A U.S. District Court in San Francisco ruled in Lawson v. Grubhub Inc. that a former delivery driver was an independent contractor and not the company's employee. This was the first case of its kind against a "gig economy" company that went to trial.
The court found that Grubhub, a technology company, did not control the methods of the plaintiff's (a purported independent contractor) food delivery job. Therefore, no employment relationship formed under California law. Siding with the software company, the court held that the delivery platform does not owe its drivers legal rights of employment like minimum wage or workers' compensation, even if they make a living through the service.
The decision could influence the landscape of cases involving ridesharing or freelancer platforms across the country. Noting that independent contractors do not receive any of the legal protections afforded to employees, the trial court suggested that California state lawmakers "may want to address this stark dichotomy." We'll keep watch in Sacramento.
In Washington, the Trump administration and Congress are expected to weigh in on the state of the gig economy, seeking to refine how workers for delivery platform companies should be treated under federal workplace law. We anticipate that the Bureau of Labor Statistics will publish its updated Contingent Worker Survey in the spring, offering new data on "gig" jobs in the U.S. BLS last surveyed the U.S. economy for workers doing short-term, non-salaried tasks in 2005, a full two years before Steve Jobs introduced the iPhone.
A TRIP TO LONDON
Across the Atlantic, government officials in the United Kingdom are already making some changes to bolster the rights of those working in the gig economy. Under its new Good Work Plan, lawmakers will ensure vulnerable workers, defined by low wages, have access to basic "one day work rights." Among these, are rights to a request a pay slip, more stable hours, and even sick pay, which are aimed to provide for more financial security for workers on flexible contracts. The end of this story is not yet written. We'll keep scrolling ahead to the next episodes.
Transportation and Infrastructure
WHERE WE'RE GOING, WE NEED ROADS
The White House rolled out its long-awaited, $1.5 trillion plan to repair and rebuild the nation's infrastructure, including highways, bridges, airports, seaports, railroads, and water systems, and extend broadband Internet access. To accomplish an ambitious building plan, the Trump administration is proposing an "investment" funding model.
A ROAD TO GROWTH?
Under the plan, the federal government would seed up to $200 billion, designed to incentivize state, local, and private investment to pick up the rest of the bill. The President seeks to quickly generate $1.3 trillion in new construction through matching funds programs, and by removing perceived bureaucratic roadblocks to projects, in both urban and rural centers. Later today, the President will host lawmakers from both parties at the White House to begin advocating for his plan. We're following this story from the road.
Making Our Way Around the Country
Efforts to establish a drug formulary for the Pennsylvania workers' compensation system failed in the state House of Representatives this week. Senate Bill 936, easily passed the Senate last October. The House failed to advance the bill, recording a 98-98 tie vote. All 79 Democrats in attendance voted no, and they were joined by 19 Republicans. The bill underwent extensive debate with supporters claiming the formulary would help employers curtail costs and mitigate the opioid epidemic in Pennsylvania. Its opponents argued that the formulary would rend control away from the injured worker's care team. This one was close.
The Virginia Senate voted unanimously to pass a bill that would permit the use of medical marijuana, days after the House of Delegates passed a similar measure. S.B. 726 will let Virginia doctors recommend the use of cannabidiol (CBD) oil or THC-A oil for the treatment of any diagnosed condition or disease. The companion bill, H.B. 1251, unanimously passed last week. The bill awaits action by Governor Ralph Northam, who is a medical doctor.
Lawmakers in South Dakota heard testimony this week on legislation that would prevent injured workers from suing their employers, workers' compensation insurers, and third-party administrators on bad faith claims. S.B. 145, sponsored by a total of 21 state senators and representatives, will leave bad faith claims up to the state's Department of Labor and Regulation, which oversees the state's workers' compensation program. The bill proposes a framework of administrative awards in the event the Department of Labor finds evidence of improper claims handling upon hearing.
Lawmakers in Helena will consider dissolution or privatization of the Montana state-funded workers' compensation insurance program. The Montana State Fund insures about 25,000 employers, holds about $1.4 billion in assets, and represents 61 percent of all workers compensation premiums in the state. The measure pends before the Economic Affairs Interim Committee, which meets again in April. At that time, lawmakers are expected to indicate their intention to draft legislation that could change the public / private nature of workers' compensation insurance in Big Sky Country.
NOTHING COMPARES TO YOU
Happy Valentine's Day! We know the greatest gifts in life are free. But if your enterprise risk tolerance is low, here's a supporting sentiment for the day: according to the National Retail Federation (NRF), the planned Valentine's Day spend in the U.S. will be $19.6 billion. Americans, on average, will spend $143.56 on gifts, cards, and flowers to the special people in their lives. We previously reported that Americans spent just about $15 billion prior to kick off two weeks ago. "I love you $4 billion more than football" has a nice ring to it. With much love and admiration from all of us, we wish you and yours a wonderful day.