The judge says Instacart is not complying with the new “gig economy” law that requires workers to be considered employees, not independent contractors.
A county judge in San Diego has ruled that Instacart misclassified the overwhelming majority of its California workforce.
While it will not have any immediate effect, the injunction represents a critical first step in enforcing the new state law known as “AB5.”
The statute, which took effect earlier this year, attempts to ensure that so-called “gig economy” and other workers are considered employees, rather than unilaterally being declared independent contractors. Under state law, employees are eligible for consideration benefits, including workers’ compensation, unemployment, unionization rights and more. Companies save millions annually by avoiding such financial costs.
“We disagree with the judge’s decision to grant a preliminary injunction against Instacart in San Diego,” the company said Monday night in a statement provided by Instacart spokeswoman Natalia Montalvo.
“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.”
The labor law case, People of California v. Maplebear — Instacart’s official corporate name — was initially brought by the San Diego city attorney in September.
Instacart “avoids paying its ‘shoppers’ a lawful wage,” San Diego City Attorney Mara W. Elliott said late Monday.