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Food delivery giant Grubhub has secured final court approval for an nearly $25 million class action settlement resolving a long-running lawsuit with approximately 60,000 California delivery drivers.
In a major legal victory for gig economy workers, a federal judge has granted final approval to an nearly $25 million class action settlement resolving decade-long legal claims that food delivery platform Grubhub misclassified its drivers as independent contractors, failing to pay minimum wage or reimburse job expenses.
The court-approved settlement resolves claims for approximately 60,000 delivery drivers across California who completed deliveries on the Grubhub app over more than 11 years.
The lawsuit against Grubhub traces back to November 2015, when Los Angeles delivery driver Raef Lawson filed a lawsuit challenging the food delivery giant’s labor practices. Lawson, an aspiring actor who drove for Grubhub for four months, alleged that the company cheated him out of legal minimum wages and mandatory vehicle expense reimbursements by labeling him as an independent contractor rather than a formal employee.
What started as a single driver’s complaint grew into a marathon decade-long legal battle in federal court. U.S. District Judge Jacqueline Scott Corley initially ruled in favor of Grubhub following a 2018 trial. However, after the Ninth Circuit Court of Appeals sent the case back for reconsideration, Judge Corley reversed course in 2021, ruling that Lawson had indeed been an employee under California law.
At a final approval hearing in San Francisco, Judge Corley signed off on the $25 million settlement, marking the end of her longest-running case. “Alright, now is my final approval of this, my oldest case, that has, of course, went through many iterations and change in law,” Judge Corley said during the proceeding.
Judge Corley praised the overall participation rate and handling of the claim distribution process. “Kudos, to the claims administrator that the plaintiffs selected, I think they did an excellent job,” she noted. “Very few opt-outs and only one objection. So, I think that speaks to the quality of this settlement, and we did a lot of work to get it there.”
Plaintiff attorney Shannon Liss-Riordan, who represented the drivers alongside co-counsel, welcomed the final approval. “We are pleased this long-running case has reached conclusion and look forward to distributing the settlement to Grubhub drivers,” Liss-Riordan stated.
For millions of everyday gig economy workers, platform apps offer flexible scheduling and immediate income. However, when delivery platforms classify workers as independent contractors instead of traditional W-2 employees, essential worker protections guaranteed by state and federal labor laws are stripped away.
When companies classify workers as contractors, drivers are forced to bear the heavy financial burden of job-related operating expenses out of their own pockets. For delivery drivers, these costs accumulate rapidly and include:
Fuel and Vehicle Maintenance: Gas, oil changes, tire wear, and routine vehicle servicing required to keep delivery cars on the road.
Auto Insurance and Depreciation: Rapid vehicle value loss due to high mileage, along with increased commercial auto insurance costs.
Unpaid Idle Time: Time spent waiting for delivery requests or standing inside restaurants waiting for orders to be prepared, which is often uncompensated.
Lack of Mandatory Benefits: Absence of state disability insurance, worker’s compensation coverage, paid sick leave, or guaranteed minimum wage floors.
By misclassifying workers, app-based delivery platforms can shift core operating expenses onto everyday drivers. When expenses are deducted from gross earnings, a driver’s actual take-home pay can drop far below the legal minimum wage.
California maintains some of the nation’s strongest statutory worker protections. Under California Labor Code Section 2802, employers are strictly required to indemnify employees for all necessary expenditures or losses incurred in direct consequence of discharge of their duties. This means companies must reimburse workers for business-related mileage and vehicle costs.
The Grubhub lawsuit also relied heavily on California’s Private Attorneys General Act (PAGA). PAGA is a unique state statute that empowers aggrieved employees to file lawsuits on behalf of the state Labor and Workforce Development Agency to collect civil penalties for labor code violations affecting an entire workforce.
Under PAGA, 75% of recovered civil penalties are distributed to the state for labor law enforcement, while the remaining 25% is distributed directly to affected workers. Because PAGA claims address systemic labor violations across entire companies, they serve as a critical tool for holding large corporations accountable when individual wage claims might otherwise be buried in private arbitration.
The litigation also navigated major shifts in California law over the past decade, including the passage of Proposition 22 in November 2020. Prop 22 exempted app-based ride-share and delivery platforms from treating drivers as full employees, provided companies offer certain alternative health stipends and minimum earnings guarantees. The finalized settlement resolves driver claims spanning both pre- and post-Prop 22 time periods through March 2026.
You may be eligible to receive a direct cash payout from this $25 million settlement if you delivered food for Grubhub in California during the qualifying period.
According to court filings, the settlement class encompasses:
Any individual who agreed to use the Grubhub platform as an independent contractor to perform delivery services within the state of California.
Drivers who accepted or completed at least one delivery on the Grubhub app between December 3, 2014, and March 13, 2026.
The settlement class covers approximately 60,000 past and present California delivery drivers. Lead plaintiff Raef Lawson, who initiated the lawsuit in 2015, will receive a $10,000 service award in recognition of his decade of service representing the worker class.
The $24.95 million gross settlement fund provides direct cash recovery for class members after court-approved litigation costs and administrative fees are deducted. Judge Corley awarded $6.18 million in attorney fees—capping fees at the standard 25% benchmark—and approved approximately $433,000 for litigation expenses and claims administration.
Every eligible driver who is part of the settlement class will receive a cash payment, with individual payout amounts calculated using an objective formula:
| Payout Category | Distribution Criteria |
| Minimum Guaranteed Payment | Every valid class member will receive no less than $25, regardless of total delivery volume. |
| Proportional Mileage Award | Additional payout amounts above $25 are calculated based on the total number of miles covered while completing deliveries during the class period. |
| Payment Distribution Method | Payouts will be sent directly via paper checks or electronic deposit methods managed by the court-appointed settlement administrator. |
Because the settlement administrator already maintains driver delivery and mileage records provided by Grubhub, identified class members were notified directly via email, mail, and text message regarding their estimated payout tier.
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