Introduction

COVID-19 affected everything from how we buy groceries to how we try cases. Across the country, moratoriums and ordinances were put into effect to curb the spread of the disease and assist both the suddenly unemployed and the necessarily employed. Among the necessary were those who delivered goods ordered to the masses who stayed inside as ordered by Washington, County, and City governments.

Background

In March 2020, a “Stay Home – Stay Healthy” proclamation came into effect, closing all nonessential workplaces and banning large gatherings to reduce the spread of the virus. Like many other states, Washington residents began to rely heavily on delivery services to acquire food and other goods.

As a result of the Stay Home proclamation, the demand for delivery drivers skyrocketed. Delivery drivers were suddenly making more deliveries in a struggle to keep up with demand.

Food delivery companies typically hire drivers as independent contractors, thereby avoiding many workplace protections afforded to employees. Seattle recognized these types of workers may be suffering as a result, and decided to act.

In May 2020, Seattle instituted Ordinance 126093, “Premium Pay for Gig Workers,”[i] recognizing the workers had an increased risk of catching or spreading covid. The ordinance provided the following premium pay: $2.50 for the first pickup or drop-off point in Seattle and $1.25 for each additional pickup or drop-off point in Seattle. The Ordinance also prohibited employers from doing the following:

1. Reducing or otherwise modifying the areas of the City served by the food delivery network company;
2. Reducing a gig worker’s compensation;
3. Limiting a gig worker’s earning capacity, including but not limited to restricting access to online orders; and,
4. Adding customer charges to online orders for delivery of groceries.

Litigation

Instacart filed suit[ii] against Seattle asserting seven causes of action:

1. The ordinance violated 82.84 RCW, stating local governments “may not impose or collect any tax, fee,

or other assessment on groceries.”[iii]

2. The ordinance exceeded the City’s police powers.[iv]
3. The ordinance took private property for public use without just compensation, in violation of the takings clause of the Washington and United States Constitutions.[v]
4. The ordinance impaired existing contractual obligations in violation of the contracts clauses of the Washington and United States Constitutions.[vi]
5. The ordinance violated the equal protection clause of the United States Constitution. [vii]
6. The ordinance violated the privileges and immunities clause of the Washington Constitution.[viii]
7. The City, under the color of law, violated Company’s rights protected by the U.S. Constitution and federal law, and Company should be entitled to recover damages and attorney fees.[ix]

The trial court dismissed only the first cause of action. Seattle sought discretionary review from the Supreme Court of Washington, which found on the respective causes as follows:

1. The court affirmed dismissal, as it did not find the ordinance imposed a tax on groceries.
2. The court ordered dismissal of the equal protection claim, finding there was a rational basis to treat this class of workers differently.
3. The court ordered dismissal of the privileges and immunities claim, finding Company had not met its burden to show that a fundamental right of state citizenship is implicated.
4. The takings clause claim was affirmed and not dismissed. The court found Company may be able to prove the ordinance interferes with its economic interests to a degree that amounts to a taking.
5. The contracts clause claim was affirmed and not dismissed. The court found Company may be able to prove factual impairment of contracts with its drivers after factual assessment.
6. Because the equal protection, takings clause, and contracts clause claims were not dismissed, the damages claim was affirmed and not dismissed.
7. The police powers claim was affirmed and not dismissed, as the court believed further factual development was required.[x]

Analysis

We will focus on the Washington code-based law in this article, which is cause of action one.

Grocery Tax

Washington law prohibits any local “…tax, fee, or other assessment on groceries” by local governments.[xi] The law recognizes food is a basic human need and aims to keep grocery prices as low as possible to improve access for Washingtonians.[xii] Here, Instacart argued the ordinance was a tax, fee, or assessment proscribed by law. The court looked at the statute language as a whole to determine the plain meaning of the text, which, in pertinent part, reads as follows:

…includes, but is not limited to, a sales tax, gross receipts tax, business and occupation tax, business license tax, excise tax, privilege tax, or any other similar levy, charge, or exaction of any kind on groceries or the manufacture, distribution, sale, possession, ownership, transfer, transportation, container, use, or consumption thereof.

The court found the statue unambiguous. “[T]he average informed lay voter would read the statute to prohibit charges that are, or resemble, taxes on groceries.”[xiii] As in previous holdings, the court utilized the common meaning of “tax” as a noun. “[A] ‘pecuniary charge imposed by legislative or other public authority upon persons or property for public purposes: a forced contribution of wealth to meet the public needs of a government.”[xiv]

Here, the court found Seattle’s premium pay was not a tax. The premium pay was owed to the workers, not the public treasury. No money was raised for support of the government.[xv] Instacart further argued the word tax should be given a broader meaning, because “the statute includes the phrase ‘or any other similar levy, charge, or exaction of any kind.’” The court disagreed, again reasoning the statute should be read as a whole, and not parsed out as if various pieces of it appeared in a vacuum.[xvi]

Conclusion

COVID-19 changed almost every aspect of our lives. It revealed many positions could be performed remotely. Even today, some courts mandate Zoom hearing and trial appearances. As with this case, litigation over covid precautions, ordinances, and mandates continues to grow and evolve. The nature of this crisis and the repercussion therefrom are constantly changing. Some of the questions stemming from covid litigation are readily answered, while others remain a decision for a trier of fact. It is crucial employers continue to monitor this evolving area of law as many precautions and requirements initially put in place in the early days of the pandemic remain in effect today.

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Sources

[i] Seattle Ordinance 126094.

[ii] Washington Food Industry Association & Maplebear, Inc. v. City of Seattle, 524 P.3d 181 (2023).

[iii] RCW 82.84.040(1).

[iv] See WASH. CONST. art XI, § 11.

[v] See U.S. CONST. amend. V; WASH. CONST. art. I, § 16.

[vi] See U.S. CONST. art. I, § 10, cl. 1; WASH. CONST. art. I, § 23.

[vii] See U.S. CONST. amend. XIV, § 1.

[viii] See WASH. CONST. art. I, § 12.

[ix] 42 U.S.C. § 1983.

[x] Wash. Food Indus. Ass’n, et al.

[xi] Wash. Food Indus. Ass’n, et al.

[xii] RCW 82.84.

[xiii] Wash. Food Indus. Ass’n, et al.

[xiv] Id. (emphasis in original, citations omitted).

[xv] Id.

[xvi] Id.