Shipt, the Target-owned grocery delivery company, has faced multiple class action and government lawsuits accusing it of misclassifying its “Shoppers” as independent contractors instead of employees. The biggest resolutions so far are a $14.5 million California class action settlement in Turner v. Shipt and an $800,000 settlement with the Minnesota Attorney General. A District of Columbia Attorney General case and a California Supreme Court appeal, Leeper v. Shipt, remain unresolved. Every one of these cases turns on the same question: whether Shoppers are employees owed minimum wage, overtime, expense reimbursement, and other protections, or independent contractors who get none of those things.
Turner v. Shipt: The $14.5 Million California Settlement
The largest payout came out of Turner, et al. v. Shipt, Inc., et al., filed in Los Angeles Superior Court (Case No. 19STCV28802). Named plaintiffs Zaleka Turner, Lauren Kiktavi, and others alleged Shipt violated California labor law by treating Shoppers as contractors, which the suit said allowed the company to skip reimbursing mileage and vehicle costs, skip paying minimum wage and overtime, deny meal and rest breaks, and issue inaccurate wage statements.1Shipt Shopper Settlement California. Turner v. Shipt Settlement FAQ The complaint also brought claims under the Private Attorneys General Act (PAGA), which lets a worker sue on behalf of the state for labor code violations. Shipt denied everything.
The parties settled for $14.5 million. After attorneys’ fees of up to roughly $4.8 million, administration costs, incentive awards, and $1.16 million in PAGA penalties (of which $870,000 went to the State of California), about $8.2 million was left for the class.2Shipt Shopper Settlement California. Turner v. Shipt Settlement Home
The class covered anyone approved to shop on the Shipt platform in California who accepted or completed at least one order between September 19, 2018, and July 28, 2023. Individual payments were calculated by a points system tied to estimated miles driven. Miles before December 16, 2020, counted for three points each; miles on or after that date counted for one point. Workers who had opted out of or started arbitration before the class period cutoff got double points. The minimum payout was $10.1Shipt Shopper Settlement California. Turner v. Shipt Settlement FAQ
The claims deadline was December 4, 2023. The court held final approval on January 16, 2024, and payments were expected to go out around May 2024. The settlement process has since concluded, so this case is no longer accepting claims.1Shipt Shopper Settlement California. Turner v. Shipt Settlement FAQ
Minnesota Attorney General Settlement
In October 2022, Minnesota Attorney General Keith Ellison sued Shipt, alleging the company misclassified Shoppers to sidestep minimum wage, overtime, and sick and safe time obligations, and to avoid paying into unemployment insurance and workers’ compensation. Under Minnesota’s nine-factor economic-dependence test, the state argued, Shoppers were employees.3Minnesota Attorney General. Attorney General Ellison Sues Shipt The complaint also flagged that Shipt’s standard contract contained a class action waiver blocking workers from suing together over their classification.
On September 26, 2025, the state and Shipt announced a resolution. Shipt agreed to pay $800,000 to Minnesota and to change how it treats Shoppers in the state.4Minnesota Attorney General. Attorney General Ellison Reaches Settlement With Shipt The required changes include:
- When Shipt removes a Shopper from the platform, it must give a written explanation citing the specific contract provision violated and offer a formal appeal with a written response within three business days.
- Shipt must provide occupational accident insurance at no cost, covering up to $1 million in medical expenses per accident and up to $500 per week in disability payments.
- Shipt cannot keep any portion of a Shopper’s tips.
- Shipt must keep earnings records for three years and provide weekly pay records on request.
- Shipt cannot retaliate against workers who cooperate with the Attorney General or complain about working conditions.
One thing the Minnesota settlement did not do: it did not require Shipt to reclassify Shoppers as employees. The company continues to treat them as independent contractors, now with the added conditions above.5WorkCompCentral. Minnesota AG Settles With Shipt
D.C. Attorney General Lawsuit
The same month Minnesota filed, the District of Columbia Attorney General sued Shipt as well. District of Columbia v. Shipt, Inc. (Case No. 2022 CA 004909 B), filed in D.C. Superior Court, alleged the company’s misclassification violated the District’s minimum wage, overtime, and sick leave laws, that Shipt failed to contribute to D.C. public benefits programs, and that it repeatedly paid workers below the city’s minimum wage.6Law Street Media. DC AG Sues Gig Delivery Service Shipt for Employee Misclassification The suit sought back wages and sick leave, damages, penalties, and an order forcing Shipt to pay into District programs. No resolution has been reported.
Leeper v. Shipt at the California Supreme Court
A separate Shipt case is now teed up before the California Supreme Court, and its outcome could shape how future gig-worker suits proceed. In Leeper v. Shipt, Inc., the California Court of Appeal (Second District) issued a published opinion on December 30, 2024, addressing what lawyers call a “headless” PAGA action.7California Courts. Leeper v. Shipt, Inc., B339670
Because Shipt and other gig companies require workers to sign arbitration agreements, some plaintiffs have tried to avoid arbitration by dropping their individual PAGA claim and suing only in a representative capacity on behalf of other workers. The Leeper panel said that isn’t allowed: every PAGA action has to include both an individual and a representative claim. The individual piece can be sent to arbitration, and the representative piece has to wait until arbitration is done.8Sheppard Mullin. Will the California Supreme Court Put the Heads Back on Headless PAGA Suits
Another Court of Appeal panel reached the opposite conclusion in Rodriguez v. Packers Sanitation Services, creating a split. On April 16, 2025, the California Supreme Court took up Leeper (S289305) on its own motion and later granted review in Rodriguez. As of late 2025, the case was still in briefing, with trade associations filing amicus briefs urging the court to affirm Leeper.9NFIB. Leeper v. Shipt Amici Curiae Brief No oral argument date has been set. The eventual ruling will affect any California employer that uses arbitration agreements to limit PAGA exposure, Shipt included.
Why Shoppers Sued: The Pay Algorithm
The grievance underneath most of these cases is Shipt’s 2020 shift to an opaque pay model. Before that change, Shoppers earned a straightforward 7.5% commission on the order total plus $5 per delivery. Starting in early 2020, Shipt rolled out what it called an “effort-based” formula factoring in estimated drive time, item count, and store location. By September 30, 2020, the new model was in every market.10IEEE Spectrum. Shipt Workers and the Black Box Algorithm
Workers called it a black box. A study by Coworker.org and MIT Media Lab researcher Dan Calacci analyzed more than 6,500 pay data points from 213 Shoppers and found 41% earned less under the new model, with those workers losing an average of 11% per order. By early October 2020, 60% of tracked workers were earning less, overall payouts had fallen roughly 15% since rollout, and about a third of the sampled workers were earning below their state’s minimum wage.11Coworker.org. Data Shows Shipt’s Black Box Algorithm Reduces Pay of 40% of Workers
Shipt disputed the study, saying average base pay was consistent and that the sample was a small slice of its roughly 200,000 workers. Its chief communications officer called the protesting workers a “small, vocal minority.”12The Hill. Shipt Workers Organize Most Targeted Protest Yet Over New Pay Model The lawsuits that followed converted those pay complaints into legal claims: if Shoppers are employees, then unreimbursed mileage, sub-minimum earnings on some orders, and missing overtime are all violations. If they are contractors, none of it is. That is the question every Shipt case comes back to, and the one the courts are still working through.