Grubhub $24.75 Million Settlement for California Misclassified Delivery Drivers

Grubhub agreed to pay **$24.75 million** to settle a long-running class action in which California delivery drivers alleged the company **misclassified them as independent contractors** rather than employees. According to the lawsuit filed in **2015** (Lawson et al. v. Grubhub Holdings Inc.), that misclassification meant drivers were allegedly denied key protections under **California labor law**, including **minimum wage and overtime**, as well as **reimbursement for required work expenses** such as gas and vehicle maintenance. The settlement covers qualifying Grubhub drivers in California who completed at least one delivery during roughly **Dec. 3, 2014 through Mar. 13, 2026**, with payments calculated based on **miles driven** and a **minimum of $25** for valid claims. The case was filed to challenge whether algorithm-driven “gig” work should fall under **employee wage-and-hour rules** or remain outside them under independent-contractor standards. While Grubhub disputes liability and denies that any drivers were employees, the settlement is significant because it reflects how courts and regulators increasingly scrutinize whether platform-based companies control workers in ways that trigger labor protections. It also aligns with California’s broader regulatory environment—especially **AB 5** and related “ABC test” principles used to evaluate worker classification, plus **PAGA** (Private Attorneys General Act) enforcement that can add penalties for wage-violation patterns. Similar misclassification lawsuits have been brought against other gig and delivery platforms, and outcomes like this can influence company practices, driver compensation expectations, and how workers protect their rights in other jurisdictions that may adopt similar legal tests for contractor status.