NY Attorney General Seamless/Grubhub Investigation

After an investigation conducted by New York State’s Attorney General, Eric Schneiderman, Seamless, the popular online food-delivery company, will change its fee structure for any new restaurant that signs up for the service – existing restaurants that use Seamless must adopt the changes over the next 12 months.

Seamless collects a percentage of every total bill from each of its partner restaurants, including tips. While Seamless did not break any laws, its fee structure allowed restaurants to potentially withhold portions of gratuities from workers, which is a violation of the New York Labor Law. Furthermore, the new agreement will also tell partner restaurants what their legal obligations are pertaining to tips and other laws that protect workers.

This investigation by the Attorney General began in March 2013 after a lawsuit was filed against Indus Valley for allegedly taking a percentage of tips intended for delivery drivers from orders coming through Seamless and GrubHub. The case eventually settled for $276,000 on behalf of 12 plaintiffs.

If you work for a restaurant that uses Seamless or GrubHub, please contact the employment lawyers at Fitapelli & Schaffer, LLP, (212) 300-0375, so we can discuss your rights under the Fair Labor Standards Act and the New York Labor Law.