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This post has been updated.
San Diego hit back at Instacart this week in the latest development in the city’s case against the grocery delivery service as it seeks to compel the company to classify its workers as employees, not independent contractors.
Though the city won a big victory by securing an injunction against the company in February, the court put a stay on that decision and has even extended the stay. In a new filing, the city urges an appellate court to undo the stay, and argues the company’s tens of thousands of employees as well as the general public will suffer irreparable harm during the coronavirus pandemic.
Instacart relies on gig workers to pick up supplies and deliver them to consumers. Last year, City Attorney Mara Elliott’s office alleged the company was misclassifying its drivers as independent contractors in violation of a state Supreme Court ruling. That ruling has since been codified into law, in the form of Assemblywoman Lorena Gonzalez’s AB 5, which has generated significant vitriol and debate.
In February, San Diego Superior Court Judge Timothy Taylor granted an injunction that barred the company from doing business locally — then stayed the injunction several days later while the company appealed the decision to a higher court. Taylor made clear at the time that the Court of Appeal needed to weigh in as soon as possible on this still-developing area of the law.
California voters may weigh in themselves in November through a ballot measure being funded by Uber, Lyft and DoorDash that seeks to exempt gig workers from the law. Those companies announced Friday they had begun turning in the required signatures to qualify for the ballot.
Elliott now finds herself in the thick of that statewide fight, which is shifting yet again because of COVID-19 and the pleadings by both local and state officials for residents to stay indoors.
On Thursday night, San Diego filed an emergency petition in hopes that the Court of Appeal would claw back Taylor’s stay given the changing reality and circumstances of the public health crisis.
In addition to arguing that the company was putting workers in harm’s way, she said the trial court didn’t have the authority to stay its own injunction. She also asked the Court of Appeal to extend the injunction across California “because Instacart’s unlawful and unfair conduct is widespread, statewide.”
At the center of Elliott initial complaint is this: She argues that Instacart’s independent contractors don’t meet the test laid out by the Supreme Court to determine if someone should be an employee. They aren’t free from the direction or control of the company while performing a core part of the company’s business, she claims. Instead of health insurance and overtime pay, she said, they get shirts and beanies.
“At a time when delivery services are needed more than ever, Instacart must earn the public’s trust by protecting its employees and the customers whose food they touch,” Elliott said in a statement. “Health and safety is everyone’s first priority, and Instacart needs to step up, act responsibly, and follow the law.”
Instacart, meanwhile, argues that its services are essential during the coronavirus crisis.
“This is an egregious attempt to change the court’s earlier decision to stay enforcement of the preliminary injunction in San Diego while we move through the appeals process,” spokeswoman Natalia Montalvo wrote in a statement. “Now, more than ever given the evolving COVID-19 crisis, Instacart is providing an essential service for millions of customers across the country who are relying on the company to deliver their groceries and household goods.”
In court documents, the company has responded that that it’s simply a “communications platform” and allows its workers flexibility over their schedules. Those workers also signed arbitration agreements when they agreed to their gigs, according to the company.
Earlier this week, Instacart founder and CEO Apoorva Mehta announced that the company would hire an additional 300,000 workers — or “shoppers” — over the next three months to meet the increasing customer demand for online grocery delivery and pickup in North America. The last few weeks have been the busiest in the company’s history, he wrote on Medium.
Any workers diagnosed with COVID-19 or placed in mandatory isolation or quarantine would get 14 days of extended pay, he said. Meanwhile, all in-store shoppers, or part-time employees, would get “access to sick pay, an accrued benefit that can be used as paid time off if you’re absent from work due to illness or injury.”
Update: This post was updated to include a statement from Instacart sent after the story initially published.