Grubhub has agreed to pay $24.75 million to resolve a California class action alleging that the food-delivery platform misclassified delivery drivers as independent contractors rather than employees, depriving them of wage and benefit protections under state law [1]. The settlement covers drivers who completed at least one delivery in California between December 3, 2014, and March 13, 2026 [1].
The claims arise under California's worker-classification framework, which includes the "ABC test" codified in Assembly Bill 5 and its predecessor standards. Under that framework, a company must demonstrate, among other requirements, that a worker performs services outside its usual course of business before classifying that worker as an independent contractor. Plaintiffs alleged that Grubhub could not satisfy that standard, and that drivers were therefore entitled to minimum wage protections, expense reimbursements, and other benefits California law extends to employees. The class period predates AB5's January 2020 effective date by more than five years, reaching back to December 2014 under earlier Dynamex and Labor Code theories [1].
The settlement resolves claims without an admission of liability, a standard posture in class resolutions of this type. Class members who completed at least one qualifying California delivery during the covered period may submit claims to receive a share of the net fund after attorneys' fees, administration costs, and any service awards to named plaintiffs are deducted [1]. The precise per-driver recovery will depend on the number of valid claims filed.
The resolution adds to a pattern of gig-economy platforms negotiating eight- and nine-figure settlements rather than litigating California misclassification claims to verdict. Uber and Lyft have faced parallel class and regulatory pressure in the state, and Proposition 22, the 2020 ballot measure that carved app-based transportation and delivery drivers out of AB5, remains subject to ongoing constitutional litigation. Grubhub's agreement does not affect Proposition 22's status but reinforces that the pre-AB5 liability window remains a viable avenue for plaintiffs' counsel. Claims for the June 2026 distribution period are open to eligible class members [1].