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In re Claim of Vega

Supreme Court of New York, Third Department

June 21, 2018

In the Matter of the Claim of LUIS A. VEGA, Respondent. POSTMATES INC., Appellant. COMMISSIONER OF LABOR, Respondent.

          Calendar Date: March 27, 2018

          Quinn Emanuel Urquhart & Sullivan, LLP, New York City (David M. Cooper of counsel), for appellent.

          Francis J. Smith, Albany, for Luis A. Vega, respondent.

          Barbara D. Underwood, Attorney General, New York City (Mary Hughes of counsel), for Commissioner of Labor, respondent.

          Before: Egan Jr., J.P., Lynch, Devine, Clark and Mulvey, JJ.

          MEMORANDUM AND ORDER

          Egan Jr., J.P.

         Appeal from a decision of the Unemployment Insurance Appeal Board, filed September 29, 2016, as resettled by a decision filed October 11, 2016, which ruled, among other things, that Postmates Inc. was liable for additional unemployment insurance contributions on remuneration paid to claimant and others similarly situated.

         Postmates Inc. operates a web-based platform that allows customers to request on-demand pick-up and delivery service from local restaurants or stores, which deliveries are usually made within about an hour. Claimant, who was engaged as a courier for Postmates, applied for unemployment insurance benefits after Postmates terminated its relationship with him based upon alleged negative consumer feedback and/or fraudulent activity. The Unemployment Insurance Appeal Board, reversing a decision by an Administrative Law Judge, determined that an employer-employee relationship existed and deemed Postmates liable for additional unemployment insurance contributions on remuneration paid to claimant and those similarly situated. Postmates now appeals, and we reverse. [1]

         "Whether an employer-employee relationship exists is a question of fact, to be decided on the basis of evidence from which it can be found that the alleged employer exercises control over the results produced... or the means used to achieve the results" (Matter of Charles A. Field Delivery Serv. [Roberts], 66 N.Y.2d 516, 521 [1985] [internal quotation marks and citation omitted]; see Matter of Bogart [LaValle Transp., Inc.-Commissioner of Labor], 140 A.D.3d 1217, 1218 [2016]). The Board's determination of an employment relationship will be upheld if supported by substantial evidence; however, "[i]ncidental control over the results produced - without further evidence of control over the means employed to achieve the results - will not constitute substantial evidence of an employer-employee relationship" (Matter of Empire State Towing & Recovery Assn., Inc. [Commissioner of Labor], 15 N.Y.3d 433, 437 [2010] [internal quotation marks and citation omitted]; see Matter of Hertz Corp. [Commissioner of Labor], 2 N.Y.3d 733, 735 [2004]; Matter of Courto [SCA Enters. Inc.-Commissioner of Labor], 159 A.D.3d 1240, 1241 [2018]).

         Here, in order to work as a courier or delivery professional for Postmates, claimant and others similarly situated need only download Postmates' application software platform and provide his or her name, telephone number, Social Security number and driver's license number; there is no application and no interview. Although Postmates thereafter obtains a criminal background check from a third-party provider and provides an orientation session on how to utilize the application software platform, significantly, claimant and those similarly situated are not thereafter required to report to any supervisor, and they unilaterally retain the unfettered discretion as to whether to ever log on to Postmates' platform and actually work. When a courier does elect to log on to the platform, indicating his or her availability for deliveries, he or she is free to work as much or little as he or she wants - there is no set work schedule, there is no minimum time requirement that a courier must remain logged on to the platform and there is no minimum or maximum requirement with respect to the number of deliveries a courier must perform. In fact, once logged on to the platform, a courier may decline to do anything. When a customer requests a delivery using Postmates' platform, the platform identifies the closest available courier(s) and sends basic information about the delivery request. Couriers, however, may accept, reject or ignore a delivery request, without penalty. Moreover, while logged on to Postmates' platform, couriers maintain the freedom to simultaneously work for other companies, including Postmates' direct competitors. Further, they are free to choose the mode of transportation they wish to use for deliveries, they provide and maintain their own transportation, they choose the route they wish to take for the delivery, they are not required to adhere to a stringent delivery schedule, they are not required to wear a uniform, they are not provided any identification card or logo, they are only paid for the deliveries they complete and they are not reimbursed for any of their delivery-related expenses.

         While proof was submitted with respect to Postmates' incidental control over the couriers, including, among other things, 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 (see Matter Yoga Vida NYC, Inc. [Commissioner of Labor], 28 N.Y.3d 1013, 1016 [2016]; Matter of Courto [SCA Enters. Inc.-Commissioner of Labor], 159 A.D.3d at 1241-1242). Thus, on the record before us, we find that the Board's decision is not supported by substantial evidence as the relationship between claimant and Postmates lacks the requisite indicia of supervision, direction and control necessary to establish an employer-employee relationship (see Matter Yoga Vida NYC, Inc. [Commissioner of Labor], 28 N.Y.3d at 1015-1016; Matter of TMR Sec. Consultants, Inc. [Commissioner of Labor], 145 A.D.3d 1402, 1403-1404 [2016]; Matter of Bogart [LaValle Transp., Inc.-Commissioner of Labor], 140 A.D.3d at 1219; Matter of Chan [Market Force Info.-Commissioner of Labor], 128 A.D.3d 1146, 1146-1147 [2015]; Matter of Jennings [American Delivery Solution, Inc.-Commissioner of Labor], 125 A.D.3d 1152, 1153 [2015]; Matter of Holleran [Jez Enters., Inc.-Commissioner of Labor], 98 A.D.3d 757, 758-759 [2012]; compare Matter of Crystal [Medical Delivery Servs.-Commissioner of Labor], 150 A.D.3d 1595, 1597 [2017]). Accordingly, the Board's decision must be reversed.

          Devine and Mulvey, JJ., concur.

          Lynch, J. (dissenting).

         We respectfully dissent. The record establishes that Postmates, Inc. advertises for and conducts criminal background checks on couriers. It provides an informational session for the couriers on how to utilize the application software platform in order to accept delivery assignments. Postmates provides couriers with a PEX reloadable credit card onto which it can load money in the event that a customer requests that a courier also purchase an item to be delivered. Couriers sign an independent acknowledgment agreement, indicating the mode of transportation they will use for deliveries (e.g., walk or drive). Couriers ...


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