Postmates will pay $85,000 to settle a class action lawsuit with drivers and riders who claimed that the on-demand delivery app did not properly pay its drivers their tips.

On July 1, U.S. Magistrate Judge Jennifer Boal granted preliminary approval of the settlement deal which was reached in August 2018.

The $85,000 will be put into a fund and will be held until Class Members have an opportunity to review and/or object to the settlement.

Class Members eligible for benefits under the Postmates class action settlement includes all independent delivery workers who made deliveries for Postmates between June 27, 2014 and July 1, 2019. The Class excuses delivery people who signed arbitration agreements with Postmates.







How much each Class Member receives is based on how many deliveries they made during the Class period. However, each Class Member will receive at least $50 in compensation.

The Postmates tips class action lawsuit was originally filed in the Suffolk County Superior Court in Boston in June 2017 by Benjamin Sasoon, Marga Celado, Jordan Niles, and Bianca Tsolias. Niles and Tsolias later left the Postmates class action lawsuit because they signed arbitration agreements.

For their roles as Class representatives, Sasoon and Celado will receive around $2,500 each from the $85,000. Another $2,500 will be used to cover administrative expenses, and attorneys were authorized to request up to one third of the settlement amount — $28,333.33 for fees, as well as $1,600 for attorneys expenses.

In their Postmates class action lawsuit, the delivery workers claimed that Postmates violated the Massachusetts Tip Act because the company did not tell customers that a delivery fee also include tips for drivers. Additionally, the delivery employees argued that the company improperly retained a portion of the delivery fee.

The plaintiffs said that both employees and independent contractors working with Postmates were “deprived of compensation to which they are entitled.”







Postmates did challenge these claims by saying that the contractors could not file claims under the Massachusetts Tip Act because the delivery fee was not actually a tip meant for delivery workers as claimed in the Postmates class action lawsuit.

Additionally, the company argued that the Federal Aviation and Administration Authorization Act preempts the Massachusetts Tip Act because it bars state and local laws from regulating transporter routes or prices.

Postmates does not admit any wrongdoing, and maintains that the fees at issue are not in fact tips as defined by the Massachusetts Tip Act, but has agreed to settle the tips class action lawsuit to avoid further costs of litigation.

The Postmates class action settlement final approval hearing has been scheduled for Nov. 6, 2019.

Top Class Actions will post updates to this class action settlement as they become available. For the latest updates, keep checking TopClassActions.com or sign up for our free newsletter. You can also receive notifications when this article is updated by using your free Top Class Actions account and clicking the “Follow Article” button at the top of the post.







The delivery employees are represented by James D. Livingstone and John P. Regan Jr. of The Employee Rights Group LLC.

The Postmates Delivery Fee Class Action Lawsuit is Sasoon, et al. v. Postmates Inc., Case No. 1:17-cv-11397, in the U.S. District Court for the District of Massachusetts.