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New York court says Postmates courier is IC, not employee

June 22, 2018

Postmates courier Luis Vega was an independent contract, not an employee, according to a decision released yesterday by the New York Supreme Court, Appellate Division, Third Department.

The court’s 3-2 ruling reverses an earlier finding from the Unemployment Insurance Appeal Board that Postmates couriers were employees and the company was liable for paying unemployment insurance as well as other remuneration.

Postmates is an app-based courier delivery service and ranks No. 15 among the largest business-to-consumer human cloud platforms, according to a report by Staffing Industry Analysts. This decision continues to show how fraught a topic independent contractor misclassification is in the contingent workforce ecosystem. While this decision sided with human cloud firms that such workers are independent contractors, it comes shortly after a separate decision by the California Supreme Court introduced a much tougher test to determine who is an employee and who is not. The California ruling has already resulted in an appeal of a court decision in that state finding workers for human cloud platform Grubhub to be independent contractors. Postmates also recently moved to transfer a lawsuit in California to federal court in the wake of the California Supreme Court ruling.

In the New York case, Vega’s relationship with Postmates was terminated based on negative consumer feedback and/or fraudulent activity, according to the decision. Vega then applied for unemployment insurance.

The court noted in its ruling that in order to be a courier, a person only needed to download Postmates’ app and provide his or her name, telephone number, Social Security number and driver’s license number. There was no application or interview. Workers such as Vega were also not required to work at all and could set their own schedules — working as much or as little as they liked.

Other factors in its decision included that workers could work for direct competitors to Postmates, are free to choose a mode of transportation for deliveries, maintain their own transportation, are not required to wear a uniform and are not reimbursed for delivery-related expenses.

The court did note that Postmates used a third-party company to perform a background check and provided an orientation session on how to use the app. But that and other facts did not overcome the finding that couriers were independent contractors.

“While proof was submitted with respect to Postmates’ incidental control over the couriers, including, among other things,” according to the ruling, “the fact that Postmates determines the fee to be charged, determines the rate to be paid, tracks the subject deliveries in real time and handles customer complaints, in our view, such proof does not constitute substantial evidence of an employer-employee relationship to the extent that it fails to provide sufficient indicia of Postmates’ control over the means by which these couriers perform their work.”

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