Attorney General Schwalb Requires Delivery Company to Repay District Workers Deprived of Wages and Benefits

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.

 

What is Worker Misclassification?

Under DC law, businesses must pay employees a minimum wage of $17.95 per hour, provide overtime pay, allow workers to accrue paid sick leave, and contribute toward their federal and state taxes. Businesses do not have the same legal responsibilities to independent contractors, who must pay all their own taxes, are not protected by most wage-and-hour laws, and do not have access to workers’ compensation or unemployment insurance.

Businesses must meet specific legal requirements to classify workers as independent contractors instead of employees. However, some companies misclassify workers as independent contractors to reduce costs, evade taxes, and strip workers of labor protections

 

OAG’s Efforts to Protect Workers   

OAG’s Workers’ Rights and Antifraud Section is dedicated to fighting wage theft, protecting District workers and ensuring that businesses in the District compete on a level playing field. Since AG Schwalb became the District’s elected, independent Attorney General in January 2023, OAG has secured more than $20 million for workers and the District. In total, since gaining independent wage theft enforcement authority in 2015, OAG has secured over $35 million by investigating and bringing enforcement actions against employers who violate District law. OAG’s wage theft enforcement efforts have focused on industries with high populations of vulnerable workers, such as construction, restaurants and hospitality, healthcare, and the gig economy.

 

How to Report Wage and Hour Violations

Workers who believe that their rights have been violated, or that they have experienced wage theft or other wage and hour violations, can contact OAG by calling (202) 724-7730 or emailing workers@dc.gov or trabajadores@dc.gov.