San Diego judge tentatively grants injunction against Instacart

Wryly acknowledging "change is hard," a San Diego judge rejected a same-day grocery delivery company's claim it will be "irreparably harmed" if forced to suddenly treat its workers as employees, according to a tentative ruling filed Friday.

Superior Court Judge Timothy Taylor tentatively granted a preliminary injunction requested by San Diego City Attorney Mara W. Elliott, whose office filed the complaint against Instacart days before Gov. Gavin Newsom signed Assembly Bill 5 in September. The complaint alleged the company, legally registered as Maplebear Inc., is unlawfully classifying some of its employees as independent contractors in order to pay them lower wages and make them responsible for overhead costs, such as equipment, car registration, insurance, gas, parking fees and cell phone data. California v. Maplebear Inc. 2019-48731 (S.D. Super. Ct., filed Sept. 13, 2019).

Under AB 5, which took effect Jan. 1, most workers are automatically classified as employees unless they pass a three-pronged "ABC" test. Deputy City Attorney Kevin King moved for a preliminary injunction last week.

Instacart, represented by Keker Van Nest & Peters, told the court a preliminary injunction would cause the company irreparable harm since it would force the company to hire tens of thousands of new employees; develop rules, protocols, and management teams to monitor the new employees' work; and pay for infrastructure to help enforce the new rules, among other things.

But the judge dismissed these concerns, noting the company has already taken some steps toward complying with the state Supreme Court ruling in Dynamex Operations West, Inc. v. Superior Court, 4 Cal. 5th 903 (2018).

"Defendant cannot legitimately claim surprise or that it has not had time to adjust its business model," Taylor wrote in his tentative ruling Friday. "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," Taylor added, "the handwriting is on the wall." A hearing on the motion took place Friday but did not conclude before press time, according to the city attorney's office. Attorneys from Keker Van Nest & Peters declined to provide comment.

Since AB 5 took effect Jan. 1, U.S. District Judge Roger T. Benitez, based in San Diego, has granted a preliminary injunction on the bill for motor carriers.