The question in this case is whether substantial evidence supported an administrative determination that Postmates, a gig-economy delivery service, is an “employer” of its delivery workers such that it must make contributions to the state unemployment compensation system.
The State’s unemployment compensation system pays benefits to workers who lose their jobs; benefits are paid from employer contributions to the state unemployment fund. A worker is eligible for benefits if she is deemed an “employee.” In this context, a worker is an employee if the person she works for controls the “results produced” by the worker or the “means used to achieve the results” of the worker’s labor. The Commissioner of Labor determines eligibility for benefits in the first instance, subject to administrative review by the Unemployment Insurance Appeal Board.
Postmates is an internet-based pickup and delivery service. Luis Vega worked for Postmates and applied for unemployment benefits after he lost his job. The Commissioner initially granted benefits, but an administrative law judge reversed that decision after an evidentiary hearing. The Board reinstated the Commissioner’s determination, however, finding that the evidence at the hearing established that Postmates “exercised, or reserved the right to exercise, sufficient supervision, direction or control over the services” of its delivery workers to deem them employees in this context.”
A divided panel of the Third Department reversed the Board’s decision and remitted for further proceedings, finding that the hearing evidence did not establish the “requisite indicia of supervision, direction and control necessary to establish an employer-employee relationship.” In reaching this decision, the majority cited the fact that Postmates delivery workers: do not report to any supervisor; are not required to maintain regular hours or actually work; are not required to perform a minimum number of deliveries when they do work; are not prohibited from working for other companies, including Postmates’ “direct competitors”; are free to choose how and when they complete deliveries and by what route; do not wear a uniform or carry company identification; and are not reimbursed for delivery-related expenses. Given this evidence, the majority held, it was not sufficient that Postmates determined the fee to be charged to customers and the rate to be paid to delivery workers, tracked deliveries in real time, or handled customer complaints.
The dissent would have confirmed the Board’s decision. In their view, there was substantial evidence to support the Board’s determination that an employment relationship existed, even if the hearing evidence could also support a contrary conclusion.
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