People v. Maplebear, Inc.
| Decision Date | 17 February 2021 |
| Docket Number | D077380 |
| Parties | THE PEOPLE OF THE STATE OF CALIFORNIA, Plaintiff and Respondent, v. MAPLEBEAR, INC., Defendant and Appellant. |
| Court | California Court of Appeals Court of Appeals |
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Super. Ct. No. 37-2019-00048731-CU-MC-CTL)
APPEAL from a judgment of the Superior Court of San Diego County, Timothy Taylor, Judge. Reversed and remanded.
Keker, Van Nest & Peters, Rachael E. Meny, Benjamin Berkowitz, Ryan K. Wong, Erin E. Meyer, Julia L. Allen, Donna Zamora-Stevens, Taylor Reeves and Melissa Cornell for Defendant and Appellant.
Littler Mendelson, Bruce J. Sarchet and Michael J. Lotito for Independent Women's Law Center as Amicus Curiae on behalf of Defendant and Appellant.
Jones Day, Craig E. Stewart and Eric Tung for Chamber of Commerce of the United States of America, California Grocers Association, Bay Area Council, San Francisco Chamber of Commerce, and Valley Industry and
Commerce Association as Amici Curiae on behalf of Defendant and Appellant.
Orrick, Herrington & Sutcliffe, Haley Jankowski, Julia C. Riechert and Jessica R. Perry for David R. Henderson and Other Academics and Economists as Amici Curiae for Defendant and Appellant.
Willenken, Amelia L. B. Sargent and Kenneth M. Trujillo-Jamison for California Asian Pacific Chamber of Commerce, California Hispanic Chambers of Commerce, California State National Action Network, Los Angeles Metropolitan Churches, Los Angeles Urban League, National Action Network Sacramento Chapter Inc., National Asian American Coalition, National Diversity Coalition, and National Newspaper Publishers Association as Amici Curiae on behalf of Defendant and Appellant.
Durie Tangri, Benjamin B. Au and Raghav R. Krishnapriyan for Independent Drivers Association of California, Tony Do, and Jim Pyatt as Amici Curiae on behalf of Defendant and Appellant.
Mara W. Elliott, City Attorney, Mark Ankcorn, Chief Deputy City Attorney, Kevin B. King, Deputy City Attorney for Plaintiff and Respondent.
Maplebear, Inc. dba Instacart (hereinafter "Instacart") appeals from a preliminary injunction enjoining and restraining Instacart from "failing to comply with California employment law with regard to its Full-Service Shopper employees within the City of San Diego." The superior court issued the injunction after finding the People of the State of California, acting by and through the San Diego City Attorney, (hereinafter "the City") demonstrated a probability of success on their claim Instacart was improperly classifying Full-Service Shoppers as independent contractors, andnot employees, based on the ABC test set forth in Dynamex Operations West, Inc. v. Super. Ct. (2018) 4 Cal.5th 903 (Dynamex).
Instacart asserts the superior court lacked authority to issue the preliminary injunction because it had previously filed a motion to compel arbitration and a request to stay the action pending resolution of the motion pursuant to Code of Civil Procedure section 1281.4. Alternatively, Instacart asserts the superior court erred by granting the preliminary injunction because the Full-Service Shoppers are motor carriers and a federal statute (49 U.S.C. § 13102(14), "the FAAAA") preempts application of the ABC test to motor carriers, the City did not prove a probability of success under the ABC test even if it is applicable, and the balance of harms did not weigh in favor of granting the preliminary injunction. Instacart also asserts the injunction is impermissibly vague.
In November, while this appeal was pending, the people of California voted to enact Proposition 22, "App-Based Drivers as Contractors and Labor Policies Initiative (2020)" (hereinafter "Proposition 22"). Instacart requests this court take judicial notice of Proposition 22 and asserts Proposition 22 is a significant change in law that directly permits the classification of the Full-Service shoppers as independent contractors. Accordingly, Instacart contends the injunction must be reversed and the matter remanded to the superior court for further proceedings in light of Proposition 22.
We are not persuaded the superior court lacked the authority to rule on the preliminary injunction motion, but agree the preliminary injunction as issued is impermissibly vague, particularly in light of the changes to the law effectuated by Proposition 22. We therefore reverse the order and remandthe matter to the superior court for further proceedings consistent with this opinion.1
In April 2019, the California Supreme Court adopted the standard commonly referred to as the "ABC test" for determining whether a worker is an employee or an independent contractor. (See Dynamex, supra, 4 Cal.5th at pp. 916-917.) "Under this test, a worker is properly considered an independent contractor to whom a wage order does not apply only if the hiring entity establishes: (A) that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact; (B) that the worker performs work that is outside the usual course of the hiring entity's business; and (C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity." (Ibid.)
Thereafter, in September 2019, the California Legislature enacted Assembly Bill No. 5, which clarified and codified the ABC test set forth in Dynamex and gave city attorneys meeting certain criteria the authority to seek injunctive relief to prevent the misclassification of employees as independent contractors based on the ABC test. (See Assem. Bill No. 5; Lab. Code, § 2750.3 ]; Lab. Code, § 2775 [replacing § 2750.3].) The Legislature acknowledged the legally-defined exceptions to the application of the ABC test and further indicated, if a court of law rules the ABC test cannot be applied to a particular context, the alternative test set forth in S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341 (Borello) shall govern.
Founded in 2012, Instacart partners with national, regional, and local retail grocers to provide same-day shopping, pickup, and delivery services to consumers across the United States and Canada through either the Instacart website or the Instacart smartphone application software program (the "Instacart App").
Instacart provides a consumer-facing virtual storefront for retailers. Individual retailers decide which items to offer and at what price, and the Instacart platform allows them to monitor their virtual storefronts and update inventory on a daily basis. Customers are able to browse a particular store's inventory via the Instacart website or the Instacart App and place orders for delivery during a specified timeframe.
Instacart hires shoppers to fulfill and deliver the customers' orders. Instacart employs In-Store Shoppers that gather groceries but do not deliverthem as part-time employees and Full-Service Shoppers that both gather and deliver groceries as independent contractors.2 There are approximately 2,000 active Full-Service Shoppers in San Diego.
Full-Service Shoppers are able to schedule shifts by picking from those available on the Instacart App. They can choose the days, times, and number of hours they wish to work. If a Full-Service Shopper works at least 90 hours in a three-week period or 25 hours over the previous three weekends, the shopper is granted early access privileges for scheduling shifts.
If a Full-Service Shopper chooses to schedule a shift, the shopper begins receiving batch (grocery order) notifications once the shift begins. When a notification is received, the Instacart App displays information about the batch, including the store location, the distance to the delivery location, the number of items in the order, and the compensation offered to the shopper for completing the batch. Each batch is offered for approximately four minutes. If the shopper does not accept the batch in the allotted time, a new batch will be offered. If a Full-Service Shopper fails to accept a batch, they receive a "reliability incident", and if they fail to accept four batches during a single shift, the shift is automatically terminated. A Full-Service Shopper has the option to decline a batch, without penalty, during the last half-hour of a scheduled shift.
Once a Full-Service Shopper accepts a batch, the Instacart App displays the list of items in the order and provides a suggested route through the grocery store to collect the items. The shopper must scan or manually input each item collected. The shopper uses an Instacart issued debit card to pay for the items and, once all items are collected and paid for, the Instacart App displays the delivery address for the order.
Instacart added an "On-Demand" option for Full-Service Shoppers in July 2019. This option allows Full-Service Shoppers to view a list of available batches at any time. If there are batches available, the shopper can simply select the batches they would like to accept, without scheduling a shift. In some areas of California, Instacart no longer offers shifts for Full-Service Shoppers and all deliveries are done through the On-Demand option. Approximately one-half of deliveries completed in January 2020 were done through the On-Demand option. Where shifts are still available, a Full-Service Shopper has the option of working shifts, working On-Demand, or...
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