DoorDash recently reached a settlement for a class action lawsuit against it, with payments to class members totaling $5 million.
Why Was DoorDash Sued?
In September 2015, two former employees of DoorDash filed independent lawsuits against the company. Cynthia Marciano and Evan Kissner each claimed that DoorDash had incorrectly categorized them as “independent workers,” which allowed DoorDash to exempt its employees from certain labor laws. GrubHub and Caviar were also hit with lawsuits around the same time.
DoorDash Lawsuit
Marciano and Kissner will receive $7,500 each, and the remaining portion of the $3.5 million initial settlement will be paid out equally among the over 33,000 members of the class action suit – anyone who worked for DoorDash as an independent contractor between September 2011 and August 2016. The company will pay an additional $1.5 million in four years, or when the company goes public, the company has a profitable full year, or another company purchases DoorDash for at least twice its current value, whichever comes first.
Payment will be adjusted for those who were more active on DoorDash than others, but anyone who completed at least one delivery should receive payment. Meanwhile, Shannon Liss-Riordan, the workers’ rights lawyer who argued the case, may receive up to $1.25 million, per the settlement.
What’s Ahead For DoorDash?
After such a high-priced lawsuit, DoorDash will stop classifying its employees as independent contractors, right? Wrong. Actually, the lawsuit simply required changes and clarifications in policies, with the goal of ensuring more rights for workers. The settlement does not require DoorDash workers to have employee status.
TechCrunch notes that since the settlement does not change the status from independent contractor to employee, there is nothing stopping others from bringing forth the same lawsuit in the future. However, given the high profile of Liss-Riordan, it seems unlikely that anyone would attempt another suit.
One policy that was updated recently was DoorDash’s Deactivation Policy, which ensures that workers will keep their platform access, assuming they do not clearly violate safety rules or other platform guidelines and that their acceptance rate stays above the minimum threshold.
