A federal judge has granted final approval to a class action settlement worth nearly $25 million for Grubhub drivers. The settlement resolves allegations that the food delivery platform misclassified workers and violated wage and hour laws.
The settlement covers thousands of Grubhub drivers who worked as independent contractors but claimed they should have been classified as employees entitled to minimum wage, overtime protections, and expense reimbursement. The drivers filed the class action lawsuit asserting that Grubhub improperly withheld wages and failed to cover work-related costs like vehicle maintenance and fuel.
The $25 million payout will be distributed among class members based on documented work performed on the platform. The settlement does not require Grubhub to reclassify its drivers as employees going forward, but the company agreed to pay the substantial sum to resolve the wage dispute claims.
This settlement reflects ongoing litigation pressures facing gig economy platforms. Companies like Grubhub, DoorDash, and Uber have faced sustained legal challenges from workers claiming misclassification. Several state ballot measures and legislation have also targeted worker classification practices in the delivery and ride-hail industries.
The federal judge's final approval follows preliminary approval and a claims period allowing drivers to submit documentation of their work history. Settlement administrators will process individual payments to qualifying class members.
The outcome provides relief for thousands of drivers but does not fundamentally alter Grubhub's business model relying on independent contractor relationships. The company continues operating with contractors rather than employees, a structure it maintains reduces labor costs while offering flexibility to workers.
Industry observers note this settlement aligns with broader trends of gig platforms resolving classification disputes through monetary payouts rather than restructuring employment relationships. However, regulatory and legislative pressure continues mounting, particularly in states like California where policymakers have pushed for stricter worker classification standards.
CATEGORY