Nelson v. Avon Products, Inc.

Filing 70

Order by Hon. Beth Labson Freeman granting 56 Motion to Certify Class. A Class Action is Certified. (blflc3S, COURT STAFF) (Filed on 4/17/2015)

1
2
3

UNITED STATES DISTRICT COURT

4

NORTHERN DISTRICT OF CALIFORNIA

5

SAN JOSE DIVISION

6
JACQUELINE CAVALIER NELSON, et
al.,

7

Plaintiff,

8

ORDER GRANTING PLAINTFFS'
MOTION FOR CLASS
CERTIFICATION

v.

9
10

AVON PRODUCTS, INC., et al.,

[Re: ECF 56]

Defendants.

11
United States District Court
Northern District of California

Case No. 13-cv-02276-BLF

12
13

This purported class action involves a dispute over alleged employment misclassification.

14

The named Plaintiffs are former District Sales Managers of Defendant Avon Products, Inc. The

15

Plaintiffs allege that Avon improperly misclassified DSMs as exempt from overtime wages.

16

Plaintiffs move the Court to certify a class of “all persons employed by Defendant in California as

17

District Sales Managers from April 8, 2009 to the present,” as well as to appoint Plaintiffs’

18

counsel, Blumenthal, Nordrehaug & Bhowmik, as class counsel, and to designate the named

19

Plaintiffs as class representatives. For the reasons below, the Court GRANTS Plaintiffs’ motion.

20

I.

BACKGROUND

21

A.

22

The nineteen named Plaintiffs were employed as District Sales Managers (“DSMs”) by

The Job Duties and Major Responsibilities of Avon DSMs

23

Avon in California between April 8, 2009 and the present. DSMs were classified by Avon as

24

exempt from overtime wages during this time period. Martin Depo., Bhowmik Decl., ECF 56-2 at

25

103:18-23. DSMs are responsible for recruiting Representatives to sell Avon products. See, e.g.,

26

id. at 134:11-137:19.1 Several named Plaintiffs in this case testify that this recruiting, called

27
1

28

Avon sells consumer goods, including skin care products and household items. Its business
model relies on nearly six million “Avon Representatives” who are responsible for selling these

1

“prospecting” in Avon corporate parlance, was a DSM’s primary job responsibility. See Bandini

2

Depo., Bhowmik Decl., ECF 56-2 Exh. 10 at 107:20-110:12 (describing meeting with and

3

recruiting prospective Representatives to be her “primary task” as a DSM); Colon Decl., Bhowmik

4

Decl., ECF 56-9 at ¶ 4 (“My main responsibility as a District Sales Manager for Avon was to

5

recruit independent contractor Sales Representatives in and around my assigned district.”); Bilitch

6

Depo., Bhowmik Decl. ECF 56-2 Exh. 6 at 116:4-14 (testifying that she was instructed to “go out

7

and prospect with my reps, get my reps involved, teach them how to prospect and spend my time

8

prospecting”); Flores Decl., ECF 56-10 at ¶ 4 (“Defendant’s company policy required me and

9

other District Sales Managers to spend at least eight (8) hours each day in the ‘field’ recruiting
independent contractor Sales Representatives.”). DSMs would also train their Representatives to

11
United States District Court
Northern District of California

10

do their own prospecting, in addition to providing some training in general sales skills. See, e.g.,

12

Campbell. Depo., Bhowmik Decl., ECF 56-2 Exh. 13 at 93:23-94:24 (“What I did for training was

13

I would teach [the Representatives] how to sell, but that was very, very minimal because most of

14

what Avon wanted us to do was to recruit them and teach them how to recruit.”). DSMs do not

15

themselves sell Avon products. See, e.g., Martin Depo. at 38:21-23.

16

Avon provides its DSMs with materials to assist in prospecting and training

17

Representatives, including promotional materials, product samples, recruiting tents, and other

18

props. See Martin Depo. at 121:1-122:3. DSMs testify that they would set up these tents, which

19

could be quite heavy, around their assigned districts when attempting to recruit new

20

Representatives. See, e.g., Branson Decl. ¶ 9 (“I had to set up the recruiting tent multiple times

21

during my employment in the parking lots of local businesses . . . in order to recruit Sales

22

Representatives. The tent was so big I had to ask random strangers to help me set it up.”).

23

DSMs also testify that they are subject to substantial supervision. Division Managers, to

24

whom DSMs report, can access a DSM’s work calendar and schedules. See Cabrera Depo. at 32:1-

25

33:24 (testifying that she was able to review her DSM’s work schedules and calendars); Gaskell

26

Depo., Bhowmik Decl., ECF 56-2 Exh. 8 at 13:20-14:1 (testifying that she could review DSM

27
28

and other Avon products directly to consumers. These Representatives are independent
contractors. See Martin Depo. at 10:11-25, 38:24-39:2.
2

1

work calendars). An Avon employee further testified in the company’s 30(b)(6) deposition that

2

Division Managers supervised DSMs in a manner such that they were able to know “where,

3

geographically, [a DSM] might be in the district.” Martin Depo. at 62:2-12. District managers also

4

ride along with their DSMs while the DSMs are prospecting in order to directly supervise their

5

work. See Gordon Depo., Bhowmik Decl., ECF 56-2 Exh. 9 at 54:24-55:2. DSMs are also

6

monitored by their Division Managers with regard to Avon’s Key Performance Indicators

7

(“KPIs”), which includes, among other data, the number of Representatives a DSM recruits and

8

the sales those Representatives makes. See Martin Depo. at 30:9-23, 37:15-24; see also Gaskell

9

Depo. at 21:8-22:5. At least one Division Manager testified that she reviewed her DSMs’ KPI

10

United States District Court
Northern District of California

11

reports on a daily basis. See Cabrera Depo. at 35:20-37:22, 40:15-23.
Finally, the named Plaintiffs contend that DSMs are far removed from the general business

12

operations of Avon’s business, because they exercise no control over Avon’s operating or

13

managerial policies since their main job was to recruit “anyone with a pulse” as a Representative.

14

See, e.g., Bishop Decl., ECF 56-7 at ¶¶ 3-4 (“I could not hire, fire, discipline, or promote any

15

Avon employees . . . Avon would allow me to accept anyone with a pulse.”); Branson Decl. ¶ 3 (“I

16

possessed zero authority to make any employment-related, personnel decisions.”).

17

Avon’s own documents support the named Plaintiffs’ testimony that the main role of

18

DSMs is to recruit new Representatives. Avon’s “DSM Roles & Responsibilities” document

19

outlines that DSMs have six primary areas of responsibility, the first two being “training and

20

developing 1st generation representatives/top sellers (through coaching and mentoring)” and

21

“appointing, training, and developing new sales leaders.” See “Direct Sales Manager Role &

22

Responsibilities,” Bhowmik Decl., ECF 56-2 Exh. 4 at 1, 3. Avon again describes the importance

23

of prospecting new Representatives in a training presentation entitled “US Sales Training &

24

Development,” ECF 56-2 Exh. 3 at 8, which says that “Direct Sales Managers are the key to

25

achieving direct selling excellence through outstanding recruiting, motivating, and training of

26

Avon Representatives.” This document further states that “Direct Sales Manager and

27

Representative’s (sic) roles are clearly defined,” id. at 9, and identifies four tasks in which DSMs

28

are expected to engage: (1) planning, (2) recruiting Representatives, (3) training and developing
3

1

Representatives, and (4) measuring performance and reporting results. See id. at 12. Avon

2

identifies the “fundamental expectations” of DSMs with regard to these four tasks to include

3

“prospect[ing], recruit[ing], and appoint[ing] Representatives,” “maintain[ing] high levels of

4

Representative coverage,” “enthusiastically promot[ing] and manag[ing] the New Representative

5

Development Process,” and “improv[ing] Representative retention.” Id. at 14-18.
After this lawsuit was filed, Avon commissioned a study by Dr. Christina Banks which

6
7

was designed to “determine what tasks and activities DSMs actually perform on the job.” See

8

Banks Decl., ECF 61 at ¶ 3.2 The study observed thirty DSMs over the course of a day, and Dr.

9

Banks identified 153 discreet tasks that DSMs perform, grouped into nineteen “Task Areas”:

10

1. Planning Recruiting Activities
2. Promoting Avon and Recruiting Representatives
3. Growing the Representative Base Through Others
4. Educating Representatives on Building their Sales and Recruiting Skills
5. Demonstrating Sales and Recruiting Activities to Representatives
6. Coaching and Mentoring Representatives in Marketing and Sales
7. Coaching and Mentoring Representatives in Recruiting
8. Facilitating Representatives’ Orders and Customer Service
9. Developing and Implementing Strategies for Growing Revenue
10. Reviewing and Analyzing District Performance
11. Business Planning and Scheduling
12. Updating Product Knowledge and Sales Skills
13. Managing District Budget
14. On-boarding New Representatives
15. Selling Products and Performing Sales Support Activities
16. Maintaining and Securing Facilities and Equipment
17. Performing Clerical Activities
18. Managerial Drive Time
19. Non-Managerial Drive Time

United States District Court
Northern District of California

11
12
13
14
15
16
17
18
19
20
21
22
23
24

Banks Decl. at p. 17, Table 4.
Dr. Banks noted in short that “DSMs serve as the interface between the company and the

25
26
27
28

2

Plaintiffs object to, and move to strike, the Banks Declaration on two grounds: (1) that Dr. Banks
was not disclosed to Plaintiffs and (2) that her Declaration contains improper legal conclusions.
See Reply, ECF 67 at 15. For the reasons stated on the record at the February 19, 2015 hearing, the
objection is overruled and the motion to strike is denied. The Court will disregard any improper
legal conclusions contained within the Banks Declaration.
4

1

independent sales representatives, the people who sell Avon’s products directly to consumers.” Id.

2

at ¶ 5. Though the study found that all DSMs engaged in these nineteen Task Areas, it found

3

variations among the DSMs regarding the amount of time each spent undertaking certain tasks.

4

For example, the least amount of time spent by an observed DSM engaging in “updating product

5

knowledge and sales skills,” Task Area 11, was no time at all, while the most time spent by an

6

observed DSM undertaking tasks in this Task Area was 5 hours and 37 minutes. See id. at ¶ 34.

7

At oral argument on the motion, Plaintiffs’ counsel did not disagree with the Task Areas

8

identified by the Banks Study’s Task Areas as comprising the activities in which DSMs engaged:

9

11
United States District Court
Northern District of California

10

The Court: In your reply brief you seemed to be willing, at least for
purposes of this motion, to accept the 19 tasks identified by Ms.
Banks. Did I read that correctly?
Mr. Bhowmik: Absolutely.

12

The Court: Okay. But I presume at trial you would have your own
list of tasks and you are not adopting those for all purposes.

13

Mr. Bhowmik: I would have to look at them a little more closely. I
think the point is I agree that’s what the people do.

14
15

February 19 Hearing Transcript at 28:21-29:5 (emphasis added).

16

B.

The Legal Claims

17

Plaintiffs contend that they have been denied overtime pay in violation of California Labor

18

Code §§ 510, 1194, and 1198. California law provides that the Industrial Welfare Commission

19

(“IWC”) may establish exemptions from the requirement that employees be paid overtime

20

compensation. See Cal. Labor Code § 515. The IWC has promulgated, through California Wage

21

Order 4-2001 (hereinafter “Wage Order 4”), three exceptions to the general rule that employees

22

must be compensated for overtime, for “executive,” “administrative,” and “professional”

23

employees. See Wage Order 4 §§ 1(A)(1)—(3). In this case, Avon contends that DSMs fall within

24

the administrative exemption of Wage Order 4, and are thus not entitled to overtime.

25
26
27
28

Wage Order 4 outlines a five-part test to determine whether an employee falls within the
administrative exemption:
The employee must (1) perform “office or non-manual work directly
related to management policies or general business operations” of
the employer or its customers, (2) “customarily and regularly
5

3

exercise[] discretion and independent judgment,” (3) “perform[]
under only general supervision work along specialized or technical
lines requiring special training” or “execute [] under only general
supervision special assignments and tasks,” (4) be engaged in the
activities meeting the test for the exemption at least 50 percent of
the time, and (5) earn twice the state's minimum wage.

4

See, e.g., Eicher v. Adv. Bus. Integrators, Inc., 151 Cal. App. 4th 1363, 1371 (2007) (citing Wage

5

Order 4 § 1(A)(2)).

1
2

6

Critically, Avon bears the burden of proof with regard to whether the DSMs are properly

7

classified as exempt from the provisions of Wage Order 4. See, e.g., Ramirez v. Yosemite Water

8

Co., Inc., 20 Cal. 4th 785, 794-95 (1999) (“[T]he assertion of an exemption from the overtime

9

laws is considered to be an affirmative defense, and therefore the employer bears the burden of
proving the employee’s exemption.”) (citing Nordquist v. McGraw-Hill Broad. Co., 32 Cal. App.

11
United States District Court
Northern District of California

10

4th 555, 562 (1995)). Further, Wage Order 4’s requirements are stated in the conjunctive: if only

12

one of the requirements for the administrative exemption is lacking, the administrative exemption

13

is inapplicable to the employee. See Eicher at 1372 (2007) (“Stated in the conjunctive, each of the

14

five elements must be satisfied to find the employee exempt as an administrative employee.”).

15

The parties dispute whether the Court can determine if DSMs were properly classified as

16

exempt on a class-wide basis. Because Defendant bears the burden of proof with regard to the

17

administrative exemption, Plaintiffs proffer four questions of law or fact that they contend can be

18

adjudicated on a classwide basis, each of which they contend would render all DSMs misclassified

19

under the law: (1) whether DSMs’ duties and responsibilities involve the performance of non-

20

manual work; (2) whether DSMs’ duties and responsibilities involve work directly related to

21

management policies or general business operations; (3) whether DSMs customarily and regularly

22

exercise discretion and independent judgement; and (4) whether DSMs work under only general

23

supervision.

24

Plaintiffs contend that these four questions predominate over any individual inquiries,

25

because if they prevail as to any of these four questions they would show that the administrative

26

exemption is inapplicable to Avon’s California DSMs. Defendant argues in response that while

27

DSMs might have the same job description, the manner in which they actually perform their jobs

28

varies too widely for the Court to be able to determine whether DSMs as a class were exempt, and
6

1
2

that such questions must instead be adjudicated individually.
II.

LEGAL STANDARD

3

Recognizing that “[t]he class action is an exception to the usual rule that litigation is

4

conducted by and on behalf of the individual named parties only,” Federal Rule of Civil Procedure

5

23 demands that two requirements be met before a court certifies a class. Comcast Corp. v.

6

Behrend, 133 S. Ct. 1426, 1432 (2013).

7

A party must first meet the requirements of Rule 23(a), which demands that the party

8

“prove that there are in fact sufficiently numerous parties, common questions of law or fact,

9

typicality of claims or defenses, and adequacy of representation.” Behrend at 1432. If a party
meets Rule 23(a)’s requirements, the proposed class must also satisfy at least one of the

11
United States District Court
Northern District of California

10

requirements of Rule 23(b). Here, Plaintiffs invoke Rule 23(b)(3), which demands that “the

12

questions of law or fact common to class members predominate over any questions affecting only

13

individual members, and that a class action is superior to other available methods for fairly and

14

efficiently adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3). The predominance inquiry

15

inherent in a Rule 23(b)(3) analysis asks “whether proposed classes are sufficiently cohesive to

16

warrant adjudication by representation,” focusing on “the relationship between common and

17

individual issues.” In re Wells Fargo Home Mortg. Overtime Pay Litig., 571 F.3d 953, 957 (9th

18

Cir. 2009) (further noting that the express purpose of Rule 23(b)(3) was to “achieve economies of

19

time, effort, and expense and promote [] uniformity of decision as to persons similarly situated”).

20

Rule 23 outlines four pertinent factors to the Court’s analysis in determining the appropriateness

21

of a (b)(3) class: the class members’ interest in individually controlling the action; the extent and

22

nature of already-existing litigation regarding the action; the desirability (or lack thereof) of

23

concentrating the litigation of the claims in a single forum; and manageability of the action. See

24

Fed. R. Civ. P. 23(b)(3); see also Hanlon v. Chrysler Corp., 150 F.3d 1011, 1022 (9th Cir. 1998).

25

The party seeking class certification bears the burden of showing affirmative compliance

26

with Rule 23. See, e.g., Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551 (2011). A court’s

27

analysis of class certification “may entail some overlap with the merits of the plaintiff’s

28

underlying claim[s],” Amgen Inc. v. Conn. Ret. Plans & Trust Funds, 133 S. Ct. 1184, 1194
7

1

(2013), though the merits can be considered only to the extent they are “relevant to determining

2

whether the Rule 23 prerequisites to class certification are satisfied.” Id. at 1195. Within Rule 23’s

3

framework, the district court maintains broad discretion over whether to certify a class or subclass.

4

See, e.g., Zinser v. Accufix Research Institute, Inc., 253 F.3d 1180, 1186 (9th Cir. 2001).

5
6

III.

DISCUSSION
Plaintiffs seek to certify a class of “all persons employed by Defendant in California as

7

District Sales Managers from April 8, 2009 to the present.” See Mot. at 1. Class certification

8

requires the Court to engage in a two-step analysis. First, it must determine whether the four

9

requirements of Rule 23(a) have been established: (1) numerosity, (2) common questions of law or
fact, (3) typicality, and (4) adequate representation.” See, e.g., Ellis v. Costco Wholesale Corp.,

11
United States District Court
Northern District of California

10

657 F.3d 970, 974 (9th Cir. 2011). Second, Plaintiffs must satisfy at least one of Rule 23(b)’s

12

provisions. See Stearns v. Ticketmaster Corp., 655 F.3d 1013, 1019 (9th Cir. 2011). When a party

13

invokes Rule 23(b)(3), as Plaintiffs do here, the Court is tasked with deciding whether “the actual

14

interests of the parties can be served best by settling their differences in a single action.” Hanlon at

15

1022. “In contrast to Rule 23(a)(2), Rule 23(b)(3) focuses on the relationship between common

16

and individual issues. When common questions present a significant aspect of the case and they

17

can be resolved for all members of the class in a single adjudication,” a court may certify a class

18

pursuant to Rule 23(b)(3). See id.

19

The Court turns first to the four requirements of Rule 23(a). Defendant argues that

20

Plaintiffs cannot meet the Rule’s commonality or typicality requirements. For the reasons

21

discussed below, the Court disagrees.

22
23
24

A.

Rule 23(a)
1.

Numerosity

Under Rule 23(a)(1), a class must be “so numerous that joinder of all members is

25

impracticable.” Courts have repeatedly held that classes comprised of “more than forty” members

26

presumptively satisfy the numerosity requirement. See, e.g., DuFour v. BE LLC, 291 F.R.D. 413,

27

417 (N.D. Cal. 2013).

28

Defendant does not dispute that the class is sufficiently numerous, and stated in its Notice
8

1

of Removal that it employed 187 employees as DSMs in California between April 8, 2009 and

2

May 17, 2013. See Notice of Removal, ECF 1 at ¶ 31. The Court finds that the proposed class

3

satisfies Rule 23(a)(1).

4
5

2.

Commonality

Rule 23(a)(2) demands that “there are questions of law or fact common to the class.” The
Supreme Court has stated that the mere raising of common questions by plaintiffs is insufficient

7

for purposes of class certification, and instead that the “common contention [] must be of such a

8

nature that it is capable of classwide resolution.” Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541,

9

2551 (2011) (citing Richard A. Nagareda, Class Certification in the Age of Aggregate Proof, 84

10

N.Y.U. L. Rev. 97, 131-32 (2009) (“What matters to class certification . . . is not the raising of

11
United States District Court
Northern District of California

6

common ‘questions’ – even in droves – but, rather, the capacity of a classwide proceeding to

12

generate common answers apt to drive the resolution of the litigation.”) (emphasis in original)).

13

Plaintiffs proffer four possible common questions that they contend are capable of

14

classwide resolution: (1) whether DSMs’ duties and responsibilities involve the performance of

15

non-manual work; (2) whether DSMs’ duties and responsibilities involve work directly related to

16

management policies or general business operations; (3) whether DSMs customarily and regularly

17

exercise discretion and independent judgement; and (4) whether DSMs work under only general

18

supervision. In response, Defendant conflates these common inquiries into a single common

19

question – “that Defendant’s polic[ies] improperly treat[] all employees alike for exemption

20

purposes” – and argues that this is the type of “literal common question[] that the Supreme Court

21

[has] rejected as being insufficient” to show commonality under Rule 23(b)(2). See Opp. at 15

22

(citing Dukes, 131 S. Ct. at 2550-51). Defendant argues that Plaintiffs cannot simply rely on a

23

uniform classification policy in order to show commonality. See id. Instead, Defendant contends,

24

individualized inquiries are necessary for the Court to determine how each DSM spends his or her

25

time. The Court considers each of Plaintiffs’ proposed common questions in order to determine

26

whether they are capable of generating the “common answers” necessary to find commonality.

27

The first common question identified by Plaintiffs, whether DSMs’ duties and

28

responsibilities involve the performance of non-manual work, is by far the least susceptible to
9

generating a classwide resolution. Defendant points to wide discrepancies in the testimony of

2

named class member DSMs in terms of how much manual labor they perform. See, e.g., Nielson

3

Depo., ECF 60-5 at 105:5-107:4 (describing spending twenty hours per week on manual labor

4

tasks, including loading and unloading boxes from her car); Espinoza Depo. ECF 60-6 at 105:3-

5

108:19 (describing an office-based work environment in which he spent most of the day

6

contacting his independent Representatives, with no discussion of manual labor tasks). Defendant

7

further points to declarations from non-plaintiff DSMs in which they describe performing varying

8

degrees of manual labor. See Guerrios Decl., ECF 60-13 at ¶ 9 (“The physical tasks associated

9

with [recruiting] activities are not a major production and are a minimal, insignificant part of my

10

job.”); see also Montalvo Decl. ¶ 10 (“[W]hen I was a DSM, I spent only about 20 to 30 minutes

11
United States District Court
Northern District of California

1

in a day performing physical tasks.”).

12

Plaintiffs argue that Avon’s corporate policy demanding DSMs be able to lift 35 pounds,

13

as well as the fact that Avon provides DSMs with an eighty pound tent for campaign events, is

14

evidence that the class as a whole engages in manual labor. This argument is unpersuasive,

15

however, because the evidence presented to the Court by both parties shows that individualized

16

inquiries are necessary to determine whether the “primary duty” of each individual DSM was the

17

performance of office or non-manual work. See Rincon v. AFSCME, 2013 WL 4389460, at *17

18

(N.D. Cal. Aug. 13, 2013) (finding that “fieldwork is not necessarily manual work” for purposes

19

of a union organizer who engaged in substantial out-of-office organizing activities). As the Court

20

in Rincon noted, “an exempt employee can perform some manual work without losing exempt

21

status.” Id. (citing Schaefer v. Ind. Mich. Power Co., 358 F.3d 394, 401 (6th Cir. 2004)).

22

Plaintiffs’ proposed common question is not susceptible to classwide resolution due to the wide

23

disparity in testimony from named Plaintiffs and other DSMs with regard to how much of their

24

work is manual labor, and the need for the Court to individually determine whether each DSM was

25

primarily involved in manual labor rather than office work.

26

Plaintiffs’ second through fourth questions, however, fare better in the commonality

27

inquiry. Plaintiffs’ second question, whether the DSMs’ duties and responsibilities involve work

28

“directly related to management policies or general business operations,” can be determined by
10

1

examining the tasks in which DSMs engage, and does not rise or fall depending on how much

2

time each DSM spends engaged in those activities. Defendant’s own argument supports a finding

3

of commonality with regard to this question: Defendant does not argue that some DSMs engage in

4

work directly related to management policies while others do not, but rather that “DSMs satisfy

5

this requirement because they independently manage their own mini-Avon business and perform

6

promotional work through recruiting, training and motivating reps.” See Opp. at 20. Both parties

7

thus offer a single class-wide argument on the merits of the “directly related” prong. The argument

8

between the parties boils down to whether the types of tasks in which DSMs engage are directly

9

related to management policies, in contrast to the “non-manual work” element, which would force
individualized inquiries as to the amount of time spent on those tasks. Plaintiffs are correct that

11
United States District Court
Northern District of California

10

“[t]he trier of fact can determine if the nineteen (19) finite tasks identified by Defendant are

12

exempt or non-exempt tasks” for purposes of the “directly related” element of the administrative

13

exemption, and therefore this question is sufficient to meet Rule 23(a)(2)’s commonality prong.

14

See Reply, ECF 67 at 2.

15

Though “even a single common question will do” for purposes of Rule 23(a)(2), see Dukes

16

at 2556, the Court notes that the remaining two questions identified by Plaintiffs are also

17

sufficiently common to justify class certification. The third question, whether DSMs customarily

18

and regularly exercise discretion and independent judgment, is susceptible to common proof

19

because of the theory on which Plaintiffs rely. Plaintiffs contend that because Avon

20

Representatives are independent contractors, DSMs are precluded by California law from

21

exercising direct control over them. Defendant responds by arguing that “DSMs use their

22

judgment in a variety of ways including, but not limited to, calendar planning and management,

23

training and coaching [Representatives], resolving issues they encounter in the field, and

24

developing strategies to improve sales.” Opp. at 22. Defendant’s argument is similar to the one it

25

offered with regard to the “directly related” prong: that DSMs necessarily exercise discretion

26

based on their job responsibilities. This question is therefore also susceptible to class-wide

27

resolution.

28

Similarly, Plaintiffs’ fourth proposed common question, whether DSMs work under
11

1

general supervision, relies on proof common to the class. Plaintiffs point to two policies put in

2

place by Avon with regard to all DSMs: both a minimum, baseline supervision policy, and that

3

Avon permits its Division Managers – who supervise DSMs – to impose more supervision over

4

DSMs as desired. See Reply at 7-8. This supervision includes a uniform attendance policy, access

5

to each DSM’s daily calendar, and the monitoring of a DSM’s performance goals. See id. at 4-5.

6

Defendant argues in contrast that DSMs are subject to “infrequent direct supervision and are not

7

required to have their calendars approved by their supervisor,” and contends that the Court will

8

need to make individual inquiries as to whether each DSM was subject to general supervision. See

9

Opp. at 21.

10

Though this is a closer call than the “directly related” and “discretion and independent

United States District Court
Northern District of California

11

judgment” questions, the Court finds that this fourth proposed question is also subject to common

12

proof. Plaintiffs argue that there is sufficient evidence to show that class members were subject to

13

far more than just “general supervision,” including a uniform attendance policy, see Bhowmik

14

Decl., ECF 56-2 Exh. 7 (stating that DSMs are to “adhere to their work calendar and to advise

15

their Division Manager of any deviation from that schedule.”), Division Managers having the

16

ability to access DSMs’ daily calendars, and the capacity of Division Managers to impose

17

additional supervision when key performance indicators (“KPIs”) were not being met. Defendant

18

argues that Plaintiffs’ declarations show that they were subject to varying degrees of supervision,

19

and thus the Court would need to engage in individualized inquiries, but this argument is

20

unpersuasive: Plaintiffs point to evidence that shows various additional forms of supervision

21

which were imposed upon DSMs which, if true, would allow the factfinder to determine that

22

DSMs are subjected to more than just general supervision despite the slight variations in the forms

23

of supervision imposed. See, e.g., Gaskell Depo. at 13:20-14:13 (noting that she, as a Division

24

Manager, has access to her DSMs’ calendars and is “able to review their calendars”); Cabrera

25

Depo. at 32:1-33:23; see also Martin Depo. at 90:15-18 (stating that Division Managers “hold

26

[DSMs] accountable to []the various, you know, job responsibilities and duties”); Gordon Depo. at

27

54:24-55:19 (describing riding along with DSMs in order to supervise them in the field).

28

Though some DSMs may be subject to greater supervision than others, the common
12

1

question here is whether DSMs were subject to more than just general supervision. Defendant

2

points to no persuasive reason why individualized inquiries are required to answer this question,

3

and the Court therefore finds Plaintiffs’ fourth question also sufficiently common to the class.

4

3.

Typicality

Class representatives must have claims that are “typical of the claims” of the other

6

members of the class, in order to ensure that “the named plaintiffs’ claim and the class claims are

7

so interrelated that the interests of the class members will be fairly and adequately protected in

8

their absence.” Gen. Tel. Co. Sw. v. Falcon, 457 U.S. 147, 158 n.13 (1982) (citing Rule 23(a)(3)).

9

Typicality is “directed to ensuring that plaintiffs are proper parties to proceed with the suit.” Reis

10

v. Arizona Beverages USA, 287 F.R.D. 523, 539 (N.D. Cal. 2012). The standard for determining

11
United States District Court
Northern District of California

5

typicality, however, is a permissive one, see id., and asks only whether the claims of the class

12

representatives are “reasonably co-extensive with those of absent class members; they need not be

13

substantially identical.” Hanlon v. Chrysler Corp., 150 F.3d 1011, 1020 (9th Cir. 1998).

14

Defendant argues that Plaintiffs’ claims are not typical “[b]ecause the evidence

15

demonstrates that the manner in which plaintiffs performed their job duties is dissimilar to the way

16

other DSMs performed them.” Opp. at 23. Defendant’s argument is unpersuasive, and relies on a

17

conflation of the commonality and typicality inquiries. The named Plaintiffs and absent class

18

members have claims that are “reasonably co-extensive” with one another – slight variations in the

19

manner in which Plaintiffs performed their jobs as DSMs does not render a single named

20

Plaintiffs’ claim atypical from the rest of the class. All named Plaintiffs challenge the

21

classification of DSMs as exempt – none seek to advance claims that are divergent from the claims

22

of absent class members. See Hanlon at 1020. As such, the named Plaintiffs set forth claims that

23

are typical of the other members of the class.

24

4.

Adequacy

25

The final requirement of Rule 23(a) is that the named Plaintiffs “fairly and adequately

26

protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). The adequacy inquiry requires the

27

Court to make two determinations: (1) whether the named plaintiffs and class counsel have any

28

conflicts of interest with other class members; and (2) whether counsel and the class
13

1

representatives will “vigorously prosecute the action on behalf of the class.” Reis, 287 F.R.D. 523,

2

540 (citing Ellis v. Costco Wholesale Corp., 657 F.3d 970, 985 (9th Cir. 2011)). The Court has an

3

obligation to “ensure that the litigation is brought by a named Plaintiff who understands and

4

controls the major decisions of the case.” Sanchez v. Wal-Mart Stores, Inc., 2009 WL 1514435, at

5

*3 (E.D. Cal. May 28, 2009).

6

Defendant does not challenge the adequacy of the named Plaintiffs or of Plaintiffs’

7

counsel, Blumenthal, Nordrehaug & Bhowmik. Plaintiffs offer declarations in which they

8

recognize that their duty as named Plaintiffs is to the interests of the class as a whole, and that they

9

will not put their own individual interests before those of the class. See, e.g., Becerra Decl. ¶¶ 1011; Bilitch Decl. ¶¶ 10-11. Neither party identifies any possible conflict between the class

11
United States District Court
Northern District of California

10

representatives and any absent class members. Further, Plaintiffs’ counsel has outlined the firm’s

12

experience in class litigation of this type, and points to several other district courts that have found

13

the firm to be adequate counsel. See Mot. at 18; see also Blumenthal Decl. Exh. A.

14

The Court finds that Plaintiffs are adequate class representatives and that Plaintiffs’

15

counsel will vigorously prosecute this action on the class’ behalf. Plaintiffs have therefore met

16

Rule 23(a)(4)’s adequacy requirement.

17

Plaintiffs have made a sufficient showing under all four prongs of Rule 23(a). The Court

18

therefore turns to the requirements of Rule 23(b)(3) to determine if “a class action would achieve

19

economies of time, effort and expense, and promote uniformity of decision as to persons similarly

20

situated, without sacrificing procedural fairness or bringing about other undesirable results.”

21

Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 615 (1997) (citing the Advisory Committee Notes

22

on Rule 23, 28 U.S.C. App. at 697).

23

B.

Rule 23(b)(3)

24

Rule 23(b)(3) permits a court to certify a class only when two criteria are met: (1) the

25

questions of law or fact common to members of the class predominate over any questions

26

affecting only individual members, and (2) that a class action is superior to other available

27

methods for the fair and efficient adjudication of the controversy. See Zinser at 1189. The party

28

seeking class certification bears the burden of showing that common questions of law or fact
14

1

predominate. See id. Though these criteria are interrelated, the court must address each

2

independently. See, e.g., Valentino v. Carter-Wallace, Inc., 97 F.3d 1227, 1234-35 (9th Cir. 1996).

3

Defendant’s argument against Rule 23(b)(3) certification focuses on predominance, and the Court

4

begins its inquiry there.

5
6

1.

Predominance

The Ninth Circuit has stated that the “focus of [the predominance factor] is on the

7

relationship between the common and individual issues.” In re Wells Fargo, 571 F.3d 953, 957.

8

“When common questions present a significant aspect of the case and they can be resolved for all

9

members of the class in a single adjudication, there is clear justification” for certifying a class
action. Hanlon at 1022. The Court must determine whether a “common nucleus of facts and

11
United States District Court
Northern District of California

10

potential legal remedies dominates” the litigation. Id.

12

Defendant’s primary argument against predominance is that a determination of liability by

13

the Court requires “individualized inquiries regarding how DSMs actually perform their job

14

duties,” an argument similar to the one it made regarding commonality. See Opp. at 23-24. Avon

15

argues that Plaintiffs rely too heavily on its uniform exemption policy in support of class

16

certification, while ignoring the individualized inquiries the Court will need to make. See id. at 24

17

(“[T]he evidence overwhelmingly demonstrates that how DSMs perform their job duties, and the

18

time spent on those duties, varies based on numerous factors. . . . On this basis alone, the Court

19

should find that individual issues predominate.”). Defendant is correct that the Court cannot rely

20

on Avon’s uniform exemption policy “to the near exclusion of other factors relevant to the

21

predominance inquiry.” In re Wells Fargo at 960. That being said, “[a]n internal exemption policy

22

that treats all employees alike for exemption purposes suggests that the employer believes some

23

degree of homogeneity exists among the employees.” Id. at 957, 958-59 (“[U]niform corporate

24

policies will often bear heavily on questions of predominance and superiority.”). Thus, the Court

25

looks both the uniform policies identified by Plaintiffs as well as the specific differences between

26

Plaintiffs outlined by Defendant. A review of the evidence proffered by both sides shows that

27

though individual differences exist among the named Plaintiffs and absent class members – as

28

they would in any case in which hundreds of employees engage in the same job – the issues
15

1

common to the class members predominate over those differences. See, e.g., Banks Study, at ¶¶ 6-

2

7.3
First, the three common questions that the Court found appropriate for class treatment –

3
4

whether DSMs’ duties are directly related to management or business operations, whether DSMs

5

regularly exercise independent judgment, and whether DSMs work only under general supervision

6

– are subject to common proof that relies in no small part on the nature of their duties, not the

7

amount of time in which individual DSMs spend on each task. The Court needs to look no further

8

than Defendant’s own arguments and the Banks Study to ascertain that common issues will

9

predominate over individual issues with regard to these three questions. Defendant argues that
DSMs’ responsibilities are directly related to management policies because “they independently

11
United States District Court
Northern District of California

10

manage their own min-Avon business.” Opp. at 21. Nowhere does Avon suggest that some DSMs

12

meet this criterion while others do not – Defendant’s argument rests on the idea that all DSMs

13

engage in duties related to management policies. This broad characterization severely undercuts

14

Defendant’s argument that the Court will need to engage in individual inquiries, let alone that

15

those individual inquiries will predominate over questions common to the class.
Defendant’s arguments regarding Plaintiffs’ “exercise discretion” and “general

16
17

supervision” questions are similarly unpersuasive. Defendant argues that DSMs exercise

18

discretion “in a variety of ways including, but not limited to, calendar planning and management,

19

training and coaching [Representatives], resolving issues they encounter in the field, and

20

developing strategies to improve sales.” Opp. at 22. These, again, are tasks in which Avon claims

21

all DSMs engage. See, e.g., Banks Study. Defendant’s reliance on Friend v. Hertz Corp., a 2011

22

case from this district, actually undermines Avon’s argument here. In Friend, the district court

23

noted that the applicability of an exemption to overcome compensation generally requires a fact-

24

specific inquiry as to the way each employee actually spends his or her time, but that plaintiffs can

25

still certify a class when they show “uniformity in work duties and experiences that would

26
3

27
28

The Banks Study characterized certain Task Areas as “exempt” and others as “non-exempt.” See,
e.g., ECF 61 at ¶¶ 17-18. The Court disregards these legal conclusions, but notes that the Banks
Study contends all 30 DSMs observed spent the majority of their time engaged in the same set of
Task Areas. See id. at ¶ 7.
16

1

diminish the need for individualized inquiry.” See Friend, 2011 WL 750741, at *5 (N.D. Cal. Feb.

2

24, 2011). Defendant has indicated that it intends to rely on the uniformity of DSMs’ work duties

3

– the nature of the tasks they are expected to perform – in support of its classification of those

4

employees as exempt. See, e.g., Opp. at 20-23. Further, Plaintiffs’ legal argument on this question

5

relies on its contention that California law prevents DSMs from exercising control over

6

Representatives because Representatives are independent contractors. This is a legal question that

7

is common to the class as it goes to the general relationship between DSMs and Representatives.

8
9

Though the Court has already noted above that there are individual differences among
DSMs with regard to whether they work under only general supervision, these differences do not
render class treatment inferior to individual actions. This is because Plaintiffs’ theory is not

11
United States District Court
Northern District of California

10

dependent on the specific type of supervision one Division Manager imposes on one DSM, but

12

rather on Avon’s corporate policies that give Division Managers wide latitude to exercise

13

supervisory control over DSMs, and to impose additional supervision as needed. The evidence

14

proffered by Plaintiffs is consistent with this argument, as they point to various ways in which

15

Division Managers control DSMs’ calendars or scheduling, engage in ride alongs with their

16

DSMs, or discipline them when they fail to meet their KPIs. Plaintiffs’ theory of this prong of the

17

administrative exemption is based on both the minimum and maximum amount of supervision

18

allowed by Avon’s company policies.

19

Though Avon contends that a determination of liability requires individualized inquiries as

20

to the work DSMs perform, a review of the evidence and theories to be offered by both sides to the

21

factfinder shows that the questions common to the class predominate over any of these individual

22

questions. A comparison of Defendant’s arguments regarding Plaintiffs’ manual labor question,

23

which the Court found inappropriate for class treatment, and the exercise of discretion question,

24

which the Court found appropriate for class treatment, is instructive. Individual issues would

25

predominate the manual labor question because its answer turns on how much manual labor an

26

individual DSM actually performs. In contrast, common issues predominate with regard to the

27

exercise of discretion question because it turns on whether the nature of the tasks in which DSMs

28

engage require independent judgment or discretion. Because the parties do not dispute what tasks
17

1

DSMs engage in, a factfinder could determine whether, for example, each task outlined in the

2

Banks Study requires a DSM to use his or her discretion. Thus, common questions sit at the heart

3

of this case, and predominate over any individual differences between the Plaintiffs.

4
5

2.

Superiority

In order to certify Plaintiffs’ class under 23(b)(3), the court must also find “that a class

6

action is superior to other available methods for fairly and efficiently adjudicating the

7

controversy.” Fed. R. Civ. P. 23(b)(3). “The superiority inquiry under Rule 23(b)(3) requires a

8

determination of whether the objectives of the particular class action procedure will be achieved in

9

the particular case,” Hanlon v. Chrysler Corp., 150 F.3d 1011, 1023 (9th Cir. 1998). The court

10

United States District Court
Northern District of California

11

finds that two facts weigh heavily in favor of class certification.
First, the proposed class includes employees that still work for Avon. These employees

12

may be afraid to bring actions on their own behalf, for fear of retaliation by their employer.

13

Allowing Plaintiffs to proceed in a representative capacity ensures that all class members will

14

receive their day in court without requiring current employees of Avon to risk their employment to

15

receive that right.

16

Second, if this action were to proceed on an individual basis, it is possible that a judgment

17

in favor of Plaintiffs would bind Avon with respect to other class members by virtue of collateral

18

estoppel, while a judgment in favor of Avon would not bind class members who are not party to

19

the present litigation. For instance, if Plaintiffs were to proceed individually and prove that even

20

the most minimal supervision of DSMs provided for in Avon’s company policies constitutes more

21

than “only general supervision,” Avon would be bound by this finding in future actions by other

22

class members. This would render Avon vulnerable to suit by every other class member without

23

the benefit of the defense it asserts in the current action. On the other hand, if Avon were to

24

succeed on this point, each class member not party to the present action would still retain the

25

ability to bring suit and re-litigate this issue, since collateral estoppel would not apply with respect

26

to non-parties to this litigation. In other words, allowing a class action in this case will ensure that

27

the finality of judgment in this action is a two-way street, not one that adheres only to the benefit

28

of the Plaintiffs and non-party members of an uncertified class.
18

These two facts go directly to two of the four factors outlined in Rule 23(b)(3) and Hanlon

1
2

which a court must consider in the superiority inquiry: the interests of class members in

3

individually controlling the action and the desirability of concentrating the litigation in a single

4

forum. The other two factors – the extent of already-existing litigation and manageability of the

5

action – also support certification. First, neither party identifies in their briefing any existing

6

actions regarding DSMs and overtime misclassification in California. Second, the Court is not

7

persuaded by Defendant’s argument that this case will devolve into “200 mini-trials,” see Opp. at

8

25, because the questions common to the class will serve to streamline the litigation.

9
10

IV.

ORDER
For the foregoing reasons, the Court certifies the following class: “[A]ll persons employed

United States District Court
Northern District of California

11

by Defendant in California as District Sales Managers from April 8, 2009 to the present.” The

12

Court further appoints Blumenthal, Nordrehaug & Bhowmik as class counsel, and approves the

13

designation of named Plaintiffs as representatives of the class.

14
15
16
17

IT IS SO ORDERED.
Dated: April 17, 2015
______________________________________
BETH LABSON FREEMAN
United States District Judge

18
19
20
21
22
23
24
25
26
27
28
19