United States: A Comprehensive Review Of The Grubhub Trial Closing Arguments

Last Updated: November 8 2017
Article by Richard R. Meneghello

After a five-hour closing argument session in a California federal court on Monday, the gig economy is waiting with baited breath and trying to hazard their best guesses about how the judge will rule in the high-stakes Lawson v. Grubhub misclassification trial. Will Judge Jacqueline Scott Corley determine that former driver Raef Lawson was properly characterized as an independent contractor, dashing his hopes of a larger recovery and giving the gig economy in general a much-needed legal boost? Or will she determine that he was an employee all along, sending ripples of panic through the headquarters of gig economy companies across the country?

Although your author was not in the courtroom on October 30, we have collected five excellent summaries from reporters who were there, and have condensed them all for you here so you have an opportunity to make your own best guesses.

Judge's General Comments On Legal Standards

Cara Bayles from Employment Law 360 reported that Judge Corley said what we've long figured: that answering 21st-century misclassification questions for gig economy companies using 20th-century legal standards isn't easy. "The tricky part is trying to fit in this gig economy to existing labor rules," she said. "It's a unique situation that's hard to figure out."

A Question Of Credibility

As a stark reminder that this case is comprised of actual people and not just a stale analysis of legal regulations and case law, one of the key issues that emerged during the trial and was rehashed during closing arguments centered on the plaintiff's credibility – or lack thereof. According to TechCrunch's Megan Rose Dickey, evidence received at trial showed that Lawson lied on his resume about attending a three-year program, which he did not complete. "It also came up that Lawson applied to work for GrubHub during the litigation, but under a different name," Dickey said, and that he said no when asked if had driven for GrubHub before during the application process. Courthouse News reporter Nicholas Iovino reported that Grubhub's attorney, Michelle Maryott, concluded by saying "It's clear Mr. Lawson will lie and say anything to get what he wants."

The judge was apparently not impressed with Lawson's truthfulness. "So I know he's willing to not tell the truth," Judge Corley said, "so I do have an issue with his credibility." According to Ars Technica's Joe Mullin, the judge interrupted Shannon Liss-Riordan, Lawson's lawyer, to point out that her client was untruthful, not only because he produced a "fabricated resume," but because he lied on his GrubHub application submitted after filing the lawsuit. Mullin reports that the judge indicated that her decision would reflect the fact that Lawson was not credible.

Lawson's attorneys did their best to salvage the situation. According to Mullin, Liss-Riordan said that "GrubHub didn't really rebut the facts. Their focus seemed to be on trying to undermine the plaintiff, and his credibility – trying to claim that he was a bad worker. That made for good news headlines for GrubHub but I'm not sure how that helped prove its case."

How this will all shake out is unclear. According to TechCrunch's Dickey, Judge Corley said the issue may not be determinative in the end. "If he's an employee," the judge said, "it doesn't matter if he was lying or not."

The Critical "Control" Factor

As with all independent contractor misclassification disputes, the resolution usually lies in determining whether the business exerted sufficient control over the worker. And that appears to be the case here, as well. As we reported in last week's summary of the legal briefing in the case, the parties agreed that the controlling case regarding this issue is the 1989 California case of Borello & Sons v. Department of Industrial Relations. That case created a multi-factored, common law test for determining whether a relationship is an employee-employer relationship or an independent contractor arrangement; the most critical factor is whether the company to whom the service is rendered "has the right to control the manner and means of accomplishing the result desired."

"If you look at the facts, frankly, I don't think there is very much question" that GrubHub has failed to prove the burden that Lawson was an independent contractor, said Shannon Liss-Riordan, Lawson's lawyer, according to TechCrunch's Dickey. According to Dickey, the plaintiff's attorney also said she thinks it's a pretty "straight-forward case." She pointed to the priority scheduling system for drivers and how the dispatchers had their favorite drivers who would receive more orders, concluding that "those are the types of things employers do."

EL360's Bayles reported on the defense attorney's response to these arguments. Maryott reportedly noted that "Lawson could sign on and off when he wanted, only took on shifts voluntarily, faced no restrictions on his methods for delivery, chose the region where he worked, and could even use the apps of food delivery competitors while driving for Grubhub." According to Bayles, Maryott's argued that Lawson "called the shots. He controlled whether and when to work. It was all up to him."

In a creative maneuver, Grubhub's attorneys used Lawson's credibility problems against him when it came to the control argument. Ars Technica's Mullin reported that Maryott argued that Lawson was able to defraud the company because of the company's lack of oversight, pointing out that the evidence regarding his frequent actions of claiming to be working while actually toggled off the system was "evidence of lack of monitoring and supervision." As EL360's Bayles reported regarding the alleged fraudulent activities, Maryott concluded by pointing out that "Mr. Lawson did this for many, many days and no one was contacting him saying, 'Hey, where are you?' It never happened."

The judge made some comments that seemed to signal she was sympathetic to Grubhub's position. According to Dickey, she noted how if Lawson woke up in the morning and didn't want to make deliveries, he didn't have to. The right to control when someone work is "sort of the big distinction there," Judge Corley reportedly said. Also, according to Courthouse News's Iovino, the judge was impressed with the fact that Lawson signed up to work for Grubhub in August 2015 but did not sign up for a shift or make his first delivery until two and a half months later. She said that supports Grubhub's argument that Lawson made his own schedule and that the company did not levy sufficient control over him to deem him an employee.

Contractor Or At-Will Employee?

That being said, there were apparently plenty of statements made by the judge that could lead the plaintiff to conclude she would rule in his favor. According to The Recorder's Ben Hancock, Grubhub had the right to end the relationship at will, "a factor she said California law gives heavy weight to in determining an employment relationship." Judge Corley said to Grubhub attorneys, "it's one factor, but it's of inordinate importance, so I think you have that heavy burden."

Grubhub replied by arguing that the employment agreement's termination provision was mutual, according to TechCrunch's Dickey, which therefore would weigh in favor of independent contractor status. That didn't sit well with Judge Corley, however, according to The Recorder's Hancock, who said: "Any at-will employee can always quit because of the 13th Amendment to the United States Constitution," referring to the amendment that abolished slavery.

The Written Agreement

The written agreement between the two parties, which had been digitally accepted by Lawson at least three times, also came front and center during the closing arguments, and the judge's statements did not give Grubhub any comfort. Although the company pointed out the agreement demonstrated Lawson's digital acknowledgement that he was an independent contractor, The Recorder's Hancock said the document was an unenforceable "contract of adhesion" that he had no choice but to sign. In fact, as reported by Courthouse News's Iovino, the judge said a party's own belief about whether he or she is a contractor is the "least important" of the factors that are examined in determining whether someone is misclassified.

What Business Is Grubhub In?

Another factor seemed to fall against Grubhub in the judge's eyes. As we pointed out in our summary of the legal briefing, Grubhub argued that food deliveries are not the core of its business, which would mean the drivers do not carry out the most essential function of the company. Instead, Grubhub says it is an online take-out marketplace, marketing restaurants to a board audience of consumers and offering a singular digital destination to browse for dining options. If the consumer chooses to place an offer to have the food they have viewed online then delivered to their residence or place of business, it says, that is a secondary function of the business and the app. But according to Courthouse News's Iovino, "Judge Corley did not appear to buy that argument."

"I'd like to have Grubhub stand up and make that argument to their investors," the judge reportedly said. As The Recorder's Hancock reported, the judge indicated she "doubted that very much," seemingly agreeing with Lawson's attorneys that delivery was more than ancillary to Grubhub's business. "I don't believe it," she reportedly said, shutting down debate over that topic.

Working For Competitors

A factor that certainly weighs in favor of Grubhub's case, however, is that Lawson worked for several other gig companies, including several of Grubhub's direct competitors. Apparently Lawson's attorneys tried to argue that Lawson was terminated from Grubhub's platform for moonlighting with other companies, but The Recorder's Hancock said that the judge rejected that argument. "I don't think the evidence supports that," Judge Corley said.

When Will We Know The Outcome?

At the conclusion of the oral argument session, Judge Corley thanked both sides and predicted that her ruling would not end the dispute about whether typical gig economy workers are misclassified or not. "I doubt I will be the last word," she said, according to Courthouse News's Iovino. Still, although hers might not be the final word, her decision will be monumental and thus is highly anticipated.

According to TechCrunch's Dickey, "Judge Corley is expected to rule soon(ish)." Judge Corley no doubt knows that her decision will be one day scrutinized by an appeals court, so she'll want to spend some time to draft up a solid decision. However, for all we know she might have already made up her mind, and could have spent the better part of the last seven weeks working on a final order. In other words, we might see a final ruling on the case in a matter of days or weeks; although if I were a betting man, I would expect to see this first stage of the proceedings completed by Thanksgiving.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Richard R. Meneghello
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions