Legal Document: ALIDA MAZARIEGOS vs VANGUARD CLEANING SYSTEMS, INC

On October 01, 2020 a 64608PLAIN004513 was filed involving a dispute between Amaya, Jaime, Bass, Ryne, Gonzalez, Paula, Jaime Amaya, On Behalf Of Themselves And All Others Similarly Situated, Mazariegos, Alida, Tello, Adriana, Tello, Georgina, and Buddha Capital Corporation, Does 1 Through 10, Inclusive, Rr Franchising, Inc, Vanguard Cleaning Systems, Inc, Vanguard Cleaning Systems Of The Central Valley, Wine Country Ventures, Inc., for Complex Civil Unlimited Class Action in the District Court of San Mateo County.

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1 JESSICA RIGGIN (SBN 281712)
jriggin@rukinhyland.com
2 VALERIE BRENDER (SBN 298224)
vbrender@rukinhyland.com
3
RUKIN HYLAND & RIGGIN LLP
4 1939 Harrison Street, Suite 290
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
9 NICHOLS KASTER, LLP
235 Montgomery Street, Suite 810
10 San Francisco, CA 94104
Telephone: (415) 277-7235
11 Facsimile: (415) 277-7238

12 Attorneys for Plaintiffs

14 SUPERIOR COURT OF THE STATE OF CALIFORNIA

15 COUNTY OF SAN MATEO

16 CASE NO.: 20-CIV-04267
ALIDA MAZARIEGOS, PAULA
17 GONZALEZ, and JAIME AMAYA
PLAINTIFFS’ RENEWED NOTICE OF
18 Plaintiffs, on behalf of themselves MOTION AND MEMORANDUM OF
and all others similarly situated, POINTS AND AUTHORITIES IN
19 SUPPORT OF MOTION FOR CLASS
v. CERTIFICATION AND
20 APPOINTMENT AS CLASS COUNSEL
VANGUARD CLEANING SYSTEMS,
21 INC.; RR FRANCHISING, INC., D/B/A
VANGUARD CLEANING SYSTEMS OF Judge: Hon. Nancy L. Fineman
22 SOUTHERN CALIFORNIA AND D/B/A Dept.: 04
VANGUARD CLEANING SYSTEMS OF Date: March 28, 2023
23 NORTHERN CALIFORNIA; BUDDHA Time: 2:00 p.m.
24 CAPITAL CORPORATION, D/B/A
VANGUARD CLEANING SYSTEMS OF
25 SACRAMENTO, D/B/A VANGUARD
CLEANING SYSTEMS OF THE
26 CENTRAL VALLEY, AND D/B/A
VANGUARD CLEANING SYSTEMS OF
27
THE CENTRAL COAST; AND WINE
28 COUNTRY VENTURES, INC. D/B/A

PLAINTIFFS’ RENEWED NOTICE OF MOTION AND MOTION FOR CLASS CERTIFICATION
VANGUARD CLEANING SYSTEMS OF
1
THE NORTH BAY, AND DOES 1
2 THROUGH 10, INCLUSIVE,
Defendants.
3

PLAINTIFFS’ RENEWED NOTICE OF MOTION AND MOTION FOR CLASS CERTIFICATION
TABLE OF CONTENTS
1 I. INTRODUCTION ............................................................................................................... 1
2
II. CLASS STRUCTURE AND SUBCLASSES..................................................................... 2
3
III. STATEMENT OF FACTS.................................................................................................. 4
4
A. VCS and the Regional Franchises Operate a Three-Tiered Commercial Cleaning
5 Business ................................................................................................................... 4
6 1. Both VCS and The Regional Franchises Depend on Unit Franchisees To
Perform The Cleaning Work that is Central to Their Business System. ..... 6
7

8 2. VCS Designed and Directs The Model Under Which Cleaners Perform
Work. ........................................................................................................... 7
9
3. Regional Franchises Run Commercial Cleaning Businesses Under The
10 Structure Created by VCS. .......................................................................... 9

11 B. Plaintiffs and Proposed Class Member Cleaners Perform the Same Cleaning Work
Under Materially Common Agreements that Reserve All Necessary Control over
12 Cleaners’ Work. .................................................................................................... 12
13
C. Vanguard Classifies All Cleaners as Independent Contractors, Requires Them to
14 Bear Common Business Expenses, and Denies Their Statutory Employment
Rights .................................................................................................................... 14
15
IV. ARGUMENT .................................................................................................................... 16
16
A. The Proposed Class is Ascertainable and Numerous ............................................ 16
17
B. Common Questions of Law and Fact Predominate Here ...................................... 17
18
1. Whether Cleaners Are Employees or Independent Contractors is a
19
Common Question That Predominates Over Individual Issues ................ 18
20
2. Common Questions Predominate as to Plaintiffs’ Wage and Hour Claims
21 ................................................................................................................... 25

22 C. Plaintiffs’ Claims are Typical of Those of the Class ............................................ 27
23 D. Plaintiffs and Class Counsel Will Fairly and Adequately Represent the Class .... 27
24 E. Class Treatment is Superior to Hundreds of Individual Actions .......................... 28
25
V. CONCLUSION ................................................................................................................. 29
26

PLAINTIFFS’ RENEWED NOTICE OF MOTION AND MOTION FOR CLASS CERTIFICATION i
TABLE OF AUTHORITIES
1

2
Page(s)
3
Federal Cases
4
Guifu Li v. A Perfect Day Franchise, Inc.
5 (N.D. Cal. Oct. 5, 2011) 2011 WL 4635198 ............................................................................. 27
6
Roman v. Jan-Pro Franchising Int'l, Inc
7 (N.D. Cal. Aug. 2, 2022) 2022 WL 3046758 ...................................................................... 21, 26

8 Vazquez v. Jan-Pro Franchising Int’l, Inc.,
(9th Cir. 2021) 986 F.3d 1106 ............................................................................................. 20, 25
9
Villalpando v. Exel Direct Inc.,
10
(N.D. Cal. 2014) 303 F.R.D. 588 .............................................................................................. 24
11
State Cases
12
Aguiar v. Cintas Corp. No. 2,
13 (2006) 144 Cal. App. 4th 121 .................................................................................................... 17
14 Ayala v. Antelope Valley Newspapers, Inc.,
(2014) 59 Cal.4th 522.............................................................................................. 21, 22, 23, 24
15

16 Beckstead v. Super. Ct.,
(1971) 21 Cal. App. 3d 780 ....................................................................................................... 28
17
Bradley v. Networkers Internat., LLC,
18 (2012) 211 Cal. App. 4th 1129, as modified on denial of reh'g ................................................ 24
19
Brinker Restaurant Corp. v. Sup. Ct.,
20 (2012) 53 Cal. 4th 1004................................................................................................. 16, 17, 18

21 Bufil v. Dollar Fin. Grp., Inc.,
(2008) 162 Cal. App. 4th 1193 .................................................................................................. 17
22

23 Capitol People First v. Dep’t of Developmental Servs.,
(2007) 155 Cal. App. 4th 676 .................................................................................................... 27
24
DaCosta v. Vanguard Cleaning Systems Inc.,
25 (Mass. Super. Sept. 29, 2017) 2017 WL 4817349 ...................................................................... 5
26 Dynamex Operations W. v. Superior Court
27 (2018) 4 Cal. 5th 903............................................................................................... 18, 19, 20, 24

PLAINTIFFS’ RENEWED NOTICE OF MOTION AND MOTION FOR CLASS CERTIFICATION ii
Espejo v. The Copley Press, Inc.,
1 (2017) 13 Cal. App. 5th 329 .................................................................................... 24, 25, 26, 28
2
Estrada v. FedEx Ground Package Sys., Inc.,
3 (2007) 154 Cal. App. 4th 1 ................................................................................................. passim

4 Gattuso v. Harte-Hanks Shoppers, Inc.,
(2007) 42 Cal.4th 554................................................................................................................ 29
5

6 Gentry v. Super. Ct.,
(2007) 42 Cal. 4th 443............................................................................................................... 28
7
Hicks v. Kaufman & Broad Home Corp.,
8 (2001) 89 Cal. App. 4th 908, as modified on denial of reh’g ..................................................... 2
9
Linder v. Thrifty Oil Co.,
10 (2000) 23 Cal.4th 429................................................................................................................ 16

11 Marler v. E.M. Johansing, LLC,
(2011) 199 Cal. App. 4th 1450 .................................................................................................... 2
12
Martinez v. Combs,
13
(2010) 49 Cal. 4th 35................................................................................................................. 18
14
Noel v. Thrifty Payless, Inc.,
15 (2019) 7 Cal. 5th 955................................................................................................................. 17
16 People v. Uber Techs., Inc.,
17 (2020) 56 Cal. App. 5th 266 ...................................................................................................... 20

18 S. G. Borello & Sons, Inc. v. Dep't of Indus. Relations,
(1989) 48 Cal. 3d 341 .............................................................................................. 18, 21, 22, 24
19
Sav-on Drug Stores, Inc. v. Superior Court,
20 (2004) 34 Cal. 4th 319......................................................................................................... 17, 28
21
Seastrom v. Neways, Inc.,
22 (2007) 149 Cal. App. 4th 1496 .................................................................................................. 27

23 Vasquez v. Super. Ct.,
(1971) 4 Cal. 3d 800 .................................................................................................................. 17
24

25 Wilson v. La Jolla Group,
(2021) 61 Cal.App.5th 897 ........................................................................................................ 26
26
State Statutes
27
California Code of Civil Procedure Section 382 ....................................................................... v, 16
28

PLAINTIFFS’ RENEWED NOTICE OF MOTION AND MOTION FOR CLASS CERTIFICATION iii
1 California Labor Code Section 221 ......................................................................................... 25, 26

2 California Labor Code Section 226 ............................................................................................... 26

3 California Labor Code Section 226(a) .......................................................................................... 26

4 California Labor Code Section 2775 ............................................................................................. 19

5 California Labor Code Section 2775(b)(1) ................................................................................... 19

6 California Labor Code Section 2802(a) ........................................................................................ 25

7 State Rules

8 CA Rules of Ct. 3.765 ..................................................................................................................... 2

9 Other Authorities

10 1 Newberg on Class Actions § 3.12 (5th ed. 2011)....................................................................... 17

PLAINTIFFS’ RENEWED NOTICE OF MOTION AND MOTION FOR CLASS CERTIFICATION iv
1 NOTICE OF MOTION AND MOTION

2 TO THE COURT AND ALL PARTIES AND THEIR ATTORNEYS OF RECORD:

3 PLEASE TAKE NOTICE that on March 28, 2023, at 2:00 p.m., or as soon thereafter as

4 this matter may be heard in the courtroom of the Honorable Nancy L. Fineman, in Department 4

5 of the Superior Court of California for the County of San Mateo, Plaintiffs will and hereby do

6 move this Court for an order to certify their claims under California Code of Civil Procedure

7 Section 382. This motion is based on the following Memorandum of Points and Authorities, the

8 supporting declarations of Valerie Brender and Daniel Brome, and attached exhibits, the

9 supporting declarations of Plaintiffs and class members, the accompanying Request for Judicial

10 Notice, all other pleadings and papers on file in this action, and such argument as the Court may

11 hear.

12 Plaintiffs move this Court for an order certifying the following Class:

13 All California owner-operator franchisee cleaners who signed a franchise
14 agreement with Vanguard Cleaning Systems, Inc., or any of its master franchisors,
and who personally performed cleaning work during the period commencing four
15 years prior to April 6, 2020 through the date of trial.

16 Plaintiffs seek certification of the following causes of action from their First Amended

17 Complaint: Numbers One (expense reimbursement), Two (unlawful withholding and receipt of

18 earned wages), Six (failure to provide accurate wage statements), and Eight (unfair competition).

19 Plaintiffs also seek appointment of Plaintiffs’ Counsel—Rukin Hyland & Riggin LLP and Nichols

20 Kaster, LLP—as Class Counsel.

21 Dated: October 7, 2022 NICHOLS KASTER, LLP

22 By: /s/ Daniel S. Brome
Matthew C. Helland
23
Daniel S. Brome
24 Dated: October 7, 2022 RUKIN HYLAND & RIGGIN LLP
25
By: /s/ Jessica Riggin
26 Jessica Riggin
Valerie Brender
27 Attorneys for Plaintiffs
28

PLAINTIFFS’ RENEWED NOTICE OF MOTION AND MOTION FOR CLASS CERTIFICATION v
1 I. INTRODUCTION

2 In light of the Court’s guidance at the August 2022 class certification hearing, Plaintiffs

3 have revised, and now renew, their motion for class certification. Through this renewed motion,

4 Plaintiffs seek to certify only four of their previously eight claims (improper deductions,

5 unreimbursed expenses, wage statement penalties, and unfair competition), and, per the Court’s

6 request, have more explicitly defined the proposed class and subclasses. This narrowed, focused

7 case is well suited for class treatment and the Court should grant Plaintiffs’ renewed motion.

8 Plaintiffs Alida Mazariegos, Paula Gonzalez, and Jaime Amaya (“Plaintiffs”) have all

9 worked as Cleaners for Vanguard, and like all other Vanguard California Cleaners, they were

10 classified as independent contractors and bought their jobs by paying a franchise fee and signing

11 unit franchise agreements with VCS or California Regional Franchises Wine Country Ventures,

12 Inc. (“WCV”), RR Franchising, Inc. (“RR Franchising”), and Buddha Capital Corporation,

13 respectively (“Buddha”) (collectively, the “Regional Franchises”). 1 The Regional Franchises, in

14 turn, sign master franchise agreements with top-tier franchisor Vanguard Cleaning Systems, Inc.

15 (“VCS”) (collectively with the Regional Franchises, “Vanguard”) to create a three-tier franchise

16 commercial cleaning business entirely reliant on the labor of Plaintiffs and other Cleaners. 2

17 By classifying Cleaners as independent contractors, Vanguard has avoided its obligations

18 under California’s labor protection laws. Cleaners have been denied reimbursement for necessary

19 expenses and deductions they have incurred, and they have not been issued compliant wage

20 statements. Cleaners are also owed statutory penalties for these violations.

21 All of the relevant class certification requirements are satisfied. The Class is ascertainable

22 and numerous, Plaintiffs’ claims are typical of proposed Class Members’ claims, and Plaintiffs

23 and their counsel are adequate to represent the proposed Class. Likewise, common claims

24 predominate and a class action proceeding would be superior to many individual proceedings,

25 particularly since the threshold question of employment status and liability as to the underlying

27 1
These entities are frequently referred to as “Master Franchisors” on documents; however, at the
Court’s suggestion, Plaintiffs are using the term “Regional Franchises” throughout their motion.
28 2
Cleaners are often referred to in documents as “unit franchisees.”
PLAINTIFFS’ RENEWED NOTICE OF MOTION AND MOTION FOR CLASS CERTIFICATION 1
1 claims can be readily determined upon common proof as to all Class Members as described in

2 section IV.B.1., infra. Plaintiffs accordingly respectfully request the Court grant their motion for

3 class certification and appointment as class counsel.

4 II. CLASS STRUCTURE AND SUBCLASSES

5 Plaintiffs move this Court for an order certifying one Class covering all Cleaners (the

6 “VCS Class”), and three subclasses—one for each Regional Franchise Defendant (the “Regional

7 Franchise Subclasses”). 3 The Court is not limited by the class definition initially included in the

8 complaint, and it may reframe the class definition(s) to facilitate certification. Marler v. E.M.

9 Johansing, LLC (2011) 199 Cal. App. 4th 1450, 1462; Hicks v. Kaufman & Broad Home Corp.

10 (2001) 89 Cal. App. 4th 908, 916, as modified on denial of reh’g (July 3, 2001) (“if necessary to

11 preserve the case as a class action, the court itself can and should redefine the class where the

12 evidence before it shows such a redefined class would be ascertainable”).

13 The VCS Class is the overarching Class, including the broadest group of Class Members

14 and the broadest set of claims. The VCS Class definition is the same as the class definition in

15 Plaintiffs’ initial motion4:

16 All California owner-operator franchisee cleaners who signed a franchise
17 agreement with Vanguard Cleaning Systems, Inc., or any of its master franchisors,
and who personally performed cleaning work during the period commencing four
18 years prior to April 6, 2020 through the date of trial.

19 The VCS Class includes all Cleaners who cleaned for Vanguard Cleaning Systems in California,

20 regardless of which Regional Franchise they worked through. VCS, as the originator of the three-

21 tier franchise structure and the entity that created all of the relevant controlling policies and

22 agreements, should be responsible for the pervasive Labor Code violations resulting from the

23 misclassification of Vanguard Cleaners. Each of the three Named Plaintiffs is an appropriate and

24 adequate class representative for the VCS Class.

25 3
The Rules of Court provide “[w]hen appropriate, an action may be maintained as a class action
26 limited to particular issues. A class may be divided into subclasses.” CA Rules of Ct. 3.765.
4
Plaintiffs did not initially define subclasses because all Plaintiffs allege the same facts and
27 theories as to the respective Regional Franchises, and the main distinction is that each of the
Regional Franchises will only be liable to Cleaners who worked for VCS through that particular
28 Regional Franchise.
PLAINTIFFS’ RENEWED NOTICE OF MOTION AND MOTION FOR CLASS CERTIFICATION 2
1 Plaintiffs seek certification of the following causes of action from their First Amended

2 Complaint for the VCS Class: One (expense reimbursement), Two (unlawful withholding and

3 receipt of earned wages), Six (failure to provide accurate wage statements), and Eight (unfair

4 competition). In light of the Court’s guidance from the initial class certification hearing, Plaintiffs

5 no longer seek certification of claims Three (meal periods), Four (failure to authorize and permit

6 rest periods), Five (overtime compensation), or Seven (waiting time penalties), although the

7 Named Plaintiffs continue to pursue those claims on an individual basis.

8 In addition to the VCS Class, each Regional Franchise Defendant will be jointly and

9 severally liable, along with VCS, as to the Cleaners it directly employed. These Regional

10 Franchise Defendants have the right to control their Cleaners’ work and do, in fact, exercise that

11 control. Cleaners who worked for one of the three named Regional Franchise Defendants

12 therefore have claims against the particular Regional Franchise for which they worked in addition

13 to their claims against VCS, such that it is appropriate to have three subclasses—one for each of

14 the three Regional Franchise Defendants. 5 By including these three additional subclasses, the

15 Court will more efficiently be able to rule on merits questions of which Defendants are liable to

16 which Cleaners.

17 Plaintiffs’ proposed subclasses are defined and explained in the chart below:
Class/ Class Defendant(s) Class members Included Excluded
18 Subclass Rep(s) Class Claims Class Claims
19 VCS Jaime VCS All California Unreimbursed Overtime,
Class Amaya, owner-operator expenses; meal, rest,
20 Paula franchisee cleaners improper waiting time –
Gonzalez, who signed a deductions; only pursuing
21 Alida franchise wage individually.
Mazariegos agreement with statement
22 Vanguard Cleaning penalties;
Systems, Inc., or unfair
23 any of its master competition
franchisors, and
24 who personally
performed cleaning
25 work since April 6,
2016.
26

27
5
There is a fourth Regional Franchise, Prestige Worldwide, that is not named in this case;
28 Cleaners who worked for that franchise have claims only against VCS in this case.
PLAINTIFFS’ RENEWED NOTICE OF MOTION AND MOTION FOR CLASS CERTIFICATION 3
Buddha Jaime VCS, VCS Class Unreimbursed Overtime,
1 Subclass Amaya Buddha Members who expenses; meal, rest,
personally improper waiting time –
2 performed cleaning deductions; only pursuing
work through wage individually.
3 Buddha statement
penalties;
4 unfair
competition.
5 RRF Paula VCS, RRF VCS class members Unreimbursed Overtime,
Subclass Gonzalez who personally expenses; meal, rest,
6 performed cleaning improper waiting time –
work through RR deductions; only pursuing
7 Franchising, Inc. wage individually.
statement
8 penalties;
unfair
9 competition.
WCV Alida VCS, WCV VCS Class Unreimbursed Overtime,
10 Subclass Mazariegos Members who expenses; meal, rest,
personally improper waiting time –
11 performed cleaning deductions; only pursuing
work through Wine unfair individually;
12 Country Ventures. competition. wage
statements –
13 time barred.
14 Put simply, under Plaintiffs’ proposal, all Vanguard Cleaners would have claims against
15 VCS for unreimbursed expenses, improper deductions, wage statement penalties, and unfair
16 competition; the subset who worked for Buddha or RRF would also have those same claims
17 against Buddha or RRF, respectively, and those Cleaners who worked for WCV would also have
18 claims for expenses, deductions, and unfair competition against WCV:
19
VCS – all four claims
20
Buddha – 4 of 4 WCV – 3 of 4
21 claims claims
RRF – 4 of 4 claims
22

24 III. STATEMENT OF FACTS
25 A. VCS and the Regional Franchises Operate a Three-Tiered Commercial Cleaning
26 Business
VCS and the Regional Franchises collectively hold themselves out as a cleaning company
27
under the Vanguard brand. VCS’s promotional materials, which it creates for the Regional
28

PLAINTIFFS’ RENEWED NOTICE OF MOTION AND MOTION FOR CLASS CERTIFICATION 4
1 Franchises’ use, make clear that Vanguard’s business is providing commercial cleaning services.

2 (E.g., Ex. 4 (Lee Dep.) 255:6-256:3; Declaration of Daniel Brome Ex. 5 (Vanguard offers “High

3 Quality Commercial Cleaning for your Office”); Ex. 25 (“Vanguard Cleaning Systems franchised

4 commercial cleaning businesses have developed expertise in handling the janitorial cleaning

5 needs of” the automobile industry, distribution centers, muti-tenant buildings, office cleaning, and

6 places of worship); Ex. 6 (stating that “The Vanguard brand has stood at the forefront of green

7 office cleaning services for over a decade.”).) 6 Vanguard’s competitors are other cleaning or

8 janitorial services companies. (Ex. 2 (Gong Dep.) at 243:16–21 7; Ex. 3 (Dusthimer Dep.) at 61:1–

9 9, 83:24–84:20; Ex. 1 (Newman Dep.) at 222:15–23.) Likewise, Vanguard promotes its “service

10 standards,” which relate to performing commercial cleaning, not to selling franchises. (E.g., Ex. 1

11 (Newman Dep.) at 157:9–18; Ex. 2 (Gong Dep.) at 104:25–105:9; Ex. 4 (Lee Dep.) at 263:23-

12 265:7, Ex. 7 (advertising materials reflecting service standards).)

13 Further, as explained below, VCS’s and the Regional Franchises’ revenue “is directly

14 dependent on [the] commercial cleaning work [performed by . . .] unit franchisees.” DaCosta v.

15 Vanguard Cleaning Systems Inc., (Mass. Super. Sept. 29, 2017) 2017 WL 4817349 at *5. 8 As the

16 DaCosta court found, “Vanguard cannot reasonably maintain that commercial cleaning is not part

17 of its ordinary course of business to avoid classifying its workers as employees while

18 simultaneously touting that it is ‘a leader in the commercial cleaning industry.’” Id. at *6.

19 Although Vanguard offers cleaning services to its customers and derives its revenue from

20 commercial cleaning work, it does not directly employ Cleaners. VCS is at the top of a three-

21 tiered hierarchy; VCS sets the brand standards and creates form documents and standardized

22 policies that are passed down through its contractual arrangements with Regional Franchises. 9

23 The contracts between VCS and the Regional Franchises—the master franchise agreements—are

24 prepared by VCS and set out the terms of the relationships between VCS and the Regional

25 6
All subsequent exhibits to the Brome Declaration are referred to as “Ex. ___.”
7
26 Relevant excerpts of cited deposition transcripts are attached as Exhibits 1–4 to the accompanying
declaration of Daniel Brome.
27 8
The DaCosta order is attached to Plaintiffs’ accompanying request for judicial notice (“RJN”).
9
In the past, VCS has contracted directly with Cleaners (including Plaintiff Gonzalez), but it has
28 not done so since about 2013. (Ex. 4 (Lee Dep.) at 68:8–12, 329:25–331:17.)
PLAINTIFFS’ RENEWED NOTICE OF MOTION AND MOTION FOR CLASS CERTIFICATION 5
1 Franchises, including many identical material terms relevant to Vanguard’s right to control

2 Cleaners. (Ex. 3 (Dusthimer Dep.) at 59:6–18; Ex. 2 (Gong Dep.) 38:21–39:8; Ex. 1 (Newman

3 Dep.) at 39:10–41:1; see also Exs. 8–10 (Master Franchise Agreements).) The Regional

4 Franchises, in turn, contract with unit franchisees—Plaintiffs and proposed class member

5 Cleaners—to carry out the cleaning work through unit franchise agreements that are similarly

6 developed by VCS, are not subject to individualized negotiations with Cleaners, and control the

7 details of the work Cleaners perform.

8 1. Both VCS and the Regional Franchises Depend on Unit Franchisees to Perform
the Cleaning Work that is Central to Their Business System.
9
The only kind of businesses that VCS franchises are commercial cleaning businesses.
10
(Ex. 4 (Lee Dep.) at 29:18–24.) While VCS claims to be in the business of selling franchises, less
11
than two percent of VCS’s nationwide revenue, and none of its California revenue during the
12
covered period, came from regional franchise sales. (Id. at 96:20–97:14.) Instead, the vast
13
majority of VCS’s revenue is derived from royalties paid by Regional Franchises. (Id. at 112:25–
14
113:3; 306:7-309:19).
15
Regional Franchise royalties, in turn, are based on a percentage of their gross revenues,
16
which depend almost entirely on Cleaners’ commercial cleaning work. (Ex. 1 (Newman Dep.) at
17
129:21–130:22; Ex. 2 (Gong Dep.) at 239:5–18; Ex. 3 (Dusthimer Dep.) at 123:7–16.). Like VCS,
18
the Regional Franchises derive their revenue from unit franchisees performing cleaning services,
19
not from franchise sales. (Ex. 3 (Dusthimer Dep.) at 115:10–25 (revenue from franchise sales is
20
not “very significant to the business”); Ex. 2 (Gong Dep.) at 123:2–5 (big sources of Buddha’s
21
revenue depend on commercial cleaning services); Ex. 1 (Newman Dep.) at 132:18–21 (Wine
22
Country’s business depends on commercial cleaning services).). Like VCS, all three Defendant
23
Regional Franchises work only in commercial cleaning. (Ex. 1 (Newman Dep.) at 131:12–24
24
(“We don’t provide any other services.”); Ex. 3 (Dusthimer Dep.) at 35:24 – 36:4 (RRF only has
25
commercial cleaning franchises within the VCS system); Ex. 2 (Gong Dep.) at 42:12-15 (Buddha
26
only has janitorial franchises).) As WCV testified, it is “absolutely” correct that “Wine Country’s
27
business is dependent upon individuals who perform commercial cleaning services.” (Ex. 1
28

PLAINTIFFS’ RENEWED NOTICE OF MOTION AND MOTION FOR CLASS CERTIFICATION 6
1 (Newman Dep.) at 132:18–21.)

2 In sum, the only services provided by Vanguard are commercial cleaning services, and

3 almost all of Vanguard’s revenue—for both VCS and the Regional Franchises—comes from the

4 cleaning work performed by Cleaners.

5 2. VCS Designed and Directs The Model Under Which Cleaners Perform Work.
6 VCS is responsible for the nationwide Vanguard cleaning model. (Ex. 4 (Lee Dep.)
7 39:14-17; see also Exs. 8–10.) VCS describes the requirements of this model in the Master
8 Franchise Agreements the Regional Franchises sign. (Id.) As part of these agreements, VCS
9 requires Regional Franchises to “recruit and maintain [unit franchises] to operate Janitorial
10 Businesses and service the Janitorial Accounts generated by [the Regional Franchise].” (See Exs.
11 8-10 § 4.4.) VCS further requires Regional Franchises to “enter into a separate [franchise]
12 agreement between [the Regional Franchise] and [the unit franchise] upon [VCS’s] then-current
13 form.” (See Exs. 8-10 § 4.4.) Indeed, VCS sends these template forms to the Regional Franchises
14 each year, who “have no right to modify or offer to modify any [unit franchise] Agreement
15 without [VCS’s] prior written approval.” (Id. at § 4.6(c)). (See also Ex. 4 (Lee Dep.) 159:20-
16 162:5 (unit franchise agreement prototype created by VCS and sent to Regional franchises).)
17 Unsurprisingly, the Regional Franchises generally adopt VCS’s form franchise agreement. (Ex. 1
18 (Newman Dep.) at 140:3 – 21 (WCV has “always stuck with the VCS prototype”); Ex. 2 (Gong
19 Dep.) at 135:1–24; 182:14–21 (Buddha uses the VCS template with specific changes); Ex. 3
20 (Dusthimer Dep.) at 151:16-152:14 (RR uses template from VCS after customizing it); Ex. 4 (Lee
21 Dep.) 164:19-166:20; 169:5-169:23.)
22 VCS also creates the Subfranchisor Manual that the Regional Franchises are expected to
23 follow. (See Exs. 8-10 §§ 3.2, 4.7; see also Ex. 4 (Lee Dep.) 58:19-62:2.) This manual describes
24 the functions performed by the Regional Franchises with respect to the Cleaners, and it is
25 consistent for all of the Regional Franchises. The Subfranchisor Manual explains, among other
26 things, that Regional Franchises are to “procure sustainable Account Cleaning Services
27 Agreements with large and mid-sized businesses, organizations, healthcare networks and
28 schools;” “offer Vanguard Accounts to Unit Franchisees based on skill sets, geographies, growth

PLAINTIFFS’ RENEWED NOTICE OF MOTION AND MOTION FOR CLASS CERTIFICATION 7
1 goals;” and “provide billing and collections for Vanguard Accounts.” (Ex. 16 (2020 manual), at

2 VCS0000652.) The Subfranchisor Manual further describes Regional Franchises revenue streams

3 as “royalties,” “business support services fees,” “marketing fees and shared revenue arrangements

4 for additional accounts accepted by unit franchisees,” “sales of consumables to Vanguard

5 Accounts,” and “unit franchise sales.” (Id.)

6 VCS also creates manuals that it expects Regional Franchises to provide to Cleaners. (See

7 Exs. 8-10 §§ 3.2(b) (requiring Regional Franchises to “provide each [unit franchise] with one (1)

8 copy of the Operations Manual as provided in each [unit franchise] Agreement.”); see also Ex. 4

9 (Lee Dep.) at 68:23–70:1; 185:6-186:9; 187:22-189:11 (discussing 2016 and 2019 manuals that

10 VCS disseminated to the Masters to distribute to unit franchises).) These manuals reflect VCS’s

11 minimum standards and service requirements. (Ex. 4 (Lee Dep.) at 189:16-190:24 (Commercial

12 Cleaning Manual contains Vanguard Cleaning Systems Quality Standards, which are “core

13 services typically provided by a unit franchise.”) The Business Information Manual explains what

14 cleaning tasks should be performed each visit, each week, or each month. (Ex. 19 at

15 VCS0000297-98; Ex. 20 at VCS0000366–67.) The Commercial Cleaning Manual details what is

16 expected of Cleaners performing “Green Cleaning,” explains the “quadrant system” for cleaning

17 offices, and provides instructions about working with chemicals. (Exs. 21, 22.)

18 VCS requires Regional Franchises to “cause its [unit franchises] to conduct their

19 Janitorial Business in strict accordance with the Operations Manual and all other mandatory

20 operating procedures.” (See Exs. 8-10 § 4.10.) These manuals are direct from VCS, and n

Case Info

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Fineman, Nancy L. Track Judge’s New Case

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Document Filed Date

October 07, 2022

Case Filing Date

October 01, 2020

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Parties

AMAYA, JAIME Plaintiff
Bass, Ryne Plaintiff
BRENDER, VALERIE Attorney for the Plaintiff
BROME, DANIEL Attorney for the Plaintiff
BUDDHA CAPITAL CORPORATION Defendant
DOES 1 THROUGH 10, INCLUSIVE Defendant
GONZALEZ, PAULA Plaintiff
JAIME AMAYA, ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED Plaintiff
MAZARIEGOS, ALIDA Plaintiff
OTT, DAMON M Attorney for the Defendant
RIGGIN, JESSICA LEE Attorney for the Plaintiff
RR FRANCHISING, INC Defendant
Tello, Adriana Plaintiff
Tello, Georgina Plaintiff
VANGUARD CLEANING SYSTEMS, INC Defendant
VANGUARD CLEANING SYSTEMS OF THE CENTRAL VALLEY Defendant
WINE COUNTRY VENTURES, INC. Defendant
Matthew Helland Attorneys for Plaintiffs
Philip Baldwin Attorneys for Defendants
Michael Hood Attorneys for Defendants
Nicholas Kam Attorneys for Plaintiffs
Robert Geiger Attorneys for Defendants
Fraser McAlpine Attorneys for Defendants
Adam Truong Attorneys for Defendants
Ronald Arena Attorneys for Defendants
MATTHEW HELLAND Attorneys for Plaintiffs
Michael Moore Attorneys for Defendants
Lynsey Johnson Attorneys for Defendants
Paige Taylor Attorneys for Defendants
Lisa Xu Attorneys for Defendants
Sarah Boxer Attorneys for Defendants
Howard Strong Attorneys for Plaintiffs
Paige Bennett Attorneys for Plaintiffs
Richard Rahm Attorneys for Defendants
Benjamin Schnayerson Attorneys for Defendants
Olivia Florio Roberts Attorneys for Defendants
Paul Rissman Attorneys for Defendants
Adam Lunceford Attorneys for Defendants
Olivia Rosales Attorney
Brittany Berzin Attorney
Justin Rodriguez Attorney
Lindsey Haines Attorneys for Defendants
Ann Lee Attorney
Carleton Gray Attorney
Matthew Chang Attorney

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