Harris v. Vector Marketing Corp.
2010 U.S. Dist. LEXIS 122126
N.D. Cal.2010Background
- Vector Marketing Corporation uses Sales Representatives to market Cutco products and trainees undergo a non-paid initial training, raising FLSA minimum wage concerns.
- Ms. Harris seeks to certify a California FLSA collective action for training-time wages and a Rule 23 class for related state-law claims.
- The court previously granted conditional FLSA certification and allowed notices; thousands of opt-ins were processed, with several thousand completing forms.
- The parties conducted depositions of opt-ins and obtained declarations; Vector also conducted an independent survey of California sales reps.
- The court adopts the DOL/Portland Terminal framework to assess whether trainees are employees for FLSA purposes and analyzes whether claims can be decided on a collective basis.
- The court distinguishes training claims from post-training reimbursement claims under Rule 23 and Borello, ultimately certifying training-related claims for both FLSA and Rule 23 while denying post-training reimbursement certification.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are trainees employees under FLSA for training time? | Harris argues trainees are employees for training time under the DOL/Portland Terminal test. | Vector contends trainees are not employees and the Donovan test should apply before the Portland Terminal analysis. | Court adopts DOL/Portland Terminal; final FLSA certification granted. |
| Can the FLSA class be certified at the second stage as 'similarly situated'? | Harris asserts uniform training practices support final certification. | Vector argues variances in training and post-training activities defeat similarity. | Yes; the factors support final certification for the training-time claim. |
| Should Rule 23 class certification proceed for training-related state claims? | Harris seeks Rule 23(b)(3) class treatment for training-time claims (Cal. Lab. Code §§ 1197, 2802, PAGA, and §17200). | Vector challenges class treatment on manageability and predominance grounds. | Certify Rule 23 class for training-related claims; deny post-training Rule 23 certification. |
| Is the post-training reimbursement claim under Rule 23 viable? | Harris argues reimbursement claims fall within common issues and Borello considerations. | Vector notes varying expenses and damages calculations impede commonality and manageability. | Deny Rule 23 certification for post-training reimbursement claim. |
Key Cases Cited
- Reich v. Parker Fire Prot. Dist., 992 F.2d 1025 (10th Cir.1993) (economic realities framework for employee status in training context)
- Walling v. Portland Terminal Co., 330 U.S. 148 (U.S. Supreme Court, 1947) (six-factor test for trainee status under FLSA)
- Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir.1998) (predominance and cohesion in class actions)
- Local Joint Exec. Bd. of Culinary/Bartender Trust Fund v. Las Vegas Sands, Inc., 244 F.3d 1152 (9th Cir.2001) (adhesive factors for predominance and common issues in class actions)