City Attorney Mara Elliott obtains landmark injunction against Instacart for violating AB 5 regulations

SAN DIEGO (KUSI) – In a landmark ruling assumed to be appealed, a judge ruled that ‘InstaCart’ is not complying with the new regulations of AB 5 requiring workers to be classified as employees instead of independent contractors.

The order will not take effect until Friday, which is the same day as a hearing related to arbitration, a related issue in the case.

In the preliminary injunction final ruling, San Diego Superior Court Judge Timothy Taylor wrote, “the ruling on the motion for preliminary injunction is not an adjudication of the ultimate rights in controversy. It simply represents the court’s discretionary decision whether defendant should be restrained from exercising a claimed right pending trial.”

NBC News reported, “the judge’s ruling practically invited Instacart to appeal.”

City Attorney Mara W. Elliott said, “this landmark ruling makes clear that Instacart employees have been misclassified as independent contractors, resulting in their being denied worker protections to which they are entitled by state law.”

KUSI reached out to City Attorney Mara Elliott for additional comments but were turned down.

City Attorney Mara Elliott’s complete press release regarding the ruling is below:

San Diego City Attorney Mara W. Elliott today obtained a preliminary injunction against Instacart, a multi-billion-dollar grocery-delivery company, for not complying with the worker classification standard established by the California Supreme Court’s 2018 decision in Dynamex Operations West, Inc. v. Superior Court.

Under Dynamex, an individual is legally an employee if he or she performs a core function of a business, is not free from the business’ control, or is not engaged in an independently established trade, occupation, or business.

Meeting any one of those three tests is enough to classify a worker as an employee. In granting a preliminary injunction against Instacart, the court said it was likely that the City would be able to prove at trial that all three apply to Instacart’s “shoppers,” whose job is to purchase and deliver groceries within an hour of a customer’s order. He also found that both the “shoppers” and the public would be irreparably harmed unless a preliminary injunction was issued.

Through its misclassification, Instacart avoids paying its “shoppers” a lawful wage and unlawfully defers substantial expenses to its “shoppers,” including the cost of equipment, car registration, insurance, gas, maintenance, parking fees, and cell phone data usage.

“This landmark ruling makes clear that Instacart employees have been misclassified as independent contractors, resulting in their being denied worker protections to which they are entitled by state law,” City Attorney Mara W. Elliott said. “We invite Instacart to work with us to craft a meaningful and fair solution.

“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 contractor and an employee. Everyone, not just Instacart, must live up to their legal responsibilities; they cannot ignore the significance of what occurred here.”

Chief Deputy City Attorney Mark Ankcorn, Deputy City Attorney Kevin B. King, and Deputy City Attorney Marni von Wilpert represent the People of the State of California.

Here is the full quote from Judge Timothy Taylor’s February 18, 2020, final ruling that was excerpted above:

“The policy of California is unapologetically pro-employee (in the several senses of that word). Dynamex is explicitly in line with this policy. 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 now 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.”

 

The Preliminary Injunction Final Ruling can be read here.

Categories: California News, Local San Diego News