As we explained in our case summary, 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 Court (DiFiore, C.J.) held that Postmates is such an employer.
This case involves Luis Vega, who worked as a “courier” for Postmates. During that time, he would log into the Postmates Fleet app and could make deliveries when he chose. Vega would log into Postmates when he wanted to work. Postmates would then assign him deliveries, which he could make or decline to make. If he declined, the assignment would go back into the general delivery pool, and Postmates would assign it to someone else. Vega received a fixed percentage of the deliveries he made.
After six days working as a courier, Vega was blocked from the Postmates app because customers complained about his performance. Vega then filed a claim for unemployment-insurance, which he qualified for only if he was a Postmates “employee” under New York’s Labor Law. If, on the other hand, Vega was an independent contractor, he could not receive unemployment-insurance benefits.
The Court held that there was substantial evidence before New York’s Unemployment Insurance Appeals Board—the agency body that ultimately reviewed Vega’s insurance claim—that Vega was Postmates’ employee. The Court explained that the test for an employer-employee relationship is whether the putative employer exercises “more than incidental” control over the means or ends of the worker’s job. And the evidence before the Board, the Court’s view, could reasonably support its determination that Postmates exercised such control over Vega’s work. The Court cited, among other things, evidence that Postmates determined which couriers could make which deliveries, controlled access to deliveries by waiting until after Vega accepted a delivery request to tell him the delivery address , tracked Vega’s location in real time while he was making deliveries, provided customers an estimated delivery time, unilaterally set Vega’s compensation as a fixed percentage of each delivery fee, and unilaterally set delivery fees. The Court also stressed that customers could not specifically request Vega—or any particular courier. And although the administrative proceeding involved only Vega, the Court stated that its holding applies not just to Vega but to all similarly situated couriers.
Judge Rivera concurred in the result. She agreed with the majority that the Board’s determination that Vega was an employee was supported by substantial evidence, but believed that the Court should abandon its common-law test to determine whether an employment relationship exists. In place of that test, Judge Rivera would apply the test from the Restatement of Employment Law. Like the common-law test, the Restatement test looks at the degree of putative-employer control. But the test Restatement test differs in focus from the common-law test. While the common-law test looks at control over the means and ends of the job, the Restatement test focuses on control over independent entrepreneurial decisions. If workers exercise such control—and thus “can seek to increase their personal economic returns not simply by working harder in performing the service for the principal but also by working at their discretion for other customers, by hiring assistants and by deploying or substituting for labor their own equipment or capital”—then they are independent contractors. If, however, the putative employer controls the entrepreneurial decisionmaking, then an employment relationship exists.
Judge Wilson dissented. At the threshold, he disagreed with the majority that its decision applies to all employers similarly situated to Vega, given the Department of Labor’s admission below that the record evidence concerns only Vega’s employment status. More fundamentally, Judge Wilson disagreed with both the majority’s approach and its conclusion under that approach. As to the approach, Judge Wilson believed that the common-law test for employment relationships was outmoded, a vestige “of a time when employees received a gold watch upon retiring from the sole company at which they spent their entire careers.” The test, in his view, had become confusing, in part because of a lack of clarity in the Court’s case law about “which factors matter and why,” and is particularly ill-suited to the modern-day gig economy. He thus implored the Legislature to “complete[ly] overhaul” the test for an employment relationship. As to the majority’s conclusion, Judge Wilson believed that even under the convoluted employment-relationship test, the evidence before the Board showed that Postmates exercised less control over Vega than putative employers exercised over workers whom the Court had previously held to be independent contractors. He cited evidence that Vega could choose to ignore orders after Postmates assigned them to him, that Vega could use any mode of transportation he wished, that Vega could choose his own route to the delivery address, and that Vega could make his own schedule. Judge Wilson would have therefore held that the record lacked substantial evidence to support the Board’s determination that Vega was an employee.
Return to case page for Matter of Vega (Postmates).