Federal Judge Approves $24.75M Settlement for Grubhub Drivers
A federal judge approved a $24.75 million settlement for California Grubhub drivers.
Why it matters: This settlement highlights growing legal scrutiny of gig economy worker classification and offers a precedent for class actions against major platforms. Legal counsel and companies must prepare for continuing class action risks in this evolving area.
- Settlement amount: $24.75 million approved on July 30, 2026.
- Class covers Grubhub drivers in California using the app from Dec 3, 2014, to Mar 13, 2026.
- Minimum $25 payout per valid claim; total payments based on miles driven.
- $2 million allocated for penalties under California's PAGA, split 75% to state and 25% to drivers.
On July 30, 2026, a federal judge gave final approval to a $24.75 million settlement in the Lawson v. Grubhub Holdings Inc. class action that challenged Grubhub's classification of its California delivery drivers as independent contractors. The class includes current and former drivers who used the Grubhub app between December 3, 2014, and March 13, 2026.
Drivers submitting valid claims will receive at least $25, with the payout amount adjusted based on their estimated delivery miles driven via the platform. The settlement also earmarks $2 million for penalties under the Private Attorneys General Act (PAGA), with 75% of that paid to the State of California and the remaining 25% distributed among class members. Plaintiffs' counsel intend to seek up to $8.25 million in attorney fees, approximately one-third of the settlement fund.
This settlement follows a 2024 enforcement action where Grubhub agreed to pay $25 million to the Federal Trade Commission and Illinois Attorney General to resolve allegations related to deceptive practices harming diners, workers, and small businesses. The 2024 settlement required Grubhub to disclose delivery costs transparently and prevent undisclosed fees.
The case reflects expanded legal and regulatory focus on gig economy companies handling of worker classification and business transparency. Companies and their legal teams should note the settlement's implications for class action litigation risks and compliance obligations in gig economy operations.
The deadline for drivers to submit claims or opt out closed on June 18, 2026, and the final approval hearing was held via Zoom. While details on distribution timelines remain unavailable, this approval marks the culmination of years of litigation efforts to secure compensation for gig workers.
By the numbers:
- $24.75 million — total settlement amount approved July 30, 2026
- $2 million — penalties allocated under the Private Attorneys General Act
- $25 million — prior 2024 settlement paid to FTC and Illinois Attorney General