the traditional long-term work relationship with a single employer to one of temporary projects. For more information on the gig economy, see my segment with Fred Kocher, host of NH Business.
This case is recognized as the first misclassification trial for a worker in the gig-economy. For years, many of us have been watching how the courts would classify these workers under current law. My previous blog posts (here and here) followed the class action litigation involving current and former Uber drivers in Massachusetts and California. Various other gig-economy cases are pending in federal and state courts. This recent decision is significant as it could influence those and other classification cases going forward.
Technological advances over the past several years including laptops, smartphones, and widely-available wi-fi, have made it a lot easier for people to get work done remotely. And while many appreciate the flexibility and increased productivity that these advances provide, some lament that the ability to work anywhere, anytime has morphed into an expectation to work everywhere, all the time.
Long gone are the days when employers could prohibit employees from talking about their pay with each other, including bonuses, pay raise rates and/or paid benefits and/or to fire them for doing so. It is illegal for an employer to take any such action under NH law. The rationale behind RSA 275:41-b is to attempt to level the playing field when it comes to pay inequality in the workplace.
On December 14, 2017, the National Labor Relations Board discarded its longstanding rule that facially neutral employer rules are unlawful if an employee would “reasonably construe” the rule as prohibiting an employee from engaging in protected, concerted activity under Section 7 of the National Labor Relations Act (NLRA). Moving forward, the Board held, it will balance the employer’s justification for the rule against the impact on NLRA rights, and take into account the facts and circumstances including the relative importance of the employer’s justification, the particular work setting or event, and the importance of the NLRA right at issue. This decision overrules 13 years of precedent, and offers some measure of respite to employers stumped by the Board’s past approach to evaluating handbooks, social media standards, technology policies, conduct rules, and other common workplace policies.
As most human resources professionals know, documentation can often make or break an employment lawsuit. A thorough paper record of an employee’s performance problems, complaints, job requirements, attendance, and/or breaks and working time can aid employers when faced with an agency filing or lawsuit. While this paper record may not stop a legal complaint, it can provide critical leverage in settlement negotiations or result in early dismissal of a discrimination or wage and hour lawsuit. A lack of documentation, on the other hand, can result in overtime or vacation wages owed, allow discrimination or retaliation claims to proceed that otherwise could have been resolved swiftly, or constitute violations of recordkeeping laws.
Last November, a Federal District Court Judge in Texas issued a nationwide injunction preventing changes to the overtime rules under the Fair Labor Standards Act (“FLSA”) from going into effect. Among other things, the new rules would have modified the so-called “salary level test,” such that an employee would need to make at least $913 per week in order to fall under the executive, administrative, and professional exemption (the “EAP exemption”). In the months that have passed since the injunction went into effect, there has been great uncertainty about the future of the new overtime rules. However, a brief filed by the Department of Labor on June 30 in its appeal to the U.S. Court of Appeals for the Fifth Circuit sheds some light on the Trump Administration’s plans for the overtime rules. Continue Reading DOL Defends Its Authority to Establish a Salary Level Test under the FLSA, but Backs Away From the Amount Set in 2016 Rule
One of the key provisions of the new Massachusetts Equal Pay Act (which goes into effect on July 1, 2018) is that it prohibits employers from requiring prospective employees to disclose their salary history. The reasoning behind this provision is as follows: if employers are allowed to ask applicants about their salary history, and base compensation on the answers to those questions, applicants who have been on the receiving end of discriminatory pay practices in the past will continue to be hampered by past pay inequity throughout their careers. If employers cannot base pay on what an applicant made previously, so the thinking goes, employers will have to set pay based on what the job is worth.
On June 13, 2017, Uber released to its employees excerpts of a damning independent investigation report authored by independent investigators Eric Holder and Tammy Albarran, attorneys with the law firm of Covington & Burling LLP. On February 19, 2017, former Uber engineer Susan Fowler published a blog post detailing allegations of harassment, discrimination and retaliation at the company during her tenure. She also decried the ineffectiveness of Uber’s policies and procedures in addressing such workplace issues. The very next day Uber hired Former Attorney General Holder and his law firm to conduct a review of the issues raised by Fowler as well as diversity and inclusion more broadly at Uber. Continue Reading Holder’s Advice to Uber: Focus on Tone at the Top, Trust, Transformation and Accountability
On March 24, 2017, the U.S. Court of Appeals for the Seventh Circuit ruled that the family of a woman murdered by her Home Depot supervisor at a family event could proceed against her former employer(s) on a theory of negligent supervision, hiring, and retention. In so holding, the Seventh Circuit adopted a broad and novel view of employers’ duty to control managers who engage in criminal activity off the employer’s premises and outside the scope of their employment by abusing their supervisory authority. Continue Reading Seventh Circuit: Negligence Lawsuit May Proceed Against Employer Regarding Supervisor’s Off-Site Murder Of Female Subordinate