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Instacart is vowing to appeal a ruling from a state court judge in San Diego who found that California law requires the grocery delivery company to classify its "shoppers" as employees—and pay and provide them benefits accordingly.

San Diego Superior Court Judge Timothy Taylor granted San Diego's request for a preliminary injunction in a ruling dated Feb. 18, but issued to the parties Monday. The judge wrote that all three branches of California's government have weighed in on the state's "unapologetically pro-employee" policy.

"The Supreme Court announced Dynamex two years ago," wrote Taylor, citing the California Supreme Court decision adopting the so-called "ABC test" for when workers should be classified as employees eligible for overtime, expense reimbursement and other benefits. Taylor noted that the decision "gave rise to a long debate in the legal press and in the Legislature," which led to the passage of AB5 codifying the Dynamex ruling last fall and Gov. Gavin Newsom signing the bill into law. "To put it in the vernacular, the handwriting is on the wall," wrote Taylor of the level of fore-warning for companies in Instacart's position.

An Instacart spokesperson said that the company disagrees with the decision. "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 spokesperson said. "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 spokesperson added.

San Diego City Attorney Mara W. Elliott, in a statement, called the ruling "a warning to other companies to do right by their employees."

"As the court said, 'The handwriting is on the wall,'" she said. "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."

Taylor's ruling comes as companies have mixed success in challenging AB5 in court, with a state court judge in Los Angeles finding that AB5 was preempted by federal law when applied to motor carriers and their drivers and Uber and Postmates losing out on a bid to block enforcement of the law. The newly granted injunction was seen by lawyers on either side of the employment bar as a blow to gig economy companies.

Richard Meneghello of Fisher Phillips in Portland said that this was the latest example of seeing the ABC test in action and a demonstration of how potentially devastating it could be to the gig model.

"The big-picture takeaway here is that I think many cities might view this action as a blueprint for how they might go after other companies," Meneghello said. Meneghello said that he hopes that the judge's move to stay enforcement might allow potential legislative changes to AB5 or a potential ballot initiative being pondered by gig companies to move forward before large-scale reclassification of gig workers. "I think most people involved in this recognize this is such a fluid issue right now and that many people feel like AB5 got ahead of itself," Meneghello said.

But Shannon Liss-Riordan of Lichten & Liss-Riordan, who is handling multiple suits with claims under Dynamex and AB5 against gig companies, said that the ruling sends a message on an issue that, by now, should be clear.

She said AB5 "simply codified a court ruling that's two years old" and that companies have been "thumbing their noses" at the Dynamex decision.

"The legislature has spoken, the governor has spoken, and the court has spoken," she says. "They're just delaying right now in hopes that the landscape will change."