There are two schools of thought on this one.
The rules-lawyer version: the disc of force provided by Shield is still hovering between the grapplers, and intercepting attacks, even during an on-going grapple. It just moves around the parts where the grapplers are joined. There is nothing in the spell's description that indicates there is room for another combatant behind the Shield, and nothing about grappling negating the spell's benefit.
The real-world-physics version: the disc of force provided by Shield is hovering in front of the caster (per the spell description), not against the caster. If you're grappling, your bodies are pretty much joined, and there is no room for the Shield between the grapplers. It's just "common sense".
So, if you like to stick to the rules, Shield works during grappling. If you like to moderate the rules with your vision of how things ought to work, Shield might not work during a grapple.
Like many issues in this forum: DM's call.
-AK