The city of San Diego obtained a preliminary injunction Tuesday against grocery delivery company Instacart, in the wake of a judge's ruling that the company misclassified its employees as independent contractors.
San Diego County Superior Court Judge Timothy Taylor's ruling stems from a lawsuit brought by San Diego City Attorney Mara Elliott, who alleged Instacart was evading providing its "shoppers" with worker protections like minimum wage and overtime pay by classifying them as independent contractors rather than employees.
In the ruling, which was issued Feb. 18, but not formally served to the parties until this week, Taylor agreed with the City Attorney's Office's assertion that Instacart would not be able to show its workers should be classified as independent contractors.
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The judge cited a state Supreme Court ruling in the case of Dynamex Operations West Inc. v Superior Court, which outlines an "ABC" test for determining whether a worker is an employee, a classification that applies if the person performs a core function of the business, is not free from its control, or is not engaged in an independently established trade, occupation or business.
Taylor wrote that Instacart would likely be unable to satisfy any of the test's three conditions.
The judge also wrote that the city's litigation against Instacart was in line with other recent, related decisions, including the recent passage of AB 5, which gives greater labor protections to workers classified as employees.
"The policy of California is unapologetically pro-employee (in the several senses of that word). Dynamex is explicitly in line with this policy," Taylor wrote. "While there is room for debate on the wisdom of this policy, and while other states have chosen another course, it is noteworthy that all three branches of California have no spoken on this issue.
"The Supreme Court announced Dynamex two years ago. The decision gave rise to a long debate in the legal press and in the legislature. The legislature passed AB 5 last fall. The governor signed it. To put it in the vernacular, the handwriting is on the wall."
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Instacart plans to appeal the decision, which the company said would not affect its operations in San Diego, due to a temporary stay of enforcement during the appeals process.
"We disagree with the judge's decision to grant a preliminary injunction against Instacart in San Diego," Instacart said in an emailed statement. "We're in compliance with the law and will continue to defend ourselves in this litigation. We are appealing this decision in an effort to protect shoppers, customers and retail partners. The court has temporarily stayed the enforcement of the injunction and we will be taking steps to keep that stay in place during the appeals process so that Instacart's service will not be disrupted in San Diego."
Elliott's office touted the ruling as a victory for worker protections.
"This landmark ruling makes clear that Instacart employees have been misclassified as independent contractors, resulting in their being denied worker protections in which they are entitled by state law. We invite Instacart to work with us to craft a meaningful and fair solution" Elliott said.
"This decision is also a warning to other companies to do right by their employees. As the court said, `The handwriting is on the wall.' California has had two years since the Supreme Court's Dynamex decision to distinguish between a contactor and an employee. Everyone, not just Instacart, must live up to their legal responsibilities; they cannot ignore the significance of what occurred here."
