Square Reaches $2.2M Delivery Tip Class Action Lawsuit

Square has agreed to pay $2.2 million to settle a class action alleging that Caviar, the company’s delivery service, collects tips which are not given to drivers.

Around 93,000 Class Members have received notice of the Square class action settlement which was preliminarily approved last month. The Class is comprised of customers who ordered food through Caviar between Jan. 20, 2012 and Aug. 31, 2015.

Of the $2.2 million settlement, a maximum of $1,435,000 will be distributed to consumers in credits which can be used for Caviar orders. Each Class Member would receive around $15.28 in transferable credits which expire 180 days after activation.

Should Class Members wish to not be included in the settlement, they are to send their request to the Claims Administrator before July 27, 2018. The final approval hearing is scheduled for Sep. 21, 2018.

Plaintiff lawyers are expected to receive 34 percent of the settlement in a payment of about $775,000. Another $10,000 will be awarded to lead plaintiff Spencer Janssen and $60,000 will be paid in compensation for the costs of administrating the settlement.

Janssen filed the Square, Caviar class action lawsuit alleging that the delivery service did not pay tips to delivery drivers. Janssen allegedly used Caviar for online ordering several times during 2015.

He says he was required to pay a 18 percent gratuity on all purchases, which he claims was not paid to delivery drivers. In his Square class action lawsuit, Janssen did not state how he determined that delivery drivers were not receiving the paid gratuity.

Caviar reportedly stated at checkout that its services do not include a delivery fee. “At all times, through this service, it was represented to customers that this in fact was a tip, as opposed to a service fee,” Janssen states.

Both Square and Caviar have denied any wrongdoing, stating that the tips collected were paid to independent contractor couriers. Square Inc. “took the position that the use of the term ‘gratuity’ was neither misleading to reasonable consumers nor unlawful.” Square reportedly removed the gratuity portion on customer invoices as of Aug. 21, 2015.

“We have chosen to settle this matter to avoid the cost and distraction of litigation and provide direct benefit to our valued customers,” said a Caviar spokesperson in a statement to Law360.

Although agreeing to a settlement does not result in a final ruling or determination of wrongdoing, settling a lawsuit or class action lawsuit is often a more attractive option to both plaintiffs and defendants.

Settlements are typically lower in monetary value than damages originally sought, lowering the potential monetary burden on defendants. Settlements benefit plaintiffs by ensuring a monetary award without the risks that a judge may dismiss claims.

Additionally, settling a class action lawsuit means both defendants and plaintiffs do not have to pay the costs associated with continued litigation.

Top Class Actions will post updates to this class action settlement as they become available. For the latest updates, keep checking TopClassActions.com or sign up for our free newsletter. You can also receive notifications when this article is updated by using your free Top Class Actions account and clicking the “Follow Article” button at the top of the post.

Janssen is represented by Joshua G. Konecky and Nathan B. Piller of Schneider Wallace Cottrell Konecky Wotkyns LLP; and Jeremy Pasternak and Deanna Maxfield of the Law Offices of Jeremy Pasternak.

The Square, Caviar Delivery Tips Class Action Lawsuit is Janssen v. Square Inc., et al., Case No. CGC-­16-­549980, in the Superior Court of California for the County of San Fransisco.