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Marino v. CAcafe, Inc.

United States District Court, N.D. California

November 9, 2017

Leona Marino, Plaintiff,
CACafe, Inc., ET AL., Defendants.



         Plaintiff 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)

         Having carefully considered the papers submitted in support and in opposition, the arguments of the parties, the pleadings in this action, and the admissible evidence, [1] and for the reasons set forth below, the Court Grants the motion for conditional certification.

         I. Background

         A. Summary of Facts

         Plaintiff 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 day.[2]

         Marino 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].)

         B. Procedural History

         Marino 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.)

         On 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).)

         On May 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.

         II. Applicable Standards

         Section 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).

         The 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).[3] 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.

         At the 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)).

         III. Discussion

         Marino 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.

         Plaintiff 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.

         The 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 ...

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