Grubhub agreed to pay $24.75 million to resolve a class action lawsuit alleging that the food-delivery company misclassified California delivery drivers as independent contractors rather than employees, denying them benefits and protections required under state law [1]. The settlement covers Grubhub independent contractors who completed at least one delivery in California between Dec. 3, 2014, and March 13, 2026 [1].
The dispute centers on California's worker classification framework, including Assembly Bill 5, enacted in 2019, which codified the "ABC test" and made it substantially harder for companies to designate workers as independent contractors [1]. Under that standard, a company must demonstrate, among other things, that a worker performs tasks outside its usual course of business and operates an independent trade. Delivery drivers dispatched through app-based platforms have repeatedly failed that test in California courts and administrative proceedings. Grubhub, which operates a nationwide food-delivery marketplace, has faced sustained scrutiny from plaintiffs' counsel and state regulators over its contractor model since at least 2014, the opening date of the settlement class period [1].
The settlement resolves claims that drivers were denied minimum wage protections, expense reimbursements, and other statutory benefits owed to employees under California law [1]. Class members, those who made at least one delivery in California within the covered period, are eligible to submit claims for a proportional share of the net settlement fund [1]. The precise per-claimant payout will depend on total participation, attorneys' fees, and court-approved administrative costs, none of which have been publicly specified in available settlement documents.
The Grubhub resolution follows a broader pattern of gig-economy companies reaching nine-figure and mid-eight-figure settlements with California workers. Proposition 22, a 2020 ballot measure backed by platform companies that carved out app-based drivers from AB5, was partially struck down by a California appellate court in 2021 before being largely reinstated by the California Supreme Court in 2024, leaving the classification landscape still contested. That ongoing legal uncertainty increases the litigation risk that platforms face and provides structural incentive to settle aged class claims rather than litigate them to verdict.
With the settlement agreement in place, the next step is final court approval in the Northern District of California, where the case is venued [1]. Class members will receive formal notice and a deadline to submit claims or object. If the court approves the deal, disbursements would follow the claims administration process.