United States District Court, N.D. California
ORDER GRANTING MOTION FOR CONDITIONAL CERTIFICATION
OF COLLECTIVE ACTION AND DENYING MOTIONS TO SEAL RE: DKT.
NOS. 87, 88, 102
GONZALEZ ROGERS UNITED STATES DISTRICT COURT JUDGE
Leona Marino filed her wage and hour complaint seeking
minimum wage, overtime, meal and rest break penalties, late
payment penalties, and reimbursement of expenses. The action
arises from a dispute over whether plaintiff and a group of
similarly situated workers were misclassified as independent
contractors and not employees. Marino now seeks conditional
certification of a collective, opt-in action under the Fair
Labor Standards Act (“FLSA”), 29 U.S.C.
§§ 201 et seq. against defendants CACafe,
Inc. (“CACafe”), Jane Zheng, Ted Chao, Costco
Wholesale Corporation (“Costco”), and Club
Demonstration Services, Inc. (“CDS”), and
authorization to serve notice on potential opt-in plaintiffs.
(Dkt. No. 88)
carefully considered the papers submitted in support and in
opposition, the arguments of the parties, the pleadings in
this action, and the admissible evidence,  and for the
reasons set forth below, the Court Grants
the motion for conditional certification.
Summary of Facts
Marino was in-store demonstrator (“ISD”) who
performed demonstrations in Costco warehouse stores to
encourage sales of defendant CACafe's coconut-infused
coffees and teas. Marino alleges that CACafe manufactures,
distributes, and sells its products throughout California and
the United States, under the management of Jane Zheng and Ted
Chao. From late 2013 through late 2016, CACafe hired
approximately 113 ISDs to promote sales of its beverage
products at Costco's warehouses in California and several
other states. Marino contends that all ISDs were classified
as independent contractors and paid solely based on the
number of jars of CACafe product sold in Costco's stores
on days they performed product demonstrations at Costco.
ISDs' duties did not vary depending on the location or
time period, and did not require any special skills. ISDs
were required to: report before opening time to the store to
which they were assigned; purchase coffee and supplies and
set up a display in the area of the store assigned by a CDS
or Costco manager; take a picture of their demonstration area
and send it to CACafe; submit to daily, in-person inspections
by a CDS event manager using CDS's “Pre-Operational
Checklist”; make and provide samples of the coffee for
shoppers; clean up the area and take down the display only
after the store closed; submit to CDS a “Closing
Checklist” documenting that their area was clean and a
“Temperature Log” documenting that they had
checked samples for safe temperatures throughout the
submits evidence that the conditions of the in-store
demonstrations were dictated by the policies in Costco's
SOP, which in turn were enforced by CDS and CACafe. CDS was
delegated the responsibility by Costco to assure that ISDs
were maintaining a “uniform look” and were not
performing demonstrations in an “un-Costco way.”
(Meleshinsky Decl., Dkt. No. 88-2, Exh. F [CDS 30(b)(6) Depo.
of Brandi Vasquez (“Vasquez Depo.”)] at
13:20-14:12, 82:1-3, 58:22-59:1.) CDS Event Managers
conducted in-person, daily inspections of ISDs' behavior,
dress, and observance of safety rules at all Costco
warehouses pursuant to Costco's Standard Operating
Policy. (Vasquez Depo. at 26:7-10, 36: 1-37:1, 50:12-18;
Meleshinsky Decl., Exh. G [“Daily Compliance
Checklist”].) CACafe retained the right to
“fire” ISDs for failing to be “in complete
compliance with Costco and CDS guidelines and
policies.” (Meleshinsky Decl., Exh. H [email from
Defendant Zheng to Costco at COSTCO00002045-46].)
filed the initial complaint alleging causes of action
pursuant to the FLSA and California state wage law as both an
FLSA collective action and a Rule 23 class action. (Dkt No.
1.) On January 6, 2017, the parties stipulated to allow
Marino to file a First Amended Complaint (“FAC”),
adding Defendant Chao as well as claims under the California
Private Attorneys General Act (“PAGA”) Cal. Labor
Code section 2698. (Dkt. No. 15.) On March 16, 2017, based on
representations at the parties' case management
conference, the Court ordered defendants CACafe, Zheng, and
Chao to produce the list of persons who would be in the
alleged class. (Dkt. No. 44.) Additional putative class
members were later identified. (Dkt. No. 84.)
March 10, 2017, Marino filed a motion for corrective action,
bringing to the Court's attention improper contacts by
defendants CACafe, Zheng, and Chao (“CACafe
defendants”) with members of the alleged class. (Dkt.
No. 39.) Finding that the contact with the alleged class
members was inappropriate, and that releases had been
obtained from putative class members in a misleading manner,
the Court granted the motion and ordered that the releases
were invalid, that a corrective notice be sent, and that the
CACafe defendants be enjoined from communicating with
putative class members except as stated therein. (Dkt. No.
68.) The Court denied without prejudice plaintiff's
request for equitable tolling as of the date of the motion.
(Id.) A corrective notice was sent to the alleged
class members who had thus far been identified on May 5,
2017. (Dkt. No. 70.) The corrective notice did not contain a
court-approved opt-in notice and form (Dkt. No. 68, Exh. A
[Court-approved Curative Notice]). Marino further reports
that the corrective notice was not sent to all members of the
alleged class since 46 additional putative class members,
later identified, were omitted from the initial class list
provided by previous counsel for CACafe. (Compare
ECF No. 64-3 (April 21, 2017 Class List) with ECF
No. 84-3 (August 21, 2017 Amended).)
3, 2017, the CACafe defendants filed an Amended Answer. On
June 2, 2017, the parties stipulated to defendant CDS's
filing of an Amended Answer. The parties thereafter commenced
discovery, including document requests, depositions of
Marino, persons most knowledgeable for CACafe and CDS, and an
employee of Costco.
216(b) of the FLSA provides that one or more employees may
bring a suit for unpaid overtime wages on behalf of
themselves and other employees similarly situated. 29 U.S.C.
§ 216(b). Unlike class actions brought under Federal
Rule of Procedure 23, collective actions brought under the
FLSA require that individual members “opt in” by
filing a written consent. 29 U.S.C. § 216(b). Further,
unlike Rule 23 class actions, the statute of limitations
continues to run until a court conditionally certifies the
collective action and provides notice to those affected
“so that they can make informed decisions about whether
to participate.” Hoffmann-La Roche Inc. v.
Sperling, 493 U.S. 165, 170-71 (1989). Employees who do
not opt in are not bound by a judgment and may subsequently
bring their own action. Rivera v. Saul Chevrolet,
Inc., No. 16-CV-05966-LHK, 2017 WL 3267540, at *2 (N.D.
Cal. July 31, 2017).
standards for granting conditional certification of an FLSA
collective action “are considerably less stringent than
those for [certification of] Rule 23 classes.” Hill
v. R Carriers, Inc., 690 F.Supp.2d 1001, 1009 (N.D.
Cal. 2010). Conditional certification for purposes of
providing notice and an opportunity to opt in requires only a
minimal showing that the members of the proposed class are
“similarly situated.” Beauperthuy v. 24 Hour
Fitness USA, Inc., 772 F.Supp.2d 1111, 1117 (N.D. Cal.
2011); Hill, 690 F.Supp.2d at 1009; see also
Rivera, 2017 WL 3267540, at *2 (collecting
cases). The plaintiff must “show that there
is some factual basis beyond the mere averments in [her]
complaint for the class allegations.” Id. at
*6. While plaintiffs need not be identically situated, they
must be similar enough to warrant proceeding collectively.
Beauperthuy, 772 F.Supp.2d at 1118.
conditional certification stage, the court does not inquire
into the merit of the claims, weigh competing evidence, or
make factual findings. Lewis v. Wells Fargo &
Co., 669 F.Supp. 1124, 1128 (2009). To meet the standard
for conditional certification, a plaintiff is required only
to produce “some” evidence, not make a
substantial or detailed showing. Kress v.
PricewaterhouseCoopers, LLP, 263 F.R.D. 623, 630
(E.D.Cal.2009). “In determining whether plaintiffs have
met this standard, courts need not consider evidence provided
by defendants.” Id. at 630; see Sanchez v.
Sephora USA, Inc., No. 11-03396 SBA, 2012 WL 2945753, at
*4 (N.D. Cal. July 18, 2012) (“federal courts are in
agreement that evidence from the employer is not germane at
the first stage of the certification process, which is
focused simply on whether notice should be disseminated to
potential claimants” (citing cases)).
seeks conditional certification of a collective action as to:
All persons who work or worked for Defendants as In-store
Demonstrators and any other employees performing the same or
similar duties for Defendants, within the United States, at
any time from three years prior to the filing of this
Complaint to the final disposition of this case.
contends that all of the members of the proposed collective
action were misclassified as independent contractors for
purposes of their claims under the FLSA for unpaid minimum
wages and overtime.
definition of an “employee” for purposes of the
FLSA has been interpreted broadly to effectuate the remedial
purposes of the statute. Real v. Driscoll Strawberry
Assocs., Inc., 603 F.2d 748, 754-55 (9th Cir. 1979).
“[E]mployees are those who as a matter of economic
reality are dependent upon the business to which they
render service.” Id. (citing Goldberg v.
Whitaker House Cooperative, 366 U.S. 28, 33 (1961))
(emphasis in original). Courts consider a number of different
factors in determining whether workers are employees or
independent contractors under the FLSA, including:
• the degree to which the alleged employer has a right
to control the manner in which the ...