Grubhub Pays $24.75 Million to Settle Gig Worker Misclassification Lawsuit
On January 15, 2026, U.S. District Judge Jacqueline S. Corley approved a $24,750,000 class action settlement resolving nearly a decade of litigation over Grubhub’s alleged misclassification of California delivery drivers as independent contractors.
The Law Offices of Todd M. Friedman, P.C. served as co-counsel for the plaintiffs alongside Lichten & Liss-Riordan P.C. in the case captioned Rael Lawson and Rejenna Marshall v. Grubhub Holdings Inc., No. 3:15-cv-05128-JSC (N.D. Cal.).
“This settlement represents years of persistence on behalf of workers who were denied basic wage protections. Misclassification is one of the most pervasive forms of wage theft in today’s economy.” — Todd M. Friedman
How the Case Began
The litigation traces back to September 2015, when a Grubhub delivery partner filed a class action complaint in San Francisco Superior Court alleging the company misclassified its California drivers as independent contractors rather than employees. The complaint raised multiple wage-related violations, including:
- Failure to reimburse business expenses
- Failure to provide itemized wage statements
- Failure to pay minimum wage and overtime
- Violations of California’s Unfair Competition Law
A Case Shaped by Landmark California Labor Law
The litigation spanned one of the most turbulent periods in California gig economy law. Several major legal developments shaped the case’s trajectory:
In 2018, the California Supreme Court issued its ruling in Dynamex Operations West, Inc. v. Superior Court, adopting the “ABC test” for determining whether workers qualify as employees under California wage orders. The following year, the Legislature codified the ABC test statewide through Assembly Bill 5 (AB 5), effective January 1, 2020.
Courts ultimately found that while Lawson was properly classified as an independent contractor for expense reimbursement purposes, Grubhub failed to satisfy AB 5’s business-to-business exemption and Prong B of the ABC test — meaning it misclassified Lawson as an independent contractor for minimum wage and overtime purposes.
The case also unfolded alongside the passage of Proposition 22 in 2020, which created a carve-out for app-based transportation and delivery companies, adding further complexity to the already evolving legal landscape.
Five Mediations Over Nine Years
The parties participated in five separate private mediations over the course of the litigation — including sessions before respected mediator Mark S. Rudy and retired U.S. Magistrate Judge Joseph C. Spero — before reaching the final $24,750,000 settlement agreement in 2025.
What This Means for Gig Workers
This settlement underscores that California’s worker classification laws carry real teeth — and that gig platforms cannot shield themselves from wage liability simply by labeling workers as independent contractors. If you work for a delivery app, rideshare platform, or any gig service and believe you have been denied minimum wage, overtime pay, or expense reimbursements, you may have a claim.
The Law Offices of Todd M. Friedman, P.C. handles employment and wage-and-hour cases on a contingency fee basis — meaning you pay nothing unless we win.
About the Law Offices of Todd M. Friedman, P.C.
Todd M. Friedman is a nationally recognized consumer rights and employment attorney. He has received 11 consecutive Super Lawyers designations (2016–2026), holds an AV Preeminent rating from Martindale-Hubbell, and has helped recover nearly $1 billion for clients across class action, wage-and-hour, and consumer protection matters. The firm maintains offices in Los Angeles, Chicago, Cleveland, and Philadelphia.
If you believe you have been misclassified as an independent contractor, contact our office for a free consultation: 323-690-1688 or visit toddflaw.com/.
