Lawson v. Grubhub

Background

Raef Lawson brought a representative California Private Attorneys General Act claim alleging that Grubhub unlawfully classified food-delivery drivers as independent contractors. He alleged that the classification caused Grubhub to fail to reimburse necessary expenses and pay minimum and overtime wages. Rejenna Marshall was later added as a named plaintiff to represent drivers who worked for Grubhub after Proposition 22 took effect.

The case had already involved extensive litigation. After an initial bench trial, the court found Lawson properly classified as an independent contractor under the then-applicable test and entered judgment for Grubhub. The Ninth Circuit later sent the case back for further proceedings. On remand, the court found that a different California test applied to Lawson’s minimum-wage and overtime claims and that Grubhub misclassified him as an independent contractor for those claims. The court also limited the period and types of PAGA penalties Lawson could pursue. The parties reached a settlement before a planned trial on PAGA penalties.

Settlement Terms

The proposed settlement class includes individuals who agreed to use Grubhub’s platform as independent contractors to provide delivery services and completed at least one delivery in California from December 3, 2014, through the date of preliminary approval.

Grubhub will pay a total of $24,750,000. Subject to court approval, the agreement permits deductions of $260,000 for settlement administration, up to $8,250,000 for attorneys’ fees and costs, service awards of up to $100,000 for Lawson and $5,000 for Marshall, and $2,000,000 for released PAGA claims. Seventy-five percent of the PAGA amount will be paid to the California Labor and Workforce Development Agency. The remaining money will be distributed pro rata based on each participating class member’s miles traveled using Grubhub’s platform, with no participating class member receiving less than $25. The settlement fund will not return undistributed money to Grubhub.

The release is broad. It covers claims based on the alleged misclassification and the facts in the amended complaint, including employment, wage-and-hour, expense-reimbursement, meal-and-rest-period, wage-statement, unfair-business-practices, and PAGA claims. It also releases certain unasserted Fair Labor Standards Act claims. The notice tells class members that they must exclude themselves if they want to preserve those Fair Labor Standards Act claims.

Conditional Certification

The court provisionally certified the settlement class under Federal Rule of Civil Procedure 23. It found the requirements for a class action satisfied, including sufficient size, common questions, typical claims, and adequate representation. Simpluris estimated that the class contained approximately 62,000 members. The court also found that common issues predominated and that a class action was the superior method for resolving the dispute.

The court conditionally certified the Fair Labor Standards Act collective action for settlement purposes, finding that the drivers were similarly situated because Grubhub classified all of them as independent contractors. A collective action under that statute allows similarly situated employees to participate, but members generally must affirmatively opt in; the settlement notice separately addresses the release of unasserted claims through the opt-out settlement.

Preliminary Approval and Notice

The court found that the settlement appeared to result from serious, informed, and non-collusive negotiations. The parties had completed a bench trial concerning Lawson’s individual claims, exchanged nearly 100 million rows of data relevant to potential PAGA penalties, and participated in five mediations over approximately ten years. The court also found no apparent preferential treatment or obvious deficiency at the preliminary stage.

The court concluded that the settlement was within the possible range of approval when the proposed recovery was weighed against the risks and costs of continued litigation. Plaintiffs estimated potential PAGA penalties of approximately $890 million, but Grubhub presented evidence that it could not pay more than $24.75 million. The court preliminarily found the settlement fair, reasonable, and adequate, while deferring final review of the requested service awards and attorneys’ fees.

The court approved the notice plan subject to one revision. Simpluris must first send notice by email and use mail and additional address searches for undeliverable emails. Class members will have 60 days to submit a claim, request exclusion, or object. The notice must explain the settlement, the release, the available choices, the fee request, and the consequences of taking no action. Plaintiffs must revise it to state that the final approval hearing will occur by Zoom only.

Attorneys’ Fees and Case Schedule

The agreement permits Class Counsel to seek up to $8,250,000 in fees and costs, or 33.3 percent of the total settlement amount. The court did not decide whether that amount is reasonable. It ordered Class Counsel to file a fee motion with declarations and detailed billing information so the court and class members can evaluate the request and object if they wish.

Judge Jacqueline Scott Corley granted preliminary approval of the class and collective action settlement. The court provisionally certified the settlement class, conditionally appointed Lawson and Marshall as class representatives, and conditionally appointed Lichten & Liss-Riordan P.C. and the Law Offices of Todd M. Friedman, P.C. as Class Counsel. Notice was ordered within 20 days of the order; the deadline for claims, exclusion requests, and objections was set for June 18, 2026; the motion for final approval was due July 16, 2026; and the final approval hearing was set for July 30, 2026, at 9:00 a.m. by Zoom. The order grants preliminary approval, not final approval.