There is a growing body of California common law on the issue of determining whether a worker on an app-based forum is an independent contractor or employee. A recent case, Sportsman v. A Place For Rover, sheds light on what legal tests are used to make this determination.
In today’s gig economy, the issue of classifying app-based workers as employees or independent contractors affects a growing number of people worldwide. The “gig economy” often involves “nontraditional workforces” of independent contractors, temporary workers, or third-party contractors. As independent contractors, workers gain the freedom to be their own boss, exemptions from state and federal income tax, and, in some cases, can earn more than if they were an employee. However, independent contractors lose out on employee benefits, job security, unemployment insurance, and workers’ compensation. Thus, by classifying workers as independent contractors instead of employees, app owners minimize labor costs.
App-based ride-share and delivery drivers are currently classified as independent contractors under Proposition 22, “the App-Based Drivers as Contractors and Labor Policies Initiative;” which was passed by a vote of 58.63% of Californians. The Los Angeles Times reported that “Proposition 22 preserved the flexible schedules associated with remaining an independent contractor but took away protections granted by a 2019 law, AB 5, requiring gig workers across many industries to be classified as employees with stronger benefits such as a minimum wage, overtime and workers’ compensation in case of injury.” Litigation concerning the same issue, but instead involving a pet services app, brings a new dog to this fight.
In A Place For Rover, both parties cross motioned for summary judgment on the issue of whether pet sitters and dog walkers using the Rover app were correctly categorized as independent contractors. The California Northern District Court analyzed the legal question at issue under both the “ABC test” from Dynamex Operations W. v. Superior Ct., and the factor test often referred to as the “Borello test” from S.G. Borello & Sons, Inc. v. Department of Industrial Relations.
Relying on California Labor Code §2775, the ABC test creates the rebuttable presumption that a worker is an employee. An independent contractor relationship, instead of an employer-employee relationship, can be established if three elements are present. First, “[t]he person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.” Second, “[t]he person performs work that is outside the usual course of the hiring entity's business.” Third, “[t]he person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed." In A Place For Rover, Sportsman established all three elements: as she had full control of the pet care services she offered, used the marketplace Rover offered but had the independent ability to promote herself and change her rates, and was self-established in the trade of dog sitting and dog walking, even endorsing herself as having “35 years of experience.”
Further, the court came to the same conclusion under the Borello test. The Borello test first considers the “primary control factor:” if “ the person to whom service is rendered has the right to control the manner and means of accomplishing the result desired.” The Borello test places the most importance on the primary control factor, however, “secondary factors” are also considered. These “secondary factors” include if the service is “in a distinct occupation or business,” the type of occupation and if it is usually supervised, the skill needed for the occupation, if “the principal or the worker supplies the instrumentalities, tools, and the place of work for the person doing the work,” how long the services will be performed for, if the worker is paid for the amount of time worked or for the specified job, “whether or not the work is a part of the regular business of the principal,” and “whether or not the parties believe they are creating the relationship of employer-employee.”
Under both tests, the court found that Sportsman was an independent contractor. The court reasoned that “[s]he had complete control over which pet care services to offer, what rate to charge for each service, where to provide the services, how to provide the services, and if and when to provide the services by setting her own schedule and deciding whether to accept a booking request.” Additionally, Sportsman used Rover as a platform to run an independent business by advertising and differentiating herself from other pet sitters and walkers. The court stated that the app was very similar to a website that allows sellers to promote themselves and connect with buyers.
The trend appears to be that many app-based workers partaking in California’s gig economy are classified as independent contractors. However, with the gig economy growing into other professions over time, there is a possibility that an app-based workforce could be classified differently.
Ally Chebuhar is a second-year law student at Wake Forest University School of Law. At Washington and Lee University, she majored in Global Politics with a double minor in Mass Communications and Middle Eastern & South Asian Studies. She intends to pursue a career in employment law.