Preview
12/31/2020
JESSICA RIGGIN (SBN 281712)
1
jriggin@rukinhyland.com
2 VALERIE BRENDER (SBN 298224)
vbrender@rukinhyland.com
3 RUKIN HYLAND & RIGGIN LLP
1939 Harrison Street, Suite 290
4 Oakland, CA 94612
5 Telephone: (415) 421-1800
Facsimile: (415) 421-1700
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MATTHEW C. HELLAND (SBN 250451)
7 helland@nka.com
DANIEL BROME (SBN 278915)
8 dbrome@nka.com
NICHOLS KASTER, LLP
9 235 Montgomery Street, Suite 810
San Francisco, CA 94104
10 Telephone: (415) 277-7235
Facsimile: (415) 277-7238
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Attorneys for Plaintiff
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(Additional Counsel on next page)
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14 SUPERIOR COURT OF THE STATE OF CALIFORNIA
15 COUNTY OF SAN MATEO
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ALIDA MAZARIEGOS, PAULA CASE NO.: 20-CIV-04267
17 GONZALEZ, and JAIME AMAYA
JOINT CASE MANAGEMENT AND
18 TRIAL SETTING CONFERENCE
Plaintiffs, on behalf of themselves
and all others similarly situated, STATEMENT
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v. Date: January 5, 2021
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Time: 8:30 a.m.
VANGUARD CLEANING SYSTEMS,
21 Judge: Hon. Nancy L. Fineman
INC.; RR FRANCHISING, INC., D/B/A
Dept.: 04
22 VANGUARD CLEANING SYSTEMS
OF SOUTHERN CALIFORNIA AND
23 D/B/A VANGUARD CLEANING
SYSTEMS OF NORTHERN
24 CALIFORNIA; BUDDHA CAPITAL
CORPORATION, D/B/A VANGUARD
25 CLEANING SYSTEMS OF
26 SACRAMENTO, D/B/A VANGUARD
CLEANING SYSTEMS OF THE
27 CENTRAL VALLEY, AND D/B/A
VANGUARD CLEANING SYSTEMS
28 OF THE CENTRAL COAST; AND
JOINT CASE MANAGEMENT AND TRIAL SETTING CONFERENCE STATEMENT
1 WINE COUNTRY VENTURES, INC.
D/B/A VANGUARD CLEANING
2 SYSTEMS OF THE NORTH BAY,
AND DOES 1 THROUGH 10,
3 INCLUSIVE,
4 Defendants.
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JOINT CASE MANAGEMENT AND TRIAL SETTING CONFERENCE STATEMENT
1 DAMON M. OTT, Bar No. 215392
dott@littler.com
2 PHILIP B. BALDWIN, Bar No. 307920
pbaldwin@littler.com
3 LITTLER MENDELSON, P.C.
333 Bush Street
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34th Floor
5 San Francisco, CA 94104
Telephone: 415.433.1940
6 Fax No.: 415.399.8490
7 Attorneys for Defendant
Vanguard Cleaning Systems, Inc.
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Fraser A. McAlpine (State Bar No. 248554)
10 JACKSON LEWIS P.C.
50 California Street, 9th Floor
11 San Francisco, California 94111-4615
Telephone: 415) 394-9400
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Facsimile: (415) 394-9401
13 E-mail: Fraser.McAlpine@jacksonlewis.com
14 Attorneys for Defendants RR Franchising, Inc.,
Buddha Capital Corporation and Wine Country Ventures, Inc.
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JOINT CASE MANAGEMENT AND TRIAL SETTING CONFERENCE STATEMENT
1 Plaintiffs Alida Mazariegos, Paula Gonzalez, and Jaime Amaya (collectively “Plaintiffs”)
2 and Defendants Vanguard Cleaning Systems, Inc. (“VCS”); RR Franchising, Inc., d/b/a
3 Vanguard Cleaning Systems of Southern California and d/b/a Vanguard Cleaning Systems of
4 Northern California (“RR Franchising”); Buddha Capital Corporation, d/b/a/ Vanguard Cleaning
5 Systems of Sacramento, d/b/a Vanguard Cleaning Systems of the Central Valley, and d/b/a/
6 Vanguard Cleaning Systems of the Central Coast (“Buddha Capital”); and Wine Country
7 Ventures, Inc. d/b/a Vanguard Cleaning Systems of the North Bay (“Wine Country”)
8 (collectively, “Defendants”) jointly submit this statement in preparation for the parties’ case
9 management and trial setting conference on January 5, 2021.
10 I. STATEMENT OF THE CASE
11 A. Plaintiffs’ Statement
12 Vanguard provides janitorial services to commercial offices, car dealerships, gyms,
13 warehouses, and many other businesses throughout the United States, including in California.
14 Vanguard Cleaning Systems, Inc. has structured its company as a three-tiered franchise system
15 where Vanguard sells Master Franchises to companies like Defendants Buddha Capital Corp
16 d/b/a Vanguard Cleaning Systems of Sacramento, the Central Valley, and the Central Coast, RR
17 Franchising d/b/a Vanguard Cleaning Systems of Southern California and Northern California
18 and Wine Country Ventures, Inc. d/b/a Vanguard Cleaning Systems of the North Bay (referred to
19 collectively as “Master Franchises”). These Master Franchises in turn sell “unit franchises” to
20 Plaintiffs and Class Members.
21 Plaintiffs and Class Members perform janitorial cleaning services for Vanguard’s
22 customers. Plaintiffs claim that they and other unit franchises are not true independent contractor
23 franchisees, but rather Vanguard’s and Master Franchises’ employees under the ABC test for
24 employment status. See Dynamex Operations W. v. Superior Court (2018) 4 Cal.5th 903, 964
25 (describing the ABC test); see also Cal. Labor Code § 2750.3 (codifying the ABC test as of
26 January 1, 2020), repealed and replaced by Cal. Labor Code § 2775 et seq. In a similar case in
27 Massachusetts, the trial court found that Vanguard could not satisfy two of the three prongs of
28 the ABC test. Da Costa v. Vanguard Cleaning Sys., Inc., No. CV 15-04743, 2017 WL 4817349,
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JOINT CASE MANAGEMENT AND TRIAL SETTING CONFERENCE STATEMENT
1 at *6 (Mass. Super. Sept. 29, 2017) (finding that Vanguard failed prong B of the ABC test in part
2 because it touted that it was “a leader in the commercial cleaning industry.”).
3 Plaintiffs bring this case as a class action under California Code of Civil Procedure § 382
4 and a representative action under the California Labor Code Private Attorneys’ General Act,
5 Labor Code Section 2698, et seq. for damages and civil penalties as a result of their
6 misclassification.
7 B. Defendant VCS’s Statement
8 VCS never employed Plaintiffs or any other Unit Franchisees. VCS is exclusively a
9 franchising company and enters into master franchise agreements with Master Franchisees.
10 VCS’s independently owned and operated Master Franchisees then contract with Unit
11 Franchisees as independently franchised businesses to provide commercial cleaning services.
12 Neither VCS nor any of its employees or agents provide commercial cleaning services.
13 Franchising has “existed in this country in one form or another for over 150 years”
14 (Patterson v. Domino’s Pizza, LLC, 60 Cal. 4th 474, 489 (2014)), and, has “become a
15 ubiquitous” and “thriving business model.” Id. at 477. Under this business model, the franchisor,
16 “sells the right to use its trademark and comprehensive business plan” to franchisees who
17 “independently own[], run[], and staff[] the retail outlet that sells goods under the franchisor's
18 name.” Id.
19 On information and belief, many of the Unit Franchisees that Plaintiffs seek to represent
20 – and which Plaintiffs consider “employees” – operate sophisticated businesses with workers of
21 their own. Unit Franchisees are business owners – they are not VCS’s employees.
22 Franchising is a statutorily recognized and permissible method of doing business. The
23 statutes that regulate franchising recognize that the relationship between a franchisor and its
24 franchisees is a commercial relationship, not an employment relationship. The Federal Trade
25 Commission (“FTC”), which authorizes and regulates the sale of franchises in the United States,
26 defines a “franchise” in part as “any continuing commercial relationship or arrangement”
27 whereby the franchisor promises that the franchisee “will obtain the right to operate a business
28 that is identified or associated with the franchisor’s trademark ....” 16 C.F.R. § 436.1(h)(1). (16
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JOINT CASE MANAGEMENT AND TRIAL SETTING CONFERENCE STATEMENT
1 C.F.R. § 436 et seq.).
2 The California Legislature has enacted two statutes to regulate franchise relationships in
3 this State (the California Franchise Investment Law [the “CFIL”] and the California Franchise
4 Relations Act [the “CFRA”]). These statutes have co-existed with the federal Lanham Act for
5 almost 50 years because they contain similar definitions of the “franchise” relationship and, thus,
6 are legally compatible. Like the FTC’s Franchise Rule, these enactments repeatedly characterize
7 franchises as “businesses” and describe the relationship created between a franchisor and a
8 franchisee as a “business relationship.” See, e.g., Cal. Corp. Code §31001 (disclosures are
9 designed to give a better understanding of the parties “business relationship”); §31005(a)(2)
10 (“[t]he operation of the franchisee’s business” must be substantially associated with the
11 franchisor’s trademark); §31011 (franchise fee is the amount paid “for the right to enter into a
12 business under a franchise agreement”).
13 Simply put, the ABC employment test cannot be applied to a relationship, if any,
14 between Plaintiffs (and the Unit Franchisees they seek to represent) and VCS. Beyond being
15 inapplicable under its own terms, any interpretation of the ABC test that would allow the ABC
16 test to be applied to VCS by Unit Franchisees is preempted for one of several reasons, discussed
17 in part below. A pending lawsuit filed in the Southern District of California, entitled
18 International Franchise Association et al. v. State of California et al., 3:20-cv-02243-BAS-DEB
19 (November 17, 2020) has requested declaratory and injunctive relief to prohibit the application
20 of the ABC test as between franchisees and franchisors in California, on the grounds of
21 preemption. That lawsuit could result in a preemption ruling that will have a direct and
22 substantial impact on this litigation.
23 Leaving aside the fact that the Unit Franchisees are not VCS’s employees, this case is
24 entirely inappropriate for class and representative treatment. On information and belief, Unit
25 Franchisees operate their businesses in widely different ways. Some are believed to have smaller
26 operations, while some have larger operations with many workers of their own. Some Unit
27 Franchisees are believed to have owners who perform no work for the business or perform only
28 business management functions, never performing any of the cleaning services their businesses
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JOINT CASE MANAGEMENT AND TRIAL SETTING CONFERENCE STATEMENT
1 provide for their customers. Other owners, it is believed, only perform cleaning services when
2 needed (e.g., due to worker unavailability or business demands), while some owners regularly
3 perform cleaning functions in addition to their business management responsibilities. It is
4 believed that at least one Plaintiff in this case had workers of her own and personally performed
5 no cleaning services for at least a large portion of the relevant period (during which her duties
6 were limited to running her business, including managing the workers she retained). If this case
7 were to go to a trial, the employment status of the Unit Franchisees would be a mere threshold
8 issue. Plaintiffs’ actual claims include (i) nonpayment of wages, including overtime, (ii)
9 unreimbursed expenses, (iii) noncompliant rest breaks, and (iv) noncompliant meal breaks,
10 among others. There would be far too many individualized issues to resolve this case on a class
11 or representative basis, and any such “class” or representative case would be highly
12 unmanageable and a logistical nightmare for the Court.
13 C. Master Franchises’ Statement
14 The Master Franchises create business-to-business relationships that should be analyzed
15 in the context of franchise law, not employment or independent contractor law. Each of the Unit
16 Franchises are independent businesses with the authority to conduct business operations wholly
17 independent from their relationship with the Master Franchises. Indeed, some Unit Franchises
18 perform services for competitors of Vanguard, and all have the authority to do so. The Unit
19 Franchises vary considerably from one another in terms of the overall nature of their business
20 activities, and other characteristics which demonstrate that these franchise-franchisee
21 relationships are not employer-employee relationships. Further, some but not all Unit Franchises
22 have signed arbitration agreements, and some but not all former Unit Franchises have signed
23 releases, including one of the named plaintiffs.
24 II. STATUS OF PLEADINGS
25 All parties have been served, and all parties have answered. Plaintiffs intend to amend
26 their complaint to add Private Attorneys’ General Act (PAGA) claims.
27 III. APPEARANCE OF ALL NAMED PARTIES AND COUNSEL
28 Counsel for Plaintiffs Alida Mazariegos, Paula Gonzalez, and Jaime Amaya and the
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JOINT CASE MANAGEMENT AND TRIAL SETTING CONFERENCE STATEMENT
1 proposed class:
2 Rukin Hyland & Riggin LLP: Jessica Riggin, jriggin@rukinhyland.com; Valerie
3 Brender, vbrender@rukinhyland.com; Contact information: 1939 Harrison Street, Ste. 290;
4 Oakland, California 94612; Telephone: (415) 421-1800; Fax: (415) 421-1700.
5 Nichols Kaster LLP: Matthew Helland, helland@nka.com; Daniel Brome,
6 dbrome@nka.com; Contact information: 235 Montgomery Street, Suite 810; San Francisco, CA
7 94104; Telephone: (415) 277-7235; Fax: (415) 277-7238.
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9 Counsel for Defendant Vanguard Cleaning Systems, Inc.:
10 Damon Ott, DOtt@littler.com; Philip Baldwin, PBaldwin@littler.com; 333 Bush Street,
11 34th Floor, San Francisco, CA 94104; Telephone: (415) 433-1940; Fax: (415) 399-8490.
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13 Counsel for Defendants RR Franchising, Inc., Buddha Capital Corporation and Wine
14 Country Ventures, Inc.:
15 Jackson Lewis PC, Fraser McAlpine, fraser.mcalpine@jacksonlewis.com; Contact
16 information: 50 California Street, Ninth Floor, San Francisco CA 94111, Telephone: (415) 394-
17 9400; Fax: (415) 394-9401.
18 IV. STATUS OF DISCOVERY
19 A. Plaintiffs’ Statement
20 On December 21, 2020, Plaintiffs served their first set of written discovery on
21 Defendants. Plaintiffs anticipate taking Persons Most Knowledgeable Depositions of each
22 Defendant and may also depose certain managers of Defendants. Plaintiffs will depose any
23 experts presented by Defendants. Plaintiffs are evaluating whether they will present any experts
24 in support of class certification or for damages.
25 B. Master Franchises’ Statement
26 The Master Franchisees anticipate engaging in discovery that will show that the Unit
27 Franchises are independent businesses with the authority to conduct business operations wholly
28 independent from their relationship with the Master Franchises. That discovery will show that
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JOINT CASE MANAGEMENT AND TRIAL SETTING CONFERENCE STATEMENT
1 some Unit Franchises perform services for competitors of Vanguard, and that the Unit Franchises
2 vary considerably from one another in terms of the overall nature of their business activities, and
3 other characteristics. To accomplish this, the Master Franchises anticipate taking depositions of
4 owners of numerous Unit Franchises or persons most knowledgeable about the business
5 operations of those Unit Franchises, and in particular business operations unrelated to the
6 business of Vanguard. Further, the Master Franchises intend to conduct discovery to determine
7 whether any or all of the Unit Franchises are necessary or proper parties to this litigation.
8 C. Defendant VCS’s Statement
9 VCS’s intended discovery efforts are similar to those of the Master Franchisees. Unlike
10 the Master Franchisees, VCS has had no direct relationship with the Unit Franchisees during the
11 relevant period, so it is even more necessary for VCS to conduct significant discovery, including
12 deposing each of the Plaintiffs.
13 V. STATUS OF SETTLEMENT OR MEDIATION
14 There is currently no mediation scheduled.
15 VI. PENDING MOTIONS AND PROPOSED NEW HEARING DATE:
16 There are currently no motions pending.
17 VII. LEGAL ISSUES TO BE DECIDED
18 A. Plaintiffs’ Statement
19 The core legal issue is whether Plaintiffs and the putative class are Defendants’
20 employees for purposes of California wage and hour laws. Plaintiffs allege that they are
21 employees under both the “ABC test” for employment status, and the Borello, right-to-control
22 analysis.
23 Under the ABC test, a worker is an employee of the entity for whom he performs labor
24 unless the putative employer proves all three of the following: (A) that the worker is free from
25 the control and direction of the hiring entity in connection with the performance of the work,
26 both under the contract for the performance of the work and in fact; (B) that the worker performs
27 work that is outside the usual course of the hiring entity’s business; and (C) that the worker is
28 customarily engaged in an independently established trade, occupation, or business of the same
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JOINT CASE MANAGEMENT AND TRIAL SETTING CONFERENCE STATEMENT
1 nature as the work performed. Dynamex Operations W. v. Superior Court (2018) 4 Cal.5th 903,
2 964; see also Da Costa, 2017 WL 4817349, at *5 (Vanguard Cleaning Systems, Inc. was liable
3 in a three-tier franchising structure because the top-level franchise was “directly dependent on
4 commercial cleaning work of the ... unit franchisees”); Vazquez v. Jan-Pro Franchising
5 International, Inc. (9th Cir. 2019) 923 F.3d 575, 596, reh'g granted, opinion withdrawn (9th Cir.
6 2019) 930 F.3d 1107, and on reh'g (9th Cir. 2019) 939 F.3d 1045, and opinion reinstated in part
7 on reh'g (9th Cir. 2019) 939 F.3d 1050 (“Thus, as a doctrinal matter, [a top-tier franchise] could
8 be Plaintiffs’ employer under the ABC test even though it is not a party to any contract with
9 Plaintiffs.”).
10 Plaintiffs also allege that they are Defendants’ employees under the traditional “statutory
11 purpose” test for employment status as set forth in S.G. Borello & Sons, Inc. v. Department of
12 Industrial Relations (1989) 48 Cal.3d 341, 350. See Dynamex, 4 Cal.4th at 929. Under Borello,
13 the principal test of an employment relationship is whether the person to whom service is
14 rendered “retains all necessary control” over the operations. 48 Cal.3d at 357. Secondary factors
15 evidencing employee status under Borello include (a) whether the one performing services is
16 engaged in a distinct occupation or business; (b) the kind of occupation, with reference to
17 whether, in the locality, the work is usually done under the direction of the principal or by a
18 specialist without supervision; (c) the skill required in the particular occupation; (d) whether the
19 principal or the worker supplies the instrumentalities, tools, and the place of work for the person
20 doing the work; (e) the length of time for which the services are to be performed; (f) the method
21 of payment, whether by the time or by the job; and (g) whether or not the work is a part of the
22 regular business of the principal. Id. at 351.
23 Plaintiffs allege that as a result of their misclassification, Defendants failed to comply
24 with California wage and hour laws. As a result, Plaintiffs seek damages for Defendants’ failure
25 to provide reimbursement for necessary expenses, unlawful withholding and receipt of earned
26 waged, failure to provide meal and rest breaks, failure to pay California overtime compensation,
27 failure to furnish accurate wage statements, failure to pay earned wages upon discharge, among
28 other claims.
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JOINT CASE MANAGEMENT AND TRIAL SETTING CONFERENCE STATEMENT
1 Plaintiffs seek to certify a class on behalf of all California owner-operator franchisee
2 cleaners who signed a franchise agreement with Vanguard Cleaning Systems, Inc., or any of its
3 master franchisors, and who personally performed cleaning work during the period commencing
4 four years prior to April 6, 2020. Plaintiffs will also seek to amend their complaint to add Private
5 Attorneys’ General Act (PAGA) claims for Vanguard’s Labor Code violations under California
6 Labor Code §§ 201-203, 204, 221, 226, 226.3, 226.7, 226.8, 400-410, 432.5, 450, 510, 512, 558,
7 1174, 1194, 1194.2, 1197, 1197.1, 1174.5, 2802, 2810.3, 2750.3, and IWC Wage Order No. 5.
8 B. Master Franchises’ Statement
9 Because the business-to-business relationship between the Master Franchises and the
10 Unit Franchises are not employment relationships, the Labor Code Sections cited by plaintiffs do
11 not apply. Further, the Master Franchises Defendant assert that Plaintiffs’ claims are barred on
12 the grounds of preemption; specifically, preemption of California’s “ABC” worker-classification
13 test by the Federal Trade Commission’s Franchise Rule, 16 C.F.R. §§ 436.1-437.3, the Federal
14 Trade Commission’s Franchise Rule Guide, and the Lanham Act. There is an inherent,
15 irreconcilable conflict between the Federal law that regulates franchising and the trademark
16 license underlying all franchised businesses and California’s ABC test. The ABC Test
17 impermissibly impinges on the essential feature of the franchise model—control over brand-
18 specific systems and business models. The ABC Test, if interpreted to apply to a franchisor
19 franchisee relationship, would have the perverse effect of converting all franchise relationships,
20 which necessarily require some element of control as defined by the FTC Franchise Rule, into
21 employment relationships despite those relationships being arms’ length and governed by
22 contract. Further, by definition all franchisees are granted the right to operate a business that is
23 identified or associated with the franchisor’s trademark.” 16 C.F.R. 436.1(h). If operating a
24 business identified or associated with the franchisor’s trademark (or offering, selling, or
25 distributing goods, services, or commodities that are identified or associated with the franchisor’s
26 trademark) is considered performing work that is within the usual course of the franchisor’s
27 business, and the ABC test otherwise applies to franchisees, then franchisees (under federal law)
28 would be employees in California under the ABC Test. As such those laws governing franchise
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JOINT CASE MANAGEMENT AND TRIAL SETTING CONFERENCE STATEMENT
1 relationships preempt the application of the ABC test to the relationship between Defendant and
2 each Plaintiff (and putative class member) and, therefore, prohibit use of the ABC test to
3 determine the nature of these relationships. To the extent Plaintiffs’ claims are based on an
4 alleged employment relationship between Plaintiffs and Defendant arising from application of
5 California’s ABC test, Plaintiffs’ claims fail as a matter of law.
6 C. Defendant VCS’s Statement
7 VCS shares the Master Franchisees’ belief that Plaintiffs’ reliance on the ABC Test is
8 both misguided and preempted. See also International Franchise Association et al. v. State of
9 California et al., 3:20-cv-02243-BAS-DEB (S.D. Cal. November 17, 2020) (seeking declaratory
10 and injunctive relief to preclude application of ABC Test between franchisors and franchisees).
11 California statutory law recognizes that the ABC test cannot be applied in all situations, in which
12 case the Borello test must be applied. See Labor Code § 2750.3(a)(3) (“If a court of law rules
13 that the three-part test… cannot be applied to a particular context based on grounds other than an
14 express exception to employment status [e.g., on the grounds of preemption]…, then the
15 determination of employee or independent contractor status in that context shall instead be
16 governed by the California Supreme Court’s decision in S.G. Borello & Sons, Inc. v. Department
17 of Industrial Relations (1989) 48 Cal.3d 341.”) (Brackets added). Unit Franchisees are clearly
18 not VCS’s employees under Borello. Indeed, VCS has had no relationship with Unit Franchisees
19 during the relevant time period. This fact-intensive issue will be briefed in full at the appropriate
20 time.
21 As VCS notes above, this case is also inappropriate for class or representative treatment,
22 including because of the presence of highly individualized issues that would need to be resolved
23 for each of Plaintiffs’ claims, which would result in an unmanageable litigation process. This
24 should become clear as the litigation progresses.
25 VIII. ANTICIPATED MOTIONS AND PROPOSED BREIFING SCHEDULE
26 A. Plaintiffs’ Statement
27 Plaintiffs anticipate filing a motion for class certification after they receive responses to
28 their written discovery and take the Persons Most Knowledgeable depositions of Defendants.
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JOINT CASE MANAGEMENT AND TRIAL SETTING CONFERENCE STATEMENT
1 Plaintiffs propose filing this motion by June 30, 2021.
2 Plaintiffs also anticipate filing a motion for summary adjudication on employment status.
3 Plaintiffs cannot file this motion until after their motion for class certification unless Defendants
4 stipulate to waive one-way intervention under Fireside Bank v. Superior Court (2007) 40 Cal.4th
5 1069, 1078–1083. Plaintiffs propose setting a deadline for this motion after a decision is issued
6 on their motion for class certification.
7 B. Master Franchises’ Statement
8 As stated above, the Master Franchises believe that a significant amount of third party
9 discovery is necessary, and in this climate and under these circumstance believe that a class
10 certification motion by June 30 is premature.
11 The Master Franchises do not stipulate to waive one-way intervention because they
12 believe that the merits of plaintiff’s claims should not be decided before class certification.
13 At the appropriate time, the Master Franchises may file motions to join additional parties,
14 and a motion to resolve the preemption issue.
15 C. Defendant VCS’s Statement
16 VCS agrees that June 30, 2021 is premature for a class certification motion, given the
17 large number of parties and Unit Franchisees at issue, the potential joinder of additional parties
18 (after discovery is conducted on that subject), and issues that have been caused by the COVID-
19 19 Pandemic.
20 At the appropriate time, if needed, VCS anticipates filing a motion relating to the
21 preemption and employment-standard issues. VCS will also oppose any motion to certify a class
22 in this case.
23 IX. LISTING OF ALL PREVIOUSLY SET PRETRIAL DATES AND DEADLINES
24 A. Plaintiffs’ Statement
25 No trial date has been set. Plaintiffs propose that a trial date be set after a decision on their
26 motion for class certification. Plaintiffs have requested a jury trial and anticipate that a class trial
27 will take two to three weeks.
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1 B. Master Franchises’ Statement
2 The Master Franchises agree that the trial date should be set after a decision on class
3 certification. The Master Franchises currently estimate that a class trial, if appropriate, would
4 require five to six weeks, especially if conducted remotely.
5 C. Defendant VCS’s Statement
6 VCS agrees with the Master Franchisees. VCS believes it is too early to assess how much
7 time would be needed for trial and when the Parties would be ready for a trial.
8 X. FURTHER CASE MANAGEMENT AND TRIAL SETTING CONFERENCE
9 A. Plaintiffs’ Statement
10 Plaintiffs propose a further case management conference be set in approximately 120
11 days.
12 B. Master Franchises’ Statement
13 The Master Franchises agree with Plaintiffs’ proposal for a further case management
14 conference to be set in approximately 120 days.
15 C. Defendant VCS’s Statement
16 VCS does not oppose the request for a further conference in approximately 120 days.
17 XI. OTHER MATTERS
18 No other matters at this time.
19 Dated: December 31, 2020 RUKIN HYLAND & RIGGIN LLP
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By:__________________________
21 Valerie Brender
Jessica Riggin
22 Attorneys for Plaintiffs
23
24 31 2020
Dated: December ___, LITTLER MENDELSON P.C.
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By:_________________________
26 Philip Baldwin
Damon Ott
27 Attorneys for Defendant Vanguard Cleaning Systems, Inc.
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31 2020
Dated: December ___, JACKSON LEWIS P.C.
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By:__________________________
4 Fraser A. McAlpine
Attorneys for RR Franchising, Inc., Buddha Capital
5 Corporation, and Wine Country Ventures, Inc.
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12/31/2020 JESSICA RIGGIN (SBN 281712) 1 jriggin@rukinhyland.com 2 VALERIE BRENDER (SBN 298224) vbrender@rukinhyland.com 3 RUKIN HYLAND & RIGGIN LLP 1939 Harrison Street, Suite 290 4 Oakland, CA 94612 5 Telephone: (415) 421-1800 Facsimile: (415) 421-1700 6 MATTHEW C. HELLAND (SBN 250451) 7 helland@nka.com DANIEL BROME (SBN 278915) 8 dbrome@nka.com NICHOLS KASTER, LLP 9 235 Montgomery Street, Suite 810 San Francisco, CA 94104 10 Telephone: (415) 277-7235 Facsimile: (415) 277-7238 11 Attorneys for Plaintiff 12 (Additional Counsel on next page) 13 14 SUPERIOR COURT OF THE STATE OF CALIFORNIA 15 COUNTY OF SAN MATEO 16 ALIDA MAZARIEGOS, PAULA CASE NO.: 20-CIV-04267 17 GONZALEZ, and JAIME AMAYA JOINT CASE MANAGEMENT AND 18 TRIAL SETTING CONFERENCE Plaintiffs, on behalf of themselves and all others similarly situated, STATEMENT 19 v. Date: January 5, 2021 20 Time: 8:30 a.m. VANGUARD CLEANING SYSTEMS, 21 Judge: Hon. Nancy L. Fineman INC.; RR FRANCHISING, INC., D/B/A Dept.: 04 22 VANGUARD CLEANING SYSTEMS OF SOUTHERN CALIFORNIA AND 23 D/B/A VANGUARD CLEANING SYSTEMS OF NORTHERN 24 CALIFORNIA; BUDDHA CAPITAL CORPORATION, D/B/A VANGUARD 25 CLEANING SYSTEMS OF 26 SACRAMENTO, D/B/A VANGUARD CLEANING SYSTEMS OF THE 27 CENTRAL VALLEY, AND D/B/A VANGUARD CLEANING SYSTEMS 28 OF THE CENTRAL COAST; AND JOINT CASE MANAGEMENT AND TRIAL SETTING CONFERENCE STATEMENT 1 WINE COUNTRY VENTURES, INC. D/B/A VANGUARD CLEANING 2 SYSTEMS OF THE NORTH BAY, AND DOES 1 THROUGH 10, 3 INCLUSIVE, 4 Defendants. 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 JOINT CASE MANAGEMENT AND TRIAL SETTING CONFERENCE STATEMENT 1 DAMON M. OTT, Bar No. 215392 dott@littler.com 2 PHILIP B. BALDWIN, Bar No. 307920 pbaldwin@littler.com 3 LITTLER MENDELSON, P.C. 333 Bush Street 4 34th Floor 5 San Francisco, CA 94104 Telephone: 415.433.1940 6 Fax No.: 415.399.8490 7 Attorneys for Defendant Vanguard Cleaning Systems, Inc. 8 9 Fraser A. McAlpine (State Bar No. 248554) 10 JACKSON LEWIS P.C. 50 California Street, 9th Floor 11 San Francisco, California 94111-4615 Telephone: 415) 394-9400 12 Facsimile: (415) 394-9401 13 E-mail: Fraser.McAlpine@jacksonlewis.com 14 Attorneys for Defendants RR Franchising, Inc., Buddha Capital Corporation and Wine Country Ventures, Inc. 15 16 17 18 19 20 21 22 23 24 25 26 27 28 JOINT CASE MANAGEMENT AND TRIAL SETTING CONFERENCE STATEMENT 1 Plaintiffs Alida Mazariegos, Paula Gonzalez, and Jaime Amaya (collectively “Plaintiffs”) 2 and Defendants Vanguard Cleaning Systems, Inc. (“VCS”); RR Franchising, Inc., d/b/a 3 Vanguard Cleaning Systems of Southern California and d/b/a Vanguard Cleaning Systems of 4 Northern California (“RR Franchising”); Buddha Capital Corporation, d/b/a/ Vanguard Cleaning 5 Systems of Sacramento, d/b/a Vanguard Cleaning Systems of the Central Valley, and d/b/a/ 6 Vanguard Cleaning Systems of the Central Coast (“Buddha Capital”); and Wine Country 7 Ventures, Inc. d/b/a Vanguard Cleaning Systems of the North Bay (“Wine Country”) 8 (collectively, “Defendants”) jointly submit this statement in preparation for the parties’ case 9 management and trial setting conference on January 5, 2021. 10 I. STATEMENT OF THE CASE 11 A. Plaintiffs’ Statement 12 Vanguard provides janitorial services to commercial offices, car dealerships, gyms, 13 warehouses, and many other businesses throughout the United States, including in California. 14 Vanguard Cleaning Systems, Inc. has structured its company as a three-tiered franchise system 15 where Vanguard sells Master Franchises to companies like Defendants Buddha Capital Corp 16 d/b/a Vanguard Cleaning Systems of Sacramento, the Central Valley, and the Central Coast, RR 17 Franchising d/b/a Vanguard Cleaning Systems of Southern California and Northern California 18 and Wine Country Ventures, Inc. d/b/a Vanguard Cleaning Systems of the North Bay (referred to 19 collectively as “Master Franchises”). These Master Franchises in turn sell “unit franchises” to 20 Plaintiffs and Class Members. 21 Plaintiffs and Class Members perform janitorial cleaning services for Vanguard’s 22 customers. Plaintiffs claim that they and other unit franchises are not true independent contractor 23 franchisees, but rather Vanguard’s and Master Franchises’ employees under the ABC test for 24 employment status. See Dynamex Operations W. v. Superior Court (2018) 4 Cal.5th 903, 964 25 (describing the ABC test); see also Cal. Labor Code § 2750.3 (codifying the ABC test as of 26 January 1, 2020), repealed and replaced by Cal. Labor Code § 2775 et seq. In a similar case in 27 Massachusetts, the trial court found that Vanguard could not satisfy two of the three prongs of 28 the ABC test. Da Costa v. Vanguard Cleaning Sys., Inc., No. CV 15-04743, 2017 WL 4817349, 1 JOINT CASE MANAGEMENT AND TRIAL SETTING CONFERENCE STATEMENT 1 at *6 (Mass. Super. Sept. 29, 2017) (finding that Vanguard failed prong B of the ABC test in part 2 because it touted that it was “a leader in the commercial cleaning industry.”). 3 Plaintiffs bring this case as a class action under California Code of Civil Procedure § 382 4 and a representative action under the California Labor Code Private Attorneys’ General Act, 5 Labor Code Section 2698, et seq. for damages and civil penalties as a result of their 6 misclassification. 7 B. Defendant VCS’s Statement 8 VCS never employed Plaintiffs or any other Unit Franchisees. VCS is exclusively a 9 franchising company and enters into master franchise agreements with Master Franchisees. 10 VCS’s independently owned and operated Master Franchisees then contract with Unit 11 Franchisees as independently franchised businesses to provide commercial cleaning services. 12 Neither VCS nor any of its employees or agents provide commercial cleaning services. 13 Franchising has “existed in this country in one form or another for over 150 years” 14 (Patterson v. Domino’s Pizza, LLC, 60 Cal. 4th 474, 489 (2014)), and, has “become a 15 ubiquitous” and “thriving business model.” Id. at 477. Under this business model, the franchisor, 16 “sells the right to use its trademark and comprehensive business plan” to franchisees who 17 “independently own[], run[], and staff[] the retail outlet that sells goods under the franchisor's 18 name.” Id. 19 On information and belief, many of the Unit Franchisees that Plaintiffs seek to represent 20 – and which Plaintiffs consider “employees” – operate sophisticated businesses with workers of 21 their own. Unit Franchisees are business owners – they are not VCS’s employees. 22 Franchising is a statutorily recognized and permissible method of doing business. The 23 statutes that regulate franchising recognize that the relationship between a franchisor and its 24 franchisees is a commercial relationship, not an employment relationship. The Federal Trade 25 Commission (“FTC”), which authorizes and regulates the sale of franchises in the United States, 26 defines a “franchise” in part as “any continuing commercial relationship or arrangement” 27 whereby the franchisor promises that the franchisee “will obtain the right to operate a business 28 that is identified or associated with the franchisor’s trademark ....” 16 C.F.R. § 436.1(h)(1). (16 2 JOINT CASE MANAGEMENT AND TRIAL SETTING CONFERENCE STATEMENT 1 C.F.R. § 436 et seq.). 2 The California Legislature has enacted two statutes to regulate franchise relationships in 3 this State (the California Franchise Investment Law [the “CFIL”] and the California Franchise 4 Relations Act [the “CFRA”]). These statutes have co-existed with the federal Lanham Act for 5 almost 50 years because they contain similar definitions of the “franchise” relationship and, thus, 6 are legally compatible. Like the FTC’s Franchise Rule, these enactments repeatedly characterize 7 franchises as “businesses” and describe the relationship created between a franchisor and a 8 franchisee as a “business relationship.” See, e.g., Cal. Corp. Code §31001 (disclosures are 9 designed to give a better understanding of the parties “business relationship”); §31005(a)(2) 10 (“[t]he operation of the franchisee’s business” must be substantially associated with the 11 franchisor’s trademark); §31011 (franchise fee is the amount paid “for the right to enter into a 12 business under a franchise agreement”). 13 Simply put, the ABC employment test cannot be applied to a relationship, if any, 14 between Plaintiffs (and the Unit Franchisees they seek to represent) and VCS. Beyond being 15 inapplicable under its own terms, any interpretation of the ABC test that would allow the ABC 16 test to be applied to VCS by Unit Franchisees is preempted for one of several reasons, discussed 17 in part below. A pending lawsuit filed in the Southern District of California, entitled 18 International Franchise Association et al. v. State of California et al., 3:20-cv-02243-BAS-DEB 19 (November 17, 2020) has requested declaratory and injunctive relief to prohibit the application 20 of the ABC test as between franchisees and franchisors in California, on the grounds of 21 preemption. That lawsuit could result in a preemption ruling that will have a direct and 22 substantial impact on this litigation. 23 Leaving aside the fact that the Unit Franchisees are not VCS’s employees, this case is 24 entirely inappropriate for class and representative treatment. On information and belief, Unit 25 Franchisees operate their businesses in widely different ways. Some are believed to have smaller 26 operations, while some have larger operations with many workers of their own. Some Unit 27 Franchisees are believed to have owners who perform no work for the business or perform only 28 business management functions, never performing any of the cleaning services their businesses 3 JOINT CASE MANAGEMENT AND TRIAL SETTING CONFERENCE STATEMENT 1 provide for their customers. Other owners, it is believed, only perform cleaning services when 2 needed (e.g., due to worker unavailability or business demands), while some owners regularly 3 perform cleaning functions in addition to their business management responsibilities. It is 4 believed that at least one Plaintiff in this case had workers of her own and personally performed 5 no cleaning services for at least a large portion of the relevant period (during which her duties 6 were limited to running her business, including managing the workers she retained). If this case 7 were to go to a trial, the employment status of the Unit Franchisees would be a mere threshold 8 issue. Plaintiffs’ actual claims include (i) nonpayment of wages, including overtime, (ii) 9 unreimbursed expenses, (iii) noncompliant rest breaks, and (iv) noncompliant meal breaks, 10 among others. There would be far too many individualized issues to resolve this case on a class 11 or representative basis, and any such “class” or representative case would be highly 12 unmanageable and a logistical nightmare for the Court. 13 C. Master Franchises’ Statement 14 The Master Franchises create business-to-business relationships that should be analyzed 15 in the context of franchise law, not employment or independent contractor law. Each of the Unit 16 Franchises are independent businesses with the authority to conduct business operations wholly 17 independent from their relationship with the Master Franchises. Indeed, some Unit Franchises 18 perform services for competitors of Vanguard, and all have the authority to do so. The Unit 19 Franchises vary considerably from one another in terms of the overall nature of their business 20 activities, and other characteristics which demonstrate that these franchise-franchisee 21 relationships are not employer-employee relationships. Further, some but not all Unit Franchises 22 have signed arbitration agreements, and some but not all former Unit Franchises have signed 23 releases, including one of the named plaintiffs. 24 II. STATUS OF PLEADINGS 25 All parties have been served, and all parties have answered. Plaintiffs intend to amend 26 their complaint to add Private Attorneys’ General Act (PAGA) claims. 27 III. APPEARANCE OF ALL NAMED PARTIES AND COUNSEL 28 Counsel for Plaintiffs Alida Mazariegos, Paula Gonzalez, and Jaime Amaya and the 4 JOINT CASE MANAGEMENT AND TRIAL SETTING CONFERENCE STATEMENT 1 proposed class: 2 Rukin Hyland & Riggin LLP: Jessica Riggin, jriggin@rukinhyland.com; Valerie 3 Brender, vbrender@rukinhyland.com; Contact information: 1939 Harrison Street, Ste. 290; 4 Oakland, California 94612; Telephone: (415) 421-1800; Fax: (415) 421-1700. 5 Nichols Kaster LLP: Matthew Helland, helland@nka.com; Daniel Brome, 6 dbrome@nka.com; Contact information: 235 Montgomery Street, Suite 810; San Francisco, CA 7 94104; Telephone: (415) 277-7235; Fax: (415) 277-7238. 8 9 Counsel for Defendant Vanguard Cleaning Systems, Inc.: 10 Damon Ott, DOtt@littler.com; Philip Baldwin, PBaldwin@littler.com; 333 Bush Street, 11 34th Floor, San Francisco, CA 94104; Telephone: (415) 433-1940; Fax: (415) 399-8490. 12 13 Counsel for Defendants RR Franchising, Inc., Buddha Capital Corporation and Wine 14 Country Ventures, Inc.: 15 Jackson Lewis PC, Fraser McAlpine, fraser.mcalpine@jacksonlewis.com; Contact 16 information: 50 California Street, Ninth Floor, San Francisco CA 94111, Telephone: (415) 394- 17 9400; Fax: (415) 394-9401. 18 IV. STATUS OF DISCOVERY 19 A. Plaintiffs’ Statement 20 On December 21, 2020, Plaintiffs served their first set of written discovery on 21 Defendants. Plaintiffs anticipate taking Persons Most Knowledgeable Depositions of each 22 Defendant and may also depose certain managers of Defendants. Plaintiffs will depose any 23 experts presented by Defendants. Plaintiffs are evaluating whether they will present any experts 24 in support of class certification or for damages. 25 B. Master Franchises’ Statement 26 The Master Franchisees anticipate engaging in discovery that will show that the Unit 27 Franchises are independent businesses with the authority to conduct business operations wholly 28 independent from their relationship with the Master Franchises. That discovery will show that 5 JOINT CASE MANAGEMENT AND TRIAL SETTING CONFERENCE STATEMENT 1 some Unit Franchises perform services for competitors of Vanguard, and that the Unit Franchises 2 vary considerably from one another in terms of the overall nature of their business activities, and 3 other characteristics. To accomplish this, the Master Franchises anticipate taking depositions of 4 owners of numerous Unit Franchises or persons most knowledgeable about the business 5 operations of those Unit Franchises, and in particular business operations unrelated to the 6 business of Vanguard. Further, the Master Franchises intend to conduct discovery to determine 7 whether any or all of the Unit Franchises are necessary or proper parties to this litigation. 8 C. Defendant VCS’s Statement 9 VCS’s intended discovery efforts are similar to those of the Master Franchisees. Unlike 10 the Master Franchisees, VCS has had no direct relationship with the Unit Franchisees during the 11 relevant period, so it is even more necessary for VCS to conduct significant discovery, including 12 deposing each of the Plaintiffs. 13 V. STATUS OF SETTLEMENT OR MEDIATION 14 There is currently no mediation scheduled. 15 VI. PENDING MOTIONS AND PROPOSED NEW HEARING DATE: 16 There are currently no motions pending. 17 VII. LEGAL ISSUES TO BE DECIDED 18 A. Plaintiffs’ Statement 19 The core legal issue is whether Plaintiffs and the putative class are Defendants’ 20 employees for purposes of California wage and hour laws. Plaintiffs allege that they are 21 employees under both the “ABC test” for employment status, and the Borello, right-to-control 22 analysis. 23 Under the ABC test, a worker is an employee of the entity for whom he performs labor 24 unless the putative employer proves all three of the following: (A) that the worker is free from 25 the control and direction of the hiring entity in connection with the performance of the work, 26 both under the contract for the performance of the work and in fact; (B) that the worker performs 27 work that is outside the usual course of the hiring entity’s business; and (C) that the worker is 28 customarily engaged in an independently established trade, occupation, or business of the same 6 JOINT CASE MANAGEMENT AND TRIAL SETTING CONFERENCE STATEMENT 1 nature as the work performed. Dynamex Operations W. v. Superior Court (2018) 4 Cal.5th 903, 2 964; see also Da Costa, 2017 WL 4817349, at *5 (Vanguard Cleaning Systems, Inc. was liable 3 in a three-tier franchising structure because the top-level franchise was “directly dependent on 4 commercial cleaning work of the ... unit franchisees”); Vazquez v. Jan-Pro Franchising 5 International, Inc. (9th Cir. 2019) 923 F.3d 575, 596, reh'g granted, opinion withdrawn (9th Cir. 6 2019) 930 F.3d 1107, and on reh'g (9th Cir. 2019) 939 F.3d 1045, and opinion reinstated in part 7 on reh'g (9th Cir. 2019) 939 F.3d 1050 (“Thus, as a doctrinal matter, [a top-tier franchise] could 8 be Plaintiffs’ employer under the ABC test even though it is not a party to any contract with 9 Plaintiffs.”). 10 Plaintiffs also allege that they are Defendants’ employees under the traditional “statutory 11 purpose” test for employment status as set forth in S.G. Borello & Sons, Inc. v. Department of 12 Industrial Relations (1989) 48 Cal.3d 341, 350. See Dynamex, 4 Cal.4th at 929. Under Borello, 13 the principal test of an employment relationship is whether the person to whom service is 14 rendered “retains all necessary control” over the operations. 48 Cal.3d at 357. Secondary factors 15 evidencing employee status under Borello include (a) whether the one performing services is 16 engaged in a distinct occupation or business; (b) the kind of occupation, with reference to 17 whether, in the locality, the work is usually done under the direction of the principal or by a 18 specialist without supervision; (c) the skill required in the particular occupation; (d) whether the 19 principal or the worker supplies the instrumentalities, tools, and the place of work for the person 20 doing the work; (e) the length of time for which the services are to be performed; (f) the method 21 of payment, whether by the time or by the job; and (g) whether or not the work is a part of the 22 regular business of the principal. Id. at 351. 23 Plaintiffs allege that as a result of their misclassification, Defendants failed to comply 24 with California wage and hour laws. As a result, Plaintiffs seek damages for Defendants’ failure 25 to provide reimbursement for necessary expenses, unlawful withholding and receipt of earned 26 waged, failure to provide meal and rest breaks, failure to pay California overtime compensation, 27 failure to furnish accurate wage statements, failure to pay earned wages upon discharge, among 28 other claims. 7 JOINT CASE MANAGEMENT AND TRIAL SETTING CONFERENCE STATEMENT 1 Plaintiffs seek to certify a class on behalf of all California owner-operator franchisee 2 cleaners who signed a franchise agreement with Vanguard Cleaning Systems, Inc., or any of its 3 master franchisors, and who personally performed cleaning work during the period commencing 4 four years prior to April 6, 2020. Plaintiffs will also seek to amend their complaint to add Private 5 Attorneys’ General Act (PAGA) claims for Vanguard’s Labor Code violations under California 6 Labor Code §§ 201-203, 204, 221, 226, 226.3, 226.7, 226.8, 400-410, 432.5, 450, 510, 512, 558, 7 1174, 1194, 1194.2, 1197, 1197.1, 1174.5, 2802, 2810.3, 2750.3, and IWC Wage Order No. 5. 8 B. Master Franchises’ Statement 9 Because the business-to-business relationship between the Master Franchises and the 10 Unit Franchises are not employment relationships, the Labor Code Sections cited by plaintiffs do 11 not apply. Further, the Master Franchises Defendant assert that Plaintiffs’ claims are barred on 12 the grounds of preemption; specifically, preemption of California’s “ABC” worker-classification 13 test by the Federal Trade Commission’s Franchise Rule, 16 C.F.R. §§ 436.1-437.3, the Federal 14 Trade Commission’s Franchise Rule Guide, and the Lanham Act. There is an inherent, 15 irreconcilable conflict between the Federal law that regulates franchising and the trademark 16 license underlying all franchised businesses and California’s ABC test. The ABC Test 17 impermissibly impinges on the essential feature of the franchise model—control over brand- 18 specific systems and business models. The ABC Test, if interpreted to apply to a franchisor 19 franchisee relationship, would have the perverse effect of converting all franchise relationships, 20 which necessarily require some element of control as defined by the FTC Franchise Rule, into 21 employment relationships despite those relationships being arms’ length and governed by 22 contract. Further, by definition all franchisees are granted the right to operate a business that is 23 identified or associated with the franchisor’s trademark.” 16 C.F.R. 436.1(h). If operating a 24 business identified or associated with the franchisor’s trademark (or offering, selling, or 25 distributing goods, services, or commodities that are identified or associated with the franchisor’s 26 trademark) is considered performing work that is within the usual course of the franchisor’s 27 business, and the ABC test otherwise applies to franchisees, then franchisees (under federal law) 28 would be employees in California under the ABC Test. As such those laws governing franchise 8 JOINT CASE MANAGEMENT AND TRIAL SETTING CONFERENCE STATEMENT 1 relationships preempt the application of the ABC test to the relationship between Defendant and 2 each Plaintiff (and putative class member) and, therefore, prohibit use of the ABC test to 3 determine the nature of these relationships. To the extent Plaintiffs’ claims are based on an 4 alleged employment relationship between Plaintiffs and Defendant arising from application of 5 California’s ABC test, Plaintiffs’ claims fail as a matter of law. 6 C. Defendant VCS’s Statement 7 VCS shares the Master Franchisees’ belief that Plaintiffs’ reliance on the ABC Test is 8 both misguided and preempted. See also International Franchise Association et al. v. State of 9 California et al., 3:20-cv-02243-BAS-DEB (S.D. Cal. November 17, 2020) (seeking declaratory 10 and injunctive relief to preclude application of ABC Test between franchisors and franchisees). 11 California statutory law recognizes that the ABC test cannot be applied in all situations, in which 12 case the Borello test must be applied. See Labor Code § 2750.3(a)(3) (“If a court of law rules 13 that the three-part test… cannot be applied to a particular context based on grounds other than an 14 express exception to employment status [e.g., on the grounds of preemption]…, then the 15 determination of employee or independent contractor status in that context shall instead be 16 governed by the California Supreme Court’s decision in S.G. Borello & Sons, Inc. v. Department 17 of Industrial Relations (1989) 48 Cal.3d 341.”) (Brackets added). Unit Franchisees are clearly 18 not VCS’s employees under Borello. Indeed, VCS has had no relationship with Unit Franchisees 19 during the relevant time period. This fact-intensive issue will be briefed in full at the appropriate 20 time. 21 As VCS notes above, this case is also inappropriate for class or representative treatment, 22 including because of the presence of highly individualized issues that would need to be resolved 23 for each of Plaintiffs’ claims, which would result in an unmanageable litigation process. This 24 should become clear as the litigation progresses. 25 VIII. ANTICIPATED MOTIONS AND PROPOSED BREIFING SCHEDULE 26 A. Plaintiffs’ Statement 27 Plaintiffs anticipate filing a motion for class certification after they receive responses to 28 their written discovery and take the Persons Most Knowledgeable depositions of Defendants. 9 JOINT CASE MANAGEMENT AND TRIAL SETTING CONFERENCE STATEMENT 1 Plaintiffs propose filing this motion by June 30, 2021. 2 Plaintiffs also anticipate filing a motion for summary adjudication on employment status. 3 Plaintiffs cannot file this motion until after their motion for class certification unless Defendants 4 stipulate to waive one-way intervention under Fireside Bank v. Superior Court (2007) 40 Cal.4th 5 1069, 1078–1083. Plaintiffs propose setting a deadline for this motion after a decision is issued 6 on their motion for class certification. 7 B. Master Franchises’ Statement 8 As stated above, the Master Franchises believe that a significant amount of third party 9 discovery is necessary, and in this climate and under these circumstance believe that a class 10 certification motion by June 30 is premature. 11 The Master Franchises do not stipulate to waive one-way intervention because they 12 believe that the merits of plaintiff’s claims should not be decided before class certification. 13 At the appropriate time, the Master Franchises may file motions to join additional parties, 14 and a motion to resolve the preemption issue. 15 C. Defendant VCS’s Statement 16 VCS agrees that June 30, 2021 is premature for a class certification motion, given the 17 large number of parties and Unit Franchisees at issue, the potential joinder of additional parties 18 (after discovery is conducted on that subject), and issues that have been caused by the COVID- 19 19 Pandemic. 20 At the appropriate time, if needed, VCS anticipates filing a motion relating to the 21 preemption and employment-standard issues. VCS will also oppose any motion to certify a class 22 in this case. 23 IX. LISTING OF ALL PREVIOUSLY SET PRETRIAL DATES AND DEADLINES 24 A. Plaintiffs’ Statement 25 No trial date has been set. Plaintiffs propose that a trial date be set after a decision on their 26 motion for class certification. Plaintiffs have requested a jury trial and anticipate that a class trial 27 will take two to three weeks. 28 10 JOINT CASE MANAGEMENT AND TRIAL SETTING CONFERENCE STATEMENT 1 B. Master Franchises’ Statement 2 The Master Franchises agree that the trial date should be set after a decision on class 3 certification. The Master Franchises currently estimate that a class trial, if appropriate, would 4 require five to six weeks, especially if conducted remotely. 5 C. Defendant VCS’s Statement 6 VCS agrees with the Master Franchisees. VCS believes it is too early to assess how much 7 time would be needed for trial and when the Parties would be ready for a trial. 8 X. FURTHER CASE MANAGEMENT AND TRIAL SETTING CONFERENCE 9 A. Plaintiffs’ Statement 10 Plaintiffs propose a further case management conference be set in approximately 120 11 days. 12 B. Master Franchises’ Statement 13 The Master Franchises agree with Plaintiffs’ proposal for a further case management 14 conference to be set in approximately 120 days. 15 C. Defendant VCS’s Statement 16 VCS does not oppose the request for a further conference in approximately 120 days. 17 XI. OTHER MATTERS 18 No other matters at this time. 19 Dated: December 31, 2020 RUKIN HYLAND & RIGGIN LLP 20 By:__________________________ 21 Valerie Brender Jessica Riggin 22 Attorneys for Plaintiffs 23 24 31 2020 Dated: December ___, LITTLER MENDELSON P.C. 25 By:_________________________ 26 Philip Baldwin Damon Ott 27 Attorneys for Defendant Vanguard Cleaning Systems, Inc. 28 11 JOINT CASE MANAGEMENT AND TRIAL SETTING CONFERENCE STATEMENT 1 31 2020 Dated: December ___, JACKSON LEWIS P.C. 2 3 By:__________________________ 4 Fraser A. McAlpine Attorneys for RR Franchising, Inc., Buddha Capital 5 Corporation, and Wine Country Ventures, Inc. 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12 JOINT CASE MANAGEMENT AND TRIAL SETTING CONFERENCE STATEMENT