Grubhub class action settlement overview:
- Who: A Grubhub driver and the company have agreed to settle a class action lawsuit.
- Why: The driver alleged Grubhub misclassified him as an independent contractor.
- Where: The Grubhub class action lawsuit was filed in California federal court.
- How to file a claim: A settlement website was not available at publish time. Join our free newsletter to receive claim-filing instructions once they’re available.
Grubhub and a former delivery driver who accused the mobile food delivery platform of misclassifying him as an independent contractor have reached a $24.75 million class action settlement in a nearly decade-old lawsuit.
Plaintiff Raef Lawson contends that Grubhub is liable for Private Attorneys General Act (PAGA) penalties based on more than $400 million of underlying minimum wage violations.
However, Grubhub “vigorously denies the accuracy of plaintiff’s calculations and was prepared to challenge them at the remedies trial,” Lawson stated.
Lawson said there was a “real risk” the court would “significantly reduce” the PAGA penalties. He added there was also a concern that Grubhub would not be able to pay a large sum, noting that a $140 million judgment brought by the Federal Trade Commission was suspended in exchange for its agreement to pay a settlement of nearly $25 million.
The court’s discretion “presented a meaningful risk” given that it had previously held Grubhub liable for only $65.11 for his underlying minimum wage claim, Lawson said in a Law360 report.
“There can be no doubt that this is an excellent result for the class,” Lawson said. “The settlement amount of $24,750,000 provides real value to the settlement class members while defraying the significant risks.”
Grubhub class action settlement to benefit 60,000 drivers
A settlement class of about 60,000 Grubhub drivers stands to receive a significant recovery, according to Lawson’s motion.
The settlement class covers anyone who entered into an agreement with Grubhub to use its platform as an independent contractor for delivery services and who used its platform as an independent contractor service provider to accept at least one delivery in California since Dec. 2, 2014, through the time of the settlement’s preliminary approval.
Lawson, who worked as a Grubhub delivery driver in Los Angeles, lodged his lawsuit in late 2015, accusing the company of misclassifying him and other delivery drivers in California as independent contractors.
He said that Grubhub failed to pay a time-and-a-half overtime premium for hours worked beyond 40 hours per week or eight hours a day and failed to reimburse for necessary business expenses.
The $24.75 million amount is non-reversionary and will “fully resolve all the claims in this action,” Lawson said.
Earlier this year, Grubhub was hit with another lawsuit after a data breach allegedly exposed the contact information and partial payment card numbers of some users.
What do you think of the Grubhub settlement? Let us know in the comments.
Lawson is represented by Shannon Liss-Riordan and Thomas Fowler of Lichten & Liss-Riordan P.C.
The Grubhub class action lawsuit is Lawson v. Grubhub Inc., Case No. 15-cv-05128 JSC, in the U.S. District Court for the Northern District of California.
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