The Office of the Attorney General for the District of Columbia announced that a settlement with a company that misclasssified delivery drivers as independent contractors. Notabley, the settlement prohibits the company from mandatory arbitration agreements for five years.
DeliverThat Will Reclassify Eligible DC Drivers as Employees, Pay Penalties to District
Attorney General Brian L. Schwalb today announced that Zinoff & Company, LLC (doing business as “DeliverThat”), will pay $100,000 to impacted workers and the District for engaging in an illegal misclassification scheme through which it denied its delivery workers the wages and benefits they are legally entitled to by misclassifying them as independent contractors rather than employees, in violation of DC’s Minimum Wage Revision Act, Wage Payment and Collection Law, and Sick and Safe Leave Act.
“DC residents rely on the convenience and reliability of food delivery services, and that is why it is critical that we protect the workers who are the backbone of this industry—delivery drivers. District businesses cannot cut corners and cheat their workers by misclassifying them as independent contractors,” said Attorney General Schwalb. “Today’s settlement holds DeliverThat accountable, puts wages back in the pockets of DeliverThat’s drivers and ensures a level playing field for competitors who play by the rules.”
DeliverThat is a gig food delivery company that specializes in large catering orders. Its contracted delivery drivers pick up catering orders from restaurants and deliver them to those restaurants’ customers. OAG’s investigation revealed that through its misclassification scheme, DeliverThat failed to pay workers minimum wage and overtime pay, failed to pay workers for split shifts, and failed to provide workers paid sick leave. DeliverThat classified 133 of its District workers as independent contractors, despite exercising enough control over its delivery drivers that they should have been considered employees.
Under the terms of the settlement, DeliverThat will:
- Pay $70,000 to 133 impacted workers.
- Pay $30,000 in civil penalties to the District.
- Reclassify its District delivery drivers who spend more than 50% of their working time in the District from independent contractors to employees.
- Rescind forced arbitration clauses and not enter into any forced arbitration agreements with workers for the next five years. Forced arbitration clauses prevent workers from bringing claims in court when their legal rights are violated by instead channeling harmed individuals into private and confidential arbitral forums. Forced arbitration agreements allow companies to conceal their law violations from other workers and from the public.
- Not enforce any non-solicitation clauses in its contracts with restaurants. Non-solicitation clauses prevent employers, like DeliverThat’s restaurant partners, from directly employing certain workers, like DeliverThat drivers, which unfairly reduces job opportunity and competition.
A copy of the settlement is available here.
This matter was handled by Assistant Attorneys General Morgan Sperry and Sarah Michael Levine.
