DoorDash Drivers Underpaid? Misclassification Arbitration & Lawsuit Info

Attorneys working with ClassAction.org believe DoorDash may have violated federal and state labor laws by misclassifying drivers as independent contractors instead of employees, and they’re now gathering affected workers to take legal action.

According to several lawsuits filed against DoorDash, drivers—known as Dashers—should be classified as employees given the strict level of control DoorDash maintains over how they perform their jobs. The lawsuits argued that DoorDash illegally deprived the workers of certain benefits to which employees, unlike contractors, are entitled under state and federal labor laws, including minimum wages for all hours worked, overtime pay and reimbursement of business expenses.

The attorneys believe DoorDash drivers may be able to recover money for denied employment benefits by taking action via mass arbitration.

DoorDash Drivers: Independent Contractors or Employees?

According to the IRS, a worker is not an independent contractor if the employer controls the details of how their work is to be performed:

The general rule is that an individual is an independent contractor if the person for whom the services are performed has the right to control or direct only the result of the work and not what will be done and how it will be done.”

Importantly, just because a worker is classified as an independent contractor and receives a 1099 does not make them an independent contractor under the federal Fair Labor Standards Act (FLSA).

In this case, the attorneys believe the degree of control that DoorDash exercises over drivers and the fact that they perform delivery services that are central to DoorDash’s business indicate that drivers should be classified as employees instead of contractors.

DoorDash Driver Misclassification Lawsuits

DoorDash was hit with a proposed class action lawsuit in May 2018 that claimed the company misclassified drivers as independent contractors to avoid paying them proper wages. According to the case, DoorDash maintained a strict level of control over drivers’ job duties yet attempted to avoid its obligations under the FLSA by classifying them as contractors. The lawsuit claimed DoorDash owed drivers for unpaid minimum wages and reimbursement of “necessary” business expenses like gasoline, the costs of owning and maintaining their vehicles, and cell phone and data charges related to operating the DoorDash app. The DoorDash lawsuit was jointly dismissed in June 2022 after being sent to arbitration in October 2018.

Another DoorDash driver misclassification lawsuit filed in January 2020 claimed the company used “metrics” to control how drivers’ work was performed, including by requiring that drivers complete deliveries on time and maintain a high customer rating, completion rate and acceptance rate. Further, DoorDash reserved the right to set rates and discipline drivers by denying them access to certain jobs or even the Dasher app “for myriad reasons,” the lawsuit alleged. The case sought to represent drivers who were not subject to DoorDash’s arbitration clause (more on this below).

Is This a Lawsuit? What Am I Signing Up For, Exactly?

You are not signing up for a lawsuit, but rather a process known as mass arbitration. This is a relatively new legal technique that, like a class action lawsuit, allows a large group of people to take action and seek compensation from a company over an alleged wrongdoing. Here is a quick explanation of mass arbitration from our blog:

“[M]ass arbitration occurs when hundreds or thousands of consumers file individual arbitration claims against the same company over the same issue at the same time. The aim of a mass arbitration proceeding is to grant relief on a large scale (similar to a class action lawsuit) for those who sign up.”

DoorDash’s independent contractor agreement contains both a class action waiver and an arbitration clause requiring drivers to resolve disputes via arbitration, a form of alternative dispute resolution that takes place outside of court before a neutral arbitrator, as opposed to a judge or jury. It’s for this reason that attorneys working with ClassAction.org have decided to handle this matter as a mass arbitration rather than a class action lawsuit.

Notably, in February 2020, a federal judge ordered DoorDash to pay $9.5 million in arbitration fees for over 5,000 delivery drivers who filed arbitration claims against the company over potential misclassification as independent contractors.

How Much Does This Cost?

It costs nothing to sign up, and you’ll only need to pay if the attorneys win money on your behalf. Their payment will come as a percentage of your award.

If they don’t win your claim, you don’t pay.

How Much Money Could I Get?

There are no guarantees as to how much money you could get or whether your claim will be successful. However, DoorDash drivers may be able to recover money for unpaid wages, unreimbursed expenses or other denied employment benefits.

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