Preview
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
Telephone: (415) 421-1800
5
Facsimile: (415) 421-1700
6 2/5/2021
MATTHEW HELLAND (SBN 250451)
7 helland@nka.com
DANIEL BROME (SBN 278915)
8 dbrome@nka.com
NICHOLS KASTER, LLP
9
235 Montgomery St., Suite 810
10 San Francisco, CA 94104
Telephone: (415) 277-7235
11 Facsimile: (415) 277-7238
12
Attorneys for Plaintiffs
13
14 SUPERIOR COURT OF THE STATE OF CALIFORNIA
15 COUNTY OF SAN MATEO
16
17 ALIDA MAZARIEGOS, PAULA Case No. 20-CIV-04267
GONZALEZ, and JAIME AMAYA
18 CLASS ACTION COMPLAINT FOR:
Plaintiffs, on behalf of themselves
19 and all others similarly situated, (1) FAILURE TO PROVIDE
REIMBURSEMENT FOR BUSINESS
20 v. EXPENSES (CALIFORNIA LABOR
21 CODE §§ 2802, 2810.3 AND IWC
WAGE ORDER 5);
VANGUARD CLEANING SYSTEMS,
22
INC.; RR FRANCHISING, INC., D/B/A
(2) UNLAWFUL WITHHOLDING AND
23 VANGUARD CLEANING SYSTEMS
RECEIPT OF EARNED WAGES
OF SOUTHERN CALIFORNIA AND
(CALIFORNIA LABOR CODE §§ 221,
24 D/B/A VANGUARD CLEANING
400-410, 450, 2810.3 AND IWC WAGE
SYSTEMS OF NORTHERN
25 ORDER NO. 5);
CALIFORNIA; BUDDHA CAPITAL
CORPORATION, D/B/A VANGUARD
26 (3) FAILURE TO PROVIDE MEAL
CLEANING SYSTEMS OF
PERIODS (CALIFORNIA LABOR
27 SACRAMENTO, D/B/A VANGUARD
CODE §§ 226.7, 512, 2810.3 AND IWC
CLEANING SYSTEMS OF THE
WAGE ORDER NO. 5);
28
Class Action Complaint for Damages
1
CENTRAL VALLEY, AND D/B/A (4) FAILURE TO AUTHORIZE AND
2 VANGUARD CLEANING SYSTEMS PERMIT REST PERIODS
OF THE CENTRAL COAST; AND (CALIFORNIA LABOR CODE §§
3 WINE COUNTRY VENTURES, INC. 226.7, 1194, 1194.2, 2810.3 AND IWC
D/B/A VANGUARD CLEANING WAGE ORDER NO. 5);
4
SYSTEMS OF THE NORTH BAY,
5 AND DOES 1 THROUGH 10, (5) FAILURE TO PAY CALIFORNIA
INCLUSIVE, OVERTIME COMPENSATION
6 (CALIFORNIA LABOR CODE §§ 510,
Defendants.
1194, 2810.3, AND IWC WAGE ORDER
7 NO. 5);
8
(6) FAILURE TO FURNISH ACCURATE
9 WAGE STATEMENTS (CALIFORNIA
LABOR CODE §§ 226, 1174 AND IWC
10 WAGE ORDER NO. 5);
11 (7) FAILURE TO PAY EARNED WAGES
UPON DISCHARGE – WAITING
12
TIME PENALTIES (CALIFORNIA
13 LABOR CODE §§ 201-03);
14 (8) VIOLATIONS OF THE UNFAIR
COMPETITION LAW (UCL)
15 (BUSINESS AND PROFESSIONS
16 CODE §§ 17200 ET SEQ.); and
17 (9) REPRESENTATIVE ACTION
PURSUANT TO PRIVATE
18 ATTORNEYS GENERAL ACT OF
2004 (CALIFORNIA LABOR CODE
19 §2698, ET SEQ.).
20
DEMAND FOR JURY TRIAL
21
22
23
24
25
26
27
28
Class Action Complaint for Damages
1 On behalf of themselves and all others similarly situated Plaintiffs ALIDA
2 MAZARIEGOS, PAULA GONZALEZ, and JAIME AMAYA (“Plaintiffs”) by their
3 undersigned attorneys, bring this action as a class action under the provisions of California Code
4 of Civil Procedure § 382 and as a representative action under the Private Attorneys General Act
5 (PAGA), California Labor Code § 2699 et seq., against Defendants Vanguard Cleaning Systems,
6 Inc., RR Franchising, Inc., d/b/a Vanguard Cleaning Systems of Southern California and d/b/a
7 Vanguard Cleaning Systems of Northern California (“RR Franchising”), Wine Country
8 Ventures, Inc. d/b/a Vanguard Cleaning Systems of the North Bay (“Wine Country”), and
9 Buddha Capital Corp., d/b/a Vanguard Cleaning Systems of Sacramento, d/b/a Vanguard
10 Cleaning Systems of the Central Valley, and d/b/a Vanguard Cleaning Systems of the Central
11 Coast (“Buddha Capital”) (collectively referred to as “Vanguard” and “Defendants”), and DOES
12 1-10 as follows:
13 INTRODUCTION
14 1. This is an action for relief from Defendants’ misclassification of their franchisee
15 cleaners (“Class Members” or “Cleaners”) as “independent contractors.”
16 2. Vanguard offers “high-quality, consistent commercial cleaning services”
17 throughout California. To carry out Vanguard’s business in California, Defendants engage
18 hundreds of people like Plaintiffs who are assigned to provide cleaning and janitorial services to
19 Defendants’ customers.
20 3. Vanguard treats Plaintiffs and Class Members as employees within the meaning
21 of California law and is liable for various Labor Code violations, as described below, as
22 Plaintiffs and Class Members are plainly employees within the meaning of California law, under
23 both the “ABC” test for employment status and the common law Borello standard. The ABC test
24 governs the employment status question with respect to wage order violations, including
25 Vanguard’s failure to pay minimum and overtime wages, failure to provide cleaners with meal
26 breaks and paid rest breaks, unlawful deductions from wages, and unreimbursed expenses. The
27 ABC test also governs claims for all Labor Code violations after January 1, 2020. See Cal. Labor
28 Code § 2750.3, repealed and replaced by Labor Code Section 2775 et. seq.
1
Class Action Complaint for Damages
1 4. By misclassifying Plaintiffs and similarly situated Cleaners as independent
2 contractors, Defendants have sought to avoid various duties and obligations owed to employees
3 under California’s Labor Code and Industrial Welfare Commission (“IWC”) wage orders,
4 including: (1) the duty to pay overtime compensation for hours worked in excess of eight hours
5 in a day or forty hours in a week and the duty to pay state minimum wage for all hours worked
6 (Cal. Labor Code §§ 510, 1194, 1194.2, 1194.5, 1197; IWC Wage Order No. 5, §§ 3-4); (2) the
7 duty to reimburse employees for all expenses and losses necessarily incurred in connection with
8 their employment (Cal. Labor Code § 2802 and IWC Wage Order 5; Wage Order No. 5, §§ 8-9);
9 (3) unlawful withholding and receipt of earned wages (Cal. Labor Code §§ 221, 400-410; IWC
10 Wage Order No. 5, §§ 8-9); (4) the duty to authorize and provide meal and rest periods (Cal.
11 Labor Code §§ 226.7, 512, 1194; IWC Wage Order No. 5, §§ 11-12); (5) the duty to furnish
12 accurate wage statements (Cal. Labor Code §§ 226, 1174; IWC Wage Order No. 5, § 7); (6) the
13 duty to pay an employee all wages owed upon termination (Cal. Labor Code §§ 201-203); (7)
14 the duty to pay wages twice during each calendar month (Cal. Labor Code § 204); (8) unlawful
15 coercing of employees to patronize their employer (Cal. Labor Code § 450); and (9) unlawfully
16 compelling employees to put up a cash bond as an investment (Cal. Labor Code §§ 400-410).
17 5. Plaintiffs challenge Defendants’ policy of willfully and unlawfully misclassifying
18 their Cleaners as “independent contractors” and thereby refusing to reimburse them for
19 employment-related expenses and losses, wrongfully collecting compensation from wages,
20 failing to provide off-duty meal periods, failing to authorize and permit rest paid periods, failing
21 to document actual hours worked on pay statements, failing to pay them overtime compensation,
22 failing to pay them state minimum wage, wrongfully coercing them to purchase necessary
23 services and items, and wrongfully coercing them to put up a cash bond in order to be able to
24 work.
25 6. Plaintiffs bring the above-stated claims pursuant to Code of Civil Procedure §
26 382 on behalf of the following class of Cleaners: all California owner-operator franchisee
27 cleaners who signed a franchise agreement with Vanguard Cleaning Systems, Inc., or any of its
28 master franchisors, and who personally performed cleaning work during the period commencing
2
Class Action Complaint for Damages
1 four years prior to April 6, 2020. 1
2 7. Plaintiffs will also amend their complaint upon exhaustion with the LWDA to
3 bring a claim under the PAGA for the above-described violations and other violations described
4 below.
5 JURISDICTION AND VENUE
6 8. This Court has jurisdiction over all causes of action asserted herein pursuant to
7 the California Constitution, Article VI, Section 10, which grants the Superior Court original
8 jurisdiction in all cases except those given to other trial courts. The Court also has jurisdiction
9 over certain causes of action pursuant to Business & Professions Code §§ 17203 and 17204,
10 which provide for exclusive jurisdiction for enforcement of this statute in any court of competent
11 jurisdiction.
12 9. The amount in controversy herein, excluding interest, costs, penalties, and
13 attorneys’ fees, exceeds the minimum jurisdictional limit of this court.
14 10. Venue in San Mateo is proper under Business & Professions Code § 17203 and
15 California Code of Civil Procedure § 395.5 because Defendants’ unlawful conduct occurred in
16 this county, Defendants conduct substantial business in this County, a substantial part of the
17 transactions at issue took place in this County, and Defendants’ liability arose in, in part, in this
18 County.
19 PARTIES
20 11. Plaintiff Alida Mazariegos resides in San Rafael, California. She began working
21 for Vanguard in approximately 2011. To work for Vanguard, Plaintiff Mazariegos entered into
22 Vanguard’s Unit Franchise Agreement. Plaintiff Mazariegos provided cleaning services for
23 Defendants’ accounts in Petaluma, Marin, and San Rafael. In order to meet Vanguard’s stringent
24 policies, procedures, and operational standards, Plaintiff Mazariegos has worked up to five hours
25 a day, three to five days a week. Plaintiff Mazariegos left her work with Vanguard around
26
1
Pursuant to Emergency Rule 9, the statute of limitations for civil causes of action was tolled
27 beginning April 6, 2020, due to the emergency related to COVID-19. That tolling ends on
October 1, 2020 for civil causes of action that exceed 180 days, which would encompass the
28 civil causes of action in this case.
3
Class Action Complaint for Damages
1 February of 2017.
2 12. Plaintiff Paula Gonzalez resides in La Puente, California. She began working for
3 Vanguard in approximately 2010. To work for Vanguard, Plaintiff Gonzalez entered into
4 Vanguard’s Unit Franchise Agreement. Plaintiff provided cleaning services for Defendants’
5 accounts in La Puente, Walnut, La Brea, Covina, Pico Rivera, Pomona, and other areas in the
6 Los Angeles area. In order to meet Vanguard’s stringent policies, procedures, and operational
7 standards, Plaintiff Gonzalez has worked up to 10 to 12 hours a day, six days a week. While
8 Plaintiff Gonzalez still has a contract with Vanguard, she stopped personally performing work
9 for them in December of 2019, when she was injured at work.
10 13. Plaintiff Jaime Amaya resides in Sacramento, California. He began working for
11 Vanguard in approximately 2003. To work for Vanguard, Plaintiff Amaya entered into
12 Vanguard’s Unit Franchise Agreement. Plaintiff provided cleaning services for Defendants’
13 accounts in Sacramento. To meet Vanguard’s stringent policies, procedures, and operational
14 standards, Plaintiff Amaya has worked up to nine or ten hours a day, five to six days a week.
15 Plaintiff Amaya still works for Vanguard.
16 14. Defendant Vanguard Cleaning Systems, Inc., is a California corporation with its
17 principal place of business in San Mateo, California. Vanguard contracts with “master
18 franchisors,” who in turn contract with “unit franchises” to provide cleaning services to its
19 customers across California. Vanguard provides the same standard contracts and training
20 materials to all its master franchisors and requires that master franchisors use these materials
21 with unit franchises (“Cleaners”). Vanguard is, and at all relevant times was, an employer subject
22 to California state wage-and-hour laws.
23 15. Defendant RR Franchising, Inc., d/b/a Vanguard Cleaning Systems of Southern
24 California and d/b/a Vanguard Cleaning Systems of Northern California is a California
25 corporation with its principal place of business in Buena Park, California. Defendant RR
26 Franchising, Inc., is a master franchisor serving various areas in Northern and Southern
27 California, including San Mateo County. Plaintiff Gonzalez has been listed as a unit franchisee
28 of RR Franchising, Inc. Upon information and belief, Plaintiff Gonzalez entered into a janitorial
4
Class Action Complaint for Damages
1 franchise agreement with Vanguard Cleaning Systems, Inc., which was later transferred to RR
2 Franchising, Inc. RR Franchising Inc. is, and at all relevant times was, an employer subject to
3 California state wage-and-hour laws.
4 16. Defendant Buddha Capital Corp., d/b/a Vanguard Cleaning Systems of
5 Sacramento, d/b/a Vanguard Cleaning Systems of the Central Valley, and d/b/a Vanguard
6 Cleaning Systems of the Central Coast is a California corporation with its principal place of
7 business in Lathrop, California. Defendant Buddha Capital Corp., is a master franchisor serving
8 various areas in the Central Valley and Sacramento areas. Plaintiff Amaya has been listed as a
9 unit franchisee of Defendant Buddha Capital Corporation. Plaintiff Amaya entered into a
10 janitorial franchise agreement with Vanguard Cleaning Systems, Inc., which later transferred its
11 contracts to Buddha Capital Corp. Buddha Capital Corp. is, and at all relevant times was, an
12 employer subject to California state wage-and-hour laws.
13 17. Defendant Wine Country Ventures, Inc. d/b/a Vanguard Cleaning Systems of the
14 North Bay is a California corporation with its principal place of business in San Rafael,
15 California. Defendant Wine Country Ventures, Inc., is a master franchisor serving the North Bay.
16 Plaintiff Mazariegos has been listed as a unit franchisee of Wine Country Ventures, Inc. Upon
17 information and belief, Plaintiff Mazariegos entered into a janitorial franchise agreement with
18 Wine Country Ventures, Inc., or another Vanguard entity, which later transferred its contracts to
19 Wine Country Ventures, Inc. Wine Country Ventures, Inc., is, and at all relevant times was, an
20 employer subject to California state wage-and-hour laws.
21 FACTUAL ALLEGATIONS
22 A. Cleaners Perform Work Within Vanguard’s Usual Course of Business And Are Not
Engaged in An Independent Trade, Occupation, or Business.
23
24 18. Vanguard provides janitorial services to commercial offices, car dealerships,
25 gyms, warehouses, and many other businesses throughout the United States, including in
26 California. On its website, Vanguard advertises its ability to provide customers with “high-
27 quality, consistent commercial cleaning services” and notes that it has provided “consistent
28 commercial cleaning services to over 18,000 satisfied customers throughout the U.S. and
5
Class Action Complaint for Damages
1 Canada.” 2 Its advertised commercial cleaning services include green cleaning, commercial floor
2 cleaning, cleaning for health, window washing, commercial pressure washing, among others. 3
3 19. To carry out its business in California, Vanguard engages hundreds of persons
4 like Plaintiffs, who provide cleaning services to Vanguard’s clients. Plaintiffs and Class
5 Members provide routine services to Vanguard customers.
6 20. Vanguard establishes the contracts with Plaintiffs’ and Class Members’ cleaning
7 accounts, decides which accounts to offer Cleaners, collects payment directly from these
8 accounts before paying Cleaners, makes deductions from Cleaners’ pay before compensating
9 them, and determines when Cleaners are ultimately paid. Vanguard also retains the right to
10 handle account complaints and remove accounts from Cleaners. And while Vanguard charges
11 Cleaners for the privilege of working these Vanguard accounts, Plaintiffs and Class Members
12 have no rights to these accounts. For example, after paying to work an account, Vanguard can
13 remove the account from Plaintiffs at its discretion and sell it to another Cleaner without
14 providing Plaintiffs any compensation.
15 21. Cleaners do not operate truly independent cleaning companies serving many
16 different clients. Instead, Vanguard restricts cleaners’ ability to solicit and perform independent
17 work. Vanguard requires Plaintiffs to agree to a covenant not to compete, prohibiting them from
18 soliciting janitorial business from accounts that are already doing business with Vanguard. It
19 further prohibits cleaners from bidding against Vanguard for any account. For two years after the
20 term of the franchise agreement, cleaners are prohibited from soliciting any account for which
21 Cleaners have performed work while at Vanguard.
22 22. Vanguard further reserves for itself the right to transfer or assign all of its rights
23 under the franchise agreement, but Plaintiffs cannot transfer or assign their rights without
24 Vanguard’s prior written consent, as Vanguard views the rights under the franchise agreement as
25
26 2
Vanguard Cleaning Systems, Inc., “Upgrade to Vanguard Janitorial Services,” located at
https://www.vanguardcleaning.com (last accessed September 18, 2020).
27 3
Vanguard Cleaning Systems, Inc., “Commercial Cleaning Services,” located at
28 https://www.vanguardcleaning.com/commercial-cleaning-services/ (last accessed June 11, 2020).
6
Class Action Complaint for Damages
1 “personal.”
2 23. Cleaners enter into a 10-year agreement with Vanguard, which is subject to
3 renewal. However, upon renewal, Vanguard retains the right to require Cleaners to sign its most
4 recent agreement, which may be materially different from Cleaners’ prior agreement. Vanguard
5 also requires, as a term of renewal, for Cleaners to sign a general release of any claims against
6 Vanguard.
7 24. Plaintiffs and Class Members’ work for Vanguard does not require any special
8 skill and is performed under the training, supervision, and instruction of Vanguard management.
9 B. Vanguard Required Cleaners To Sign Form Agreements That Give Vanguard All
Necessary Control Over the Manner and Means by Which Plaintiffs Performs Their
10 Work.
11 25. As part of their work for Vanguard, Plaintiffs and Class Members were required
12 to enter into Vanguard’s form franchise agreement. These agreements and related policy
13 documents dictate in detail how Cleaners are required to perform their work.
14 26. Vanguard requires Plaintiffs and Class Members to work according to Vanguard
15 specifications, standards, policies, and procedures, including those published in its
16 volumes/manuals on various subjects (“Manuals”). Vanguard retains the right to make additions,
17 deletions or modifications to its Manuals at any time, and cleaners are responsible for being
18 aware of these changes and implementing them. For example, the Manuals inform Cleaners
19 about chemical safety, green cleaning processes (including proper chemical usage, attention to
20 building entryways, effective vacuuming and dusting, and safeguarding indoor air quality), and
21 the quadrant system method for cleaning.
22 27. Vanguard also requires Cleaners to comply with the contracts that Vanguard
23 negotiates with Cleaners’ accounts. These contracts, which govern the work that Plaintiffs and
24 Class Members perform, dictate:
25 a. The days and times that Cleaners will perform cleaning work;
26 b. The tasks that Cleaners perform. For example, they specify whether Cleaners
27 are to dust and clean all fixtures and office furniture, empty wastepaper
28 receptacles and replace liners, wash internal and entrance class windows,
7
Class Action Complaint for Damages
1 dust/remove cobwebs from all ceilings, clean window sills, vacuum carpeted
2 areas, clean restroom mirrors and glass, among many other detailed
3 instructions;
4 c. The amount that the account will be charged;
5 d. The days on which Vanguard will bill the account;
6 e. The term limits of the contract;
7 f. Whether Vanguard or the account will provide certain cleaning supplies. For
8 example, one account serviced by Plaintiff Gonzalez required her to provide
9 all cleaning supplies except for toiletries, liners, and paper supplies, which
10 Vanguard stated the account could purchase through Vanguard.
11 28. Vanguard requires Cleaners to provide accounts with those services that
12 Vanguard has approved and require Cleaners to obtain Vanguard’s approval before providing
13 any other services to the account.
14 29. Vanguard may provide equipment and supplies, such as mops, brooms, floor
15 signs, toilet brushes, All Purpose Cleaner, among other supplies, when Cleaners begin their work
16 for the company; however, Vanguard thereafter requires that Cleaners supply the supplies,
17 materials, and equipment that each Vanguard account requires pursuant to the contracts that
18 Vanguard has entered into with these accounts. Vanguard retains the right to modify its
19 specifications and requirements for supplies and equipment.
20 30. Cleaners must purchase the types and amounts of insurance that Vanguard
21 requires and name Vanguard as an additional insured.
22 31. Vanguard retains the right to perform a background check on Cleaners or anyone
23 else employed by Cleaners.
24 32. Vanguard retains broad termination rights under its agreements with Cleaners,
25 including, among many others, the right to terminate for providing unapproved services to
26 accounts, for failure to service customer accounts as scheduled, and failure to comply with
27 mandatory provisions in the Manuals.
28 33. Vanguard classifies Plaintiffs and Class Members as “independent contractors,” a
8
Class Action Complaint for Damages
1 designation that it made voluntarily and knowingly as a subterfuge to circumvent the
2 requirements of the California Labor Code.
3 C. Vanguard Cleaning Systems, Inc., is liable for the violations against Plaintiffs and
all other aggrieved California Cleaners.
4
5 34. Vanguard Cleaning Systems, Inc. (referred to as “VCS”) designed and
6 implemented the contractual framework under which Plaintiffs and Class Members were
7 misclassified.
8 35. Plaintiffs and other Class Members purchased “janitorial franchises” from a
9 regional “master franchisor,” which in Plaintiff Gonzalez’s case was RR Franchising, Inc., d/b/a
10 Vanguard Cleaning Systems of Northern California, and d/b/a Vanguard Cleaning Systems of
11 Southern California; in Plaintiff Amaya’s case was Buddha Capital Corp., d/b/a Vanguard
12 Cleaning Systems of Sacramento, d/b/a Vanguard Cleaning Systems of the Central Valley, and
13 d/b/a Vanguard Cleaning Systems of the Central Coast; and in Plaintiff Mazariegos’s case was
14 Wine Country Ventures, Inc., d/b/a Vanguard Cleaning Systems of the North Bay.
15 36. Plaintiffs seek to recover damages and penalties against VCS on behalf of all
16 Class Members, regardless of their “master franchisor” entity.
17 37. Master franchisors are required to use their best efforts to actively recruit and
18 maintain unit franchises, like Plaintiffs and Class Members. VCS requires master franchisors to
19 solicit, generate, and maintain sufficient janitorial accounts in their area and sets a minimum
20 monthly account volume for master franchisors.
21 38. VCS requires master franchisors to investigate the qualifications of each unit
22 franchise pursuant to VCS’s standards, policies and procedures and requires the master
23 franchisor to provide VCS with any documentation and information relating to the unit
24 franchises that it requires.
25 39. VCS requires master franchisors to adapt its form franchise disclosure document,
26 and it further requires the master franchisor to enter into an agreement with the unit franchise
27 upon VCS’s then-current unit franchise form. VCS prohibits master franchisors from modifying
28 or offering to modify these agreements without VCS’s prior written approval.
9
Class Action Complaint for Damages
1 40. VCS requires master franchisors to provide initial training to unit franchises and
2 make available billing and collections of accounts according to VCS’s specifications.
3 41. VCS provides master franchisors with a copy of its Manuals and requires that
4 master franchisors provide these Manuals to unit franchisees, like Plaintiffs and Class Members.
5 VCS further requires master franchisors to ensure that unit franchises will perform their work in
6 accordance with the Manuals, the unit franchise agreement, and all other mandatory operating
7 procedures. VCS also requires master franchisors to comply with the terms of the Subfranchisor
8 Manual that it provides master franchisors.
9 42. Master franchisors are obligated to pay VCS up to 5% of the revenues which they
10 collect from Cleaners’ customers for their cleaning services, which include revenue received
11 from the sale of unit franchises to Cleaners, revenue from the accounts serviced by Cleaners, and
12 any other revenue received from the Vanguard system.
13 43. VCS prohibits master franchisors from permitting unit franchises to contract
14 directly with any customer. Instead, VCS requires that all accounts contract with the master
15 franchisor, and VCS reserves the right to require the master franchisor to use required forms and
16 mandatory language for customer contracts and invoices.
17 44. In a similar case against VCS in Massachusetts, the trial court found that
18 Vanguard could not satisfy two of the three prongs of the ABC test. 4
19 45. That court also found that VCS was liable for violations against aggrieved
20 cleaners because “Vanguard's revenue is derived from initial franchise fees, [some] percent of
21 the gross billings from work performed by unit franchisees, and various fees imposed on unit
22 franchisees. Vanguard's revenue, therefore, is directly dependent on commercial cleaning work
23 of the plaintiffs and other [cleaners].” 5
24 46. VCS’s business ultimately depends on someone performing the cleaning, which
25 in this case is janitorial franchise Cleaners. It relies on these Cleaners to continuously perform
26
4
Da Costa v. Vanguard Cleaning Systems, Inc. (Mass. Super., Sept. 29, 2017) 34 Mass.L.Rptr.
27 483.
28 5
Id.
10
Class Action Complaint for Damages
1 cleaning services.
2 47. VCS is directly liable for the violations described herein. See Vazquez v. Jan-Pro
3 Franchising International, Inc. (9th Cir. 2019) 923 F3d 575, 598, reh’g granted, opinion
4 withdrawn (9th Cir. 2019) 930 F.3d 1107, and on reh’g (9th Cir. 2019) 939 F.3d 1045, and
5 opinion reinstated in part on reh’g (9th Cir. 2019) 939 F.3d 1050 (finding that in a three-tiered
6 cleaning franchise model, the top-tier franchise could be held liable as an employer under the
7 ABC test even though it was not a party to any of the contracts with the alleged employees).
8 VCS is also liable to Plaintiffs and Class Members under Labor Code § 2810.3 as a “client
9 employer” who “obtains or is provided workers to perform labor within its usual course of
10 business from a labor contractor” – here, master franchisors like RR Franchising, Buddha
11 Capital, and Wine Country Ventures, Inc.
12 CLASS ACTION ALLEGATIONS
13 48. Plaintiffs bring this action individually and as a class action on behalf of a class
14 defined as follows: all California owner-operator franchisee cleaners who signed a franchise
15 agreement with Vanguard Cleaning Systems, Inc., or any of its master franchisors, and who
16 personally performed cleaning work during the period commencing four years prior to April 6,
17 2020 (individually referred to as “Class Members” and collectively as the “Class”).
18 49. This action is brought, and may properly be maintained, as a class action pursuant
19 to California Code of Civil Procedure § 382 because there is a well-defined community of
20 interest in the litigation and the proposed class is easily ascertainable. This action presents
21 questions of common interest and satisfies the numerosity, commonality, typicality, adequacy,
22 predominance, and superiority requirements of this provision.
23 Numerosity:
24 50. The size of the proposed Class makes individual joinder of all members
25 impracticable. While Plaintiffs do not presently know the exact number of Class Members,
26 Plaintiffs are informed an believe, and thereon allege, that as many as 700 persons have been
27 subjected to the unlawful practices alleged herein during the class period.
28
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Class Action Complaint for Damages
1 Commonality:
2 51. Common questions of law and fact exist as to all members of the Class and
3 predominate over any questions that affect only individual members of the Class. These common
4 questions of law and fact include, without limitation:
5 a. Whether Defendants have retained sufficient rights to control Class Members’
6 work so as to render the Class Members employees under California law;
7 b. Whether Cleaners are free from Defendants’ control and direction in
8 connection with the performance of their work, both under Defendants’
9 contract and in fact;
10 c. Whether Cleaners perform work that is outside the usual course of
11 Defendants’ business;
12 d. Whether Cleaners are customarily engaged in an independently established
13 trade, occupation, or business;
14 e. Whether Class Members have incurred employment-related expenses and
15 losses in carrying out their duties for Defendants;
16 f. Whether Defendants have failed to indemnify Class Members for their
17 necessary employment-related expenses and losses in violation of California
18 Labor Code § 2802 and IWC Wage Order No. 5;
19 g. Whether Defendants’ collection and deduction of fees and requiring a cash
20 bond violated California Labor Code §§ 221, 400-410, and IWC Wage Order
21 No. 5;
22 h. Whether Defendants have violated California Labor Code § 1174 and IWC
23 Wage Order No. 5 by failing to maintain documentation of actual hours that
24 Class Members worked each day;
25 i. Whether Defendants knew or should have known that Class Members
26 regularly worked for over 40 hours per week and/or eight hours per day;
27 j. Whether Defendants failed to pay Class Members overtime wages for time
28 worked in excess of 40 hours per week or eight hours per day;
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Class Action Complaint for Damages
1 k. Whether Defendants failed to provide Class Members with adequate off-duty
2 meal periods and compensation for missed meal periods in violation of
3 California Labor Code §§ 226.7 and 512 and IWC Wage Order No. 5;
4 l. Whether Defendants have failed to provide Class Members with adequate rest
5 periods and failed to separately compensate Class Members for each hour
6 worked in violation of California Labor Code §§ 226.7, 1194, and IWC Wage
7 Order No. 5;
8 m. Whether Defendants had a policy or practice of not paying meal and rest
9 period premiums when meal and rest periods were not provided;
10 n. Whether Defendants have violated California Labor Code §§ 201-203 by
11 failing, upon termination, to timely pay Class Members wages that were due
12 for overtime and missed meal periods;
13 o. Whether Defendants’ misclassification of Class Members was willful and in
14 violation of California Labor Code § 226.8;
15 p. Whether Defendants, in violation of California Labor Code § 226 failed to
16 provide accurate, itemized wage statements reflecting, among other items,
17 Class Members’ hours of work and rates of pay;
18 q. Whether Defendants’ failures to: (a) indemnify and reimburse Class Members
19 for necessary employment-related expenses, (b) pay Class Members for all
20 hours worked; (c) pay Class Members overtime compensation; (d) provide
21 Class Members with adequate off-duty meal periods and meal period
22 compensation; (e) provide Class Members with rest periods, separately
23 compensated Class Members for rest periods, and provide compensation for
24 missed rest periods; (f) provide Class Members with accurate itemized wage
25 statements; (g) maintain documentation of the actual hours worked each day;
26 and (h) timely pay Class Members all wages that were due upon termination,
27 along with Defendants’ collection and deduction of fees and expenses from
28 Class Members’ compensation and their misclassification of Class Members
13
Class Action Complaint for Damages
1 as independent contractors, and their charging fees and/or making deductions
2 from Plaintiffs’ and Class Members’ compensation constitute unlawful,
3 unfair, and/or fraudulent business practices under Cal. Business & Professions
4 Code § 17200, et seq.;
5 r. What amounts Plaintiffs and Class Members are entitled to receive in interest
6 on unpaid compensation due and owed to them.
7 Typicality:
8 52. Plaintiffs’ claims are typical of the claims of the Class. Plaintiffs and Class
9 Members sustained injuries and damages arising out of and caused by Defendants’ common
10 course of conduct in violation of law as alleged herein.
11 Adequacy of Representation:
12 53. Plaintiffs are adequate representatives of the Class in that their claims are typical
13 of those of the Class. Plaintiffs have the same interests in the litigation of this case as the Class
14 Members; they are committed to vigorous prosecution of this case and have retained competent
15 counsel experienced in class action and wage and hour litigation of this nature. Plaintiffs are not
16 subject to any individual defenses unique from those conceivably applicable to the Class as a
17 whole and anticipate no management difficulties in this litigation.
18 Predominance:
19 54. Defendants have engaged in a common course of wage-and-hour abuse toward
20 Plaintiffs and Class Members. The common issues arising from this conduct that affect Plaintiffs
21 and Class Members predominate over any individual issues. Adjudication of these common
22 issues in a single action has important and desirable advantages of judicial economy.
23 Superiority of Class Action:
24 55. A class action is superior to other available methods for the fair and efficient
25 adjudication of this controversy because individual litigation of the claims of all Cass Members
26 is impracticable. It would be unduly burdensome to the courts in which individual litigation of
27 numerous cases would proceed. Individualized litigation would also present the potential for
28 varying, inconsistent, or contradictory judgments and would magnify the delay and expense to
14
Class Action Complaint for Damages
1 all parties and to the court system resulting from multiple trials of the same complex factual
2 issues. Moreover, individual actions by Class Members may establish inconsistent standards of
3 conduct for Defendants. By contrast, the conduct of this action as a class action, with respect to
4 some or all of the issues presented herein, presents fewer management difficulties, conserves the
5 resources of the parties and the court system, and protects the rights of each Class Member.
6 56. Defendants have acted or refused to act in respects generally applicable to the
7 class, thereby making appropriate relief with regard to the members of the Class as a whole, as
8 requested herein.
9 FIRST CAUSE OF ACTION
FAILURE TO PROVIDE REIMBURSEMENT FOR BUSINESS EXPENSES
10 (CALIFORNIA LABOR CODE §§ 2802, 2810.3 AND IWC WAGE ORDER 5, §§ 8-9)
(ON BEHALF OF PLAINTIFFS AND CLASS MEMBERS)
11
12 57. The allegations of each of the preceding paragraphs are re-alleged and
13 incorporated herein by reference, and Plaintiffs allege as follows a claim of relief on behalf of
14 themselves and all Class Members.
15 58. While acting on the instructions of Defendants and discharging their duties for
16 them, Plaintiffs and Class Members have incurred and paid work-related expenses. Such
17 expenses include, but are not limited to, cleaning supplies, cleaning equipment, mandatory
18 insurance, gas and vehicle maintenance, and other necessary expenses. Plaintiffs and Class
19 Members were also required to pay thousands of dollars in franchise fees and business support
20 and service fees to perform their work.
21 59. Defendants failed to indemnify or in any manner reimburse Plaintiffs and Class
22 Members for these expenditures and losses even though these necessary expenditures were
23 incurred as a direct consequence of their work requirements, either as a de facto cost (e.g. gas
24 and cleaning supplies) or a requirement of the agreements Defendants force cleaners to accept as
25 a condition of employment.
26 60. California Labor Code § 2810.3, effective January 1, 2015, states that “A client
27 employer shall share with a labor contractor all civil legal responsibility and civil liability for all
28 workers supplied by that labor contractor for…the payment of wages.”
15
Class Action Complaint for Damages
1 61. A “labor contractor” is defined as “an individual or entity that supplies, either with or
2 without a contract, a client employer with workers to perform labor within the client employer's usual
3 course of business.”
4 62. “Client employer” is defined as “a business entity, regardless of its form, that obtains
5 or is provided workers to perform labor within its usual course of business from a labor contractor.”
6 63. Defendants RR Franchising, Inc., Wine Country Ventures, Inc., and Buddha Capital
7 Corp. served as labor contractors under § 2810.3 by providing workers to provide cleaning services,
8 which is part of the usual course of business for Vanguard Cleaning Systems, Inc. As a result,
9 Defendant Vanguard Cleaning Systems, Inc. was a client employer within the definition of Labor
10 Code § 2810.3.
11 64. In addition to being liable as an employer, Vanguard Cleaning Systems, Inc. is
12 also liable to Plaintiffs as a client employer for the violations detailed herein under Labor Code §
13 2810.3.
14 65. Defendants have violated and continue to violate California Labor Code § 2802
15 and IWC Wage Order 5, §§ 8-9. As a direct and proximate result of Defendants’ conduct,
16 Plaintiffs and Class Members have suffered substantial losses according to proof, as well as pre-
17 judgment interest, costs, penalties, and attorneys’ fees for the prosecution of this action, as
18 described below.
SECOND CAUSE OF ACTION
19 UNLAWFUL WITHHOLDING AND RECEIPT OF EARNED WAGES
20 (CALIFORNIA LABOR CODE §§ 221, 400-410, 450, 2810.3 AND IWC WAGE ORDER
NO. 5, §§ 8-9)
21 (ON BEHALF OF PLAINTIFFS AND CLASS MEMBERS)
22 66. The allegations of each of the preceding paragraphs are re-alleged and
23 incorporated herein by reference, and Plaintiffs allege as follows a claim of relief on behalf of
24 themselves and all Class Members.
25 67. Labor Code § 221 provides: “It shall be unlawful for any employer to collect or
26 receive from an employee any part of wages theretofore paid by said employer to said
27 employee.”
28 68. Labor Code § 223 provides: “Where any statute or contract requires an employer
16
Class Action Complaint for Damages
1 to maintain the designated wage scale, it shall be unlawful to secretly pay a lower wage while
2 purporting to pay the wage designated by statute or by contract.”
3 69. Labor Code §§ 400-410 (“Employee Bond Law”) provide the limited
4 circumstances under which an employer can exact a cash bond from its employees. These
5 provisions are designed to protect employees against the very real danger of an employer taking
6 or misappropriating employee funds held by the employer in trust.
7 70. Labor Code § 450 states “No employer, or agent or officer thereof, or other
8 person, may compel or coerce any employee, or applicant for employment, to patronize his or
9 her employer, or any other person, in the purchase of any thing of value.”
10 71. IWC Wage Order No. 5, § 8 provides that the only circumstance under which an
11 employer can make a deduction from an employee’s wage for cash shortage, breakage, or loss of
12 equipment is if the employer can show that the shortage, breakage, or loss was the result of the
13 employee’s gross negligence or dishonest or willful act.
14 72. IWC Wage Order No. 5, § 9 provides that when tools or equipment are required
15 by the employer or are necessary to the performance of a job, such tools and equipment shall be
16 provided and maintained by the employer
17 73. These and related statutes, along with California’s fundamental public policy
18 protecting wages and wage scales, prohibit employers from subjecting employees to
19 unanticipated or unpredicted reductions in their wages; making employees the insurers of their
20 employer’s business losses; otherwise passing the ordinary business losses of the employer onto
21 the employee; taking deductions from wages for business losses unless the employer can
22 establish that the loss was caused by a dishonest or willful act, or gross negligence of the
23 employee; or taking other unpredictable deductions that may impose a special hardship on
24 employees.
25 74. Defendants have violated Cal. Labor Code §§ 221, 223, 400-410, 450 and IWC
26 wage order No. 5, §§ 8-9 by unlawfully taking deductions from Plaintiffs’ and Class Members’
27 compensation to cover certain ordinary business expenses of Defendants, including but not
28 limited to franchise fees, fees for new accounts, business support and service fees, insurance, and
17
Class Action Complaint for Damages
1 a number of other fees.
2 75. In addition to being liable as an employer, Vanguard Cleaning Systems, Inc. is
3 also liable to Plaintiffs as a client employer for the violations detailed herein under Labor Code §
4 2810.3.
5 76. Because Defendants took unlawful deductions from Plaintiffs’ and Class
6 Members’ compensation, they are liable to Plaintiffs for the compensation that should have been
7 paid but for the unlawful deductions, pursuant to Cal. Labor Code §§ 221, 223, 400-410, 450 and
8 IWC Wage Order No. 5, §§ 8-9.
9 77. By unlawfully deducting wages and failing to pay Plaintiffs and Class Members,
10 Defendants are also liable for penalties, reasonable attorneys’ fees, and costs as described below.
11 THIRD CAUSE OF ACTION
FAILURE TO PROVIDE MEAL PERIODS
12 (CALIFORNIA LABOR CODE §§ 226.7, 512, 2810.3 AND IWC WAGE ORDER NO. 5, § 11)
(ON BEHALF OF PLAINTIFFS AND CLASS MEMBERS)
13
14 78. The allegations of each of the preceding paragraphs are re-alleged and
15 incorporated herein by reference, and Plaintiffs allege as follows a claim of relief on behalf of
16 themselves and all Class Members.
17 79. Labor Code § 226.7 states in pertinent part: “An employer shall not require an
18 employee to work during a meal or rest or recovery period mandated pursuant to an applicable
19 statute, or applicable regulation, standard, or
Preview
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 Telephone: (415) 421-1800 5 Facsimile: (415) 421-1700 6 2/5/2021 MATTHEW HELLAND (SBN 250451) 7 helland@nka.com DANIEL BROME (SBN 278915) 8 dbrome@nka.com NICHOLS KASTER, LLP 9 235 Montgomery St., Suite 810 10 San Francisco, CA 94104 Telephone: (415) 277-7235 11 Facsimile: (415) 277-7238 12 Attorneys for Plaintiffs 13 14 SUPERIOR COURT OF THE STATE OF CALIFORNIA 15 COUNTY OF SAN MATEO 16 17 ALIDA MAZARIEGOS, PAULA Case No. 20-CIV-04267 GONZALEZ, and JAIME AMAYA 18 CLASS ACTION COMPLAINT FOR: Plaintiffs, on behalf of themselves 19 and all others similarly situated, (1) FAILURE TO PROVIDE REIMBURSEMENT FOR BUSINESS 20 v. EXPENSES (CALIFORNIA LABOR 21 CODE §§ 2802, 2810.3 AND IWC WAGE ORDER 5); VANGUARD CLEANING SYSTEMS, 22 INC.; RR FRANCHISING, INC., D/B/A (2) UNLAWFUL WITHHOLDING AND 23 VANGUARD CLEANING SYSTEMS RECEIPT OF EARNED WAGES OF SOUTHERN CALIFORNIA AND (CALIFORNIA LABOR CODE §§ 221, 24 D/B/A VANGUARD CLEANING 400-410, 450, 2810.3 AND IWC WAGE SYSTEMS OF NORTHERN 25 ORDER NO. 5); CALIFORNIA; BUDDHA CAPITAL CORPORATION, D/B/A VANGUARD 26 (3) FAILURE TO PROVIDE MEAL CLEANING SYSTEMS OF PERIODS (CALIFORNIA LABOR 27 SACRAMENTO, D/B/A VANGUARD CODE §§ 226.7, 512, 2810.3 AND IWC CLEANING SYSTEMS OF THE WAGE ORDER NO. 5); 28 Class Action Complaint for Damages 1 CENTRAL VALLEY, AND D/B/A (4) FAILURE TO AUTHORIZE AND 2 VANGUARD CLEANING SYSTEMS PERMIT REST PERIODS OF THE CENTRAL COAST; AND (CALIFORNIA LABOR CODE §§ 3 WINE COUNTRY VENTURES, INC. 226.7, 1194, 1194.2, 2810.3 AND IWC D/B/A VANGUARD CLEANING WAGE ORDER NO. 5); 4 SYSTEMS OF THE NORTH BAY, 5 AND DOES 1 THROUGH 10, (5) FAILURE TO PAY CALIFORNIA INCLUSIVE, OVERTIME COMPENSATION 6 (CALIFORNIA LABOR CODE §§ 510, Defendants. 1194, 2810.3, AND IWC WAGE ORDER 7 NO. 5); 8 (6) FAILURE TO FURNISH ACCURATE 9 WAGE STATEMENTS (CALIFORNIA LABOR CODE §§ 226, 1174 AND IWC 10 WAGE ORDER NO. 5); 11 (7) FAILURE TO PAY EARNED WAGES UPON DISCHARGE – WAITING 12 TIME PENALTIES (CALIFORNIA 13 LABOR CODE §§ 201-03); 14 (8) VIOLATIONS OF THE UNFAIR COMPETITION LAW (UCL) 15 (BUSINESS AND PROFESSIONS 16 CODE §§ 17200 ET SEQ.); and 17 (9) REPRESENTATIVE ACTION PURSUANT TO PRIVATE 18 ATTORNEYS GENERAL ACT OF 2004 (CALIFORNIA LABOR CODE 19 §2698, ET SEQ.). 20 DEMAND FOR JURY TRIAL 21 22 23 24 25 26 27 28 Class Action Complaint for Damages 1 On behalf of themselves and all others similarly situated Plaintiffs ALIDA 2 MAZARIEGOS, PAULA GONZALEZ, and JAIME AMAYA (“Plaintiffs”) by their 3 undersigned attorneys, bring this action as a class action under the provisions of California Code 4 of Civil Procedure § 382 and as a representative action under the Private Attorneys General Act 5 (PAGA), California Labor Code § 2699 et seq., against Defendants Vanguard Cleaning Systems, 6 Inc., RR Franchising, Inc., d/b/a Vanguard Cleaning Systems of Southern California and d/b/a 7 Vanguard Cleaning Systems of Northern California (“RR Franchising”), Wine Country 8 Ventures, Inc. d/b/a Vanguard Cleaning Systems of the North Bay (“Wine Country”), and 9 Buddha Capital Corp., d/b/a Vanguard Cleaning Systems of Sacramento, d/b/a Vanguard 10 Cleaning Systems of the Central Valley, and d/b/a Vanguard Cleaning Systems of the Central 11 Coast (“Buddha Capital”) (collectively referred to as “Vanguard” and “Defendants”), and DOES 12 1-10 as follows: 13 INTRODUCTION 14 1. This is an action for relief from Defendants’ misclassification of their franchisee 15 cleaners (“Class Members” or “Cleaners”) as “independent contractors.” 16 2. Vanguard offers “high-quality, consistent commercial cleaning services” 17 throughout California. To carry out Vanguard’s business in California, Defendants engage 18 hundreds of people like Plaintiffs who are assigned to provide cleaning and janitorial services to 19 Defendants’ customers. 20 3. Vanguard treats Plaintiffs and Class Members as employees within the meaning 21 of California law and is liable for various Labor Code violations, as described below, as 22 Plaintiffs and Class Members are plainly employees within the meaning of California law, under 23 both the “ABC” test for employment status and the common law Borello standard. The ABC test 24 governs the employment status question with respect to wage order violations, including 25 Vanguard’s failure to pay minimum and overtime wages, failure to provide cleaners with meal 26 breaks and paid rest breaks, unlawful deductions from wages, and unreimbursed expenses. The 27 ABC test also governs claims for all Labor Code violations after January 1, 2020. See Cal. Labor 28 Code § 2750.3, repealed and replaced by Labor Code Section 2775 et. seq. 1 Class Action Complaint for Damages 1 4. By misclassifying Plaintiffs and similarly situated Cleaners as independent 2 contractors, Defendants have sought to avoid various duties and obligations owed to employees 3 under California’s Labor Code and Industrial Welfare Commission (“IWC”) wage orders, 4 including: (1) the duty to pay overtime compensation for hours worked in excess of eight hours 5 in a day or forty hours in a week and the duty to pay state minimum wage for all hours worked 6 (Cal. Labor Code §§ 510, 1194, 1194.2, 1194.5, 1197; IWC Wage Order No. 5, §§ 3-4); (2) the 7 duty to reimburse employees for all expenses and losses necessarily incurred in connection with 8 their employment (Cal. Labor Code § 2802 and IWC Wage Order 5; Wage Order No. 5, §§ 8-9); 9 (3) unlawful withholding and receipt of earned wages (Cal. Labor Code §§ 221, 400-410; IWC 10 Wage Order No. 5, §§ 8-9); (4) the duty to authorize and provide meal and rest periods (Cal. 11 Labor Code §§ 226.7, 512, 1194; IWC Wage Order No. 5, §§ 11-12); (5) the duty to furnish 12 accurate wage statements (Cal. Labor Code §§ 226, 1174; IWC Wage Order No. 5, § 7); (6) the 13 duty to pay an employee all wages owed upon termination (Cal. Labor Code §§ 201-203); (7) 14 the duty to pay wages twice during each calendar month (Cal. Labor Code § 204); (8) unlawful 15 coercing of employees to patronize their employer (Cal. Labor Code § 450); and (9) unlawfully 16 compelling employees to put up a cash bond as an investment (Cal. Labor Code §§ 400-410). 17 5. Plaintiffs challenge Defendants’ policy of willfully and unlawfully misclassifying 18 their Cleaners as “independent contractors” and thereby refusing to reimburse them for 19 employment-related expenses and losses, wrongfully collecting compensation from wages, 20 failing to provide off-duty meal periods, failing to authorize and permit rest paid periods, failing 21 to document actual hours worked on pay statements, failing to pay them overtime compensation, 22 failing to pay them state minimum wage, wrongfully coercing them to purchase necessary 23 services and items, and wrongfully coercing them to put up a cash bond in order to be able to 24 work. 25 6. Plaintiffs bring the above-stated claims pursuant to Code of Civil Procedure § 26 382 on behalf of the following class of Cleaners: all California owner-operator franchisee 27 cleaners who signed a franchise agreement with Vanguard Cleaning Systems, Inc., or any of its 28 master franchisors, and who personally performed cleaning work during the period commencing 2 Class Action Complaint for Damages 1 four years prior to April 6, 2020. 1 2 7. Plaintiffs will also amend their complaint upon exhaustion with the LWDA to 3 bring a claim under the PAGA for the above-described violations and other violations described 4 below. 5 JURISDICTION AND VENUE 6 8. This Court has jurisdiction over all causes of action asserted herein pursuant to 7 the California Constitution, Article VI, Section 10, which grants the Superior Court original 8 jurisdiction in all cases except those given to other trial courts. The Court also has jurisdiction 9 over certain causes of action pursuant to Business & Professions Code §§ 17203 and 17204, 10 which provide for exclusive jurisdiction for enforcement of this statute in any court of competent 11 jurisdiction. 12 9. The amount in controversy herein, excluding interest, costs, penalties, and 13 attorneys’ fees, exceeds the minimum jurisdictional limit of this court. 14 10. Venue in San Mateo is proper under Business & Professions Code § 17203 and 15 California Code of Civil Procedure § 395.5 because Defendants’ unlawful conduct occurred in 16 this county, Defendants conduct substantial business in this County, a substantial part of the 17 transactions at issue took place in this County, and Defendants’ liability arose in, in part, in this 18 County. 19 PARTIES 20 11. Plaintiff Alida Mazariegos resides in San Rafael, California. She began working 21 for Vanguard in approximately 2011. To work for Vanguard, Plaintiff Mazariegos entered into 22 Vanguard’s Unit Franchise Agreement. Plaintiff Mazariegos provided cleaning services for 23 Defendants’ accounts in Petaluma, Marin, and San Rafael. In order to meet Vanguard’s stringent 24 policies, procedures, and operational standards, Plaintiff Mazariegos has worked up to five hours 25 a day, three to five days a week. Plaintiff Mazariegos left her work with Vanguard around 26 1 Pursuant to Emergency Rule 9, the statute of limitations for civil causes of action was tolled 27 beginning April 6, 2020, due to the emergency related to COVID-19. That tolling ends on October 1, 2020 for civil causes of action that exceed 180 days, which would encompass the 28 civil causes of action in this case. 3 Class Action Complaint for Damages 1 February of 2017. 2 12. Plaintiff Paula Gonzalez resides in La Puente, California. She began working for 3 Vanguard in approximately 2010. To work for Vanguard, Plaintiff Gonzalez entered into 4 Vanguard’s Unit Franchise Agreement. Plaintiff provided cleaning services for Defendants’ 5 accounts in La Puente, Walnut, La Brea, Covina, Pico Rivera, Pomona, and other areas in the 6 Los Angeles area. In order to meet Vanguard’s stringent policies, procedures, and operational 7 standards, Plaintiff Gonzalez has worked up to 10 to 12 hours a day, six days a week. While 8 Plaintiff Gonzalez still has a contract with Vanguard, she stopped personally performing work 9 for them in December of 2019, when she was injured at work. 10 13. Plaintiff Jaime Amaya resides in Sacramento, California. He began working for 11 Vanguard in approximately 2003. To work for Vanguard, Plaintiff Amaya entered into 12 Vanguard’s Unit Franchise Agreement. Plaintiff provided cleaning services for Defendants’ 13 accounts in Sacramento. To meet Vanguard’s stringent policies, procedures, and operational 14 standards, Plaintiff Amaya has worked up to nine or ten hours a day, five to six days a week. 15 Plaintiff Amaya still works for Vanguard. 16 14. Defendant Vanguard Cleaning Systems, Inc., is a California corporation with its 17 principal place of business in San Mateo, California. Vanguard contracts with “master 18 franchisors,” who in turn contract with “unit franchises” to provide cleaning services to its 19 customers across California. Vanguard provides the same standard contracts and training 20 materials to all its master franchisors and requires that master franchisors use these materials 21 with unit franchises (“Cleaners”). Vanguard is, and at all relevant times was, an employer subject 22 to California state wage-and-hour laws. 23 15. Defendant RR Franchising, Inc., d/b/a Vanguard Cleaning Systems of Southern 24 California and d/b/a Vanguard Cleaning Systems of Northern California is a California 25 corporation with its principal place of business in Buena Park, California. Defendant RR 26 Franchising, Inc., is a master franchisor serving various areas in Northern and Southern 27 California, including San Mateo County. Plaintiff Gonzalez has been listed as a unit franchisee 28 of RR Franchising, Inc. Upon information and belief, Plaintiff Gonzalez entered into a janitorial 4 Class Action Complaint for Damages 1 franchise agreement with Vanguard Cleaning Systems, Inc., which was later transferred to RR 2 Franchising, Inc. RR Franchising Inc. is, and at all relevant times was, an employer subject to 3 California state wage-and-hour laws. 4 16. Defendant Buddha Capital Corp., d/b/a Vanguard Cleaning Systems of 5 Sacramento, d/b/a Vanguard Cleaning Systems of the Central Valley, and d/b/a Vanguard 6 Cleaning Systems of the Central Coast is a California corporation with its principal place of 7 business in Lathrop, California. Defendant Buddha Capital Corp., is a master franchisor serving 8 various areas in the Central Valley and Sacramento areas. Plaintiff Amaya has been listed as a 9 unit franchisee of Defendant Buddha Capital Corporation. Plaintiff Amaya entered into a 10 janitorial franchise agreement with Vanguard Cleaning Systems, Inc., which later transferred its 11 contracts to Buddha Capital Corp. Buddha Capital Corp. is, and at all relevant times was, an 12 employer subject to California state wage-and-hour laws. 13 17. Defendant Wine Country Ventures, Inc. d/b/a Vanguard Cleaning Systems of the 14 North Bay is a California corporation with its principal place of business in San Rafael, 15 California. Defendant Wine Country Ventures, Inc., is a master franchisor serving the North Bay. 16 Plaintiff Mazariegos has been listed as a unit franchisee of Wine Country Ventures, Inc. Upon 17 information and belief, Plaintiff Mazariegos entered into a janitorial franchise agreement with 18 Wine Country Ventures, Inc., or another Vanguard entity, which later transferred its contracts to 19 Wine Country Ventures, Inc. Wine Country Ventures, Inc., is, and at all relevant times was, an 20 employer subject to California state wage-and-hour laws. 21 FACTUAL ALLEGATIONS 22 A. Cleaners Perform Work Within Vanguard’s Usual Course of Business And Are Not Engaged in An Independent Trade, Occupation, or Business. 23 24 18. Vanguard provides janitorial services to commercial offices, car dealerships, 25 gyms, warehouses, and many other businesses throughout the United States, including in 26 California. On its website, Vanguard advertises its ability to provide customers with “high- 27 quality, consistent commercial cleaning services” and notes that it has provided “consistent 28 commercial cleaning services to over 18,000 satisfied customers throughout the U.S. and 5 Class Action Complaint for Damages 1 Canada.” 2 Its advertised commercial cleaning services include green cleaning, commercial floor 2 cleaning, cleaning for health, window washing, commercial pressure washing, among others. 3 3 19. To carry out its business in California, Vanguard engages hundreds of persons 4 like Plaintiffs, who provide cleaning services to Vanguard’s clients. Plaintiffs and Class 5 Members provide routine services to Vanguard customers. 6 20. Vanguard establishes the contracts with Plaintiffs’ and Class Members’ cleaning 7 accounts, decides which accounts to offer Cleaners, collects payment directly from these 8 accounts before paying Cleaners, makes deductions from Cleaners’ pay before compensating 9 them, and determines when Cleaners are ultimately paid. Vanguard also retains the right to 10 handle account complaints and remove accounts from Cleaners. And while Vanguard charges 11 Cleaners for the privilege of working these Vanguard accounts, Plaintiffs and Class Members 12 have no rights to these accounts. For example, after paying to work an account, Vanguard can 13 remove the account from Plaintiffs at its discretion and sell it to another Cleaner without 14 providing Plaintiffs any compensation. 15 21. Cleaners do not operate truly independent cleaning companies serving many 16 different clients. Instead, Vanguard restricts cleaners’ ability to solicit and perform independent 17 work. Vanguard requires Plaintiffs to agree to a covenant not to compete, prohibiting them from 18 soliciting janitorial business from accounts that are already doing business with Vanguard. It 19 further prohibits cleaners from bidding against Vanguard for any account. For two years after the 20 term of the franchise agreement, cleaners are prohibited from soliciting any account for which 21 Cleaners have performed work while at Vanguard. 22 22. Vanguard further reserves for itself the right to transfer or assign all of its rights 23 under the franchise agreement, but Plaintiffs cannot transfer or assign their rights without 24 Vanguard’s prior written consent, as Vanguard views the rights under the franchise agreement as 25 26 2 Vanguard Cleaning Systems, Inc., “Upgrade to Vanguard Janitorial Services,” located at https://www.vanguardcleaning.com (last accessed September 18, 2020). 27 3 Vanguard Cleaning Systems, Inc., “Commercial Cleaning Services,” located at 28 https://www.vanguardcleaning.com/commercial-cleaning-services/ (last accessed June 11, 2020). 6 Class Action Complaint for Damages 1 “personal.” 2 23. Cleaners enter into a 10-year agreement with Vanguard, which is subject to 3 renewal. However, upon renewal, Vanguard retains the right to require Cleaners to sign its most 4 recent agreement, which may be materially different from Cleaners’ prior agreement. Vanguard 5 also requires, as a term of renewal, for Cleaners to sign a general release of any claims against 6 Vanguard. 7 24. Plaintiffs and Class Members’ work for Vanguard does not require any special 8 skill and is performed under the training, supervision, and instruction of Vanguard management. 9 B. Vanguard Required Cleaners To Sign Form Agreements That Give Vanguard All Necessary Control Over the Manner and Means by Which Plaintiffs Performs Their 10 Work. 11 25. As part of their work for Vanguard, Plaintiffs and Class Members were required 12 to enter into Vanguard’s form franchise agreement. These agreements and related policy 13 documents dictate in detail how Cleaners are required to perform their work. 14 26. Vanguard requires Plaintiffs and Class Members to work according to Vanguard 15 specifications, standards, policies, and procedures, including those published in its 16 volumes/manuals on various subjects (“Manuals”). Vanguard retains the right to make additions, 17 deletions or modifications to its Manuals at any time, and cleaners are responsible for being 18 aware of these changes and implementing them. For example, the Manuals inform Cleaners 19 about chemical safety, green cleaning processes (including proper chemical usage, attention to 20 building entryways, effective vacuuming and dusting, and safeguarding indoor air quality), and 21 the quadrant system method for cleaning. 22 27. Vanguard also requires Cleaners to comply with the contracts that Vanguard 23 negotiates with Cleaners’ accounts. These contracts, which govern the work that Plaintiffs and 24 Class Members perform, dictate: 25 a. The days and times that Cleaners will perform cleaning work; 26 b. The tasks that Cleaners perform. For example, they specify whether Cleaners 27 are to dust and clean all fixtures and office furniture, empty wastepaper 28 receptacles and replace liners, wash internal and entrance class windows, 7 Class Action Complaint for Damages 1 dust/remove cobwebs from all ceilings, clean window sills, vacuum carpeted 2 areas, clean restroom mirrors and glass, among many other detailed 3 instructions; 4 c. The amount that the account will be charged; 5 d. The days on which Vanguard will bill the account; 6 e. The term limits of the contract; 7 f. Whether Vanguard or the account will provide certain cleaning supplies. For 8 example, one account serviced by Plaintiff Gonzalez required her to provide 9 all cleaning supplies except for toiletries, liners, and paper supplies, which 10 Vanguard stated the account could purchase through Vanguard. 11 28. Vanguard requires Cleaners to provide accounts with those services that 12 Vanguard has approved and require Cleaners to obtain Vanguard’s approval before providing 13 any other services to the account. 14 29. Vanguard may provide equipment and supplies, such as mops, brooms, floor 15 signs, toilet brushes, All Purpose Cleaner, among other supplies, when Cleaners begin their work 16 for the company; however, Vanguard thereafter requires that Cleaners supply the supplies, 17 materials, and equipment that each Vanguard account requires pursuant to the contracts that 18 Vanguard has entered into with these accounts. Vanguard retains the right to modify its 19 specifications and requirements for supplies and equipment. 20 30. Cleaners must purchase the types and amounts of insurance that Vanguard 21 requires and name Vanguard as an additional insured. 22 31. Vanguard retains the right to perform a background check on Cleaners or anyone 23 else employed by Cleaners. 24 32. Vanguard retains broad termination rights under its agreements with Cleaners, 25 including, among many others, the right to terminate for providing unapproved services to 26 accounts, for failure to service customer accounts as scheduled, and failure to comply with 27 mandatory provisions in the Manuals. 28 33. Vanguard classifies Plaintiffs and Class Members as “independent contractors,” a 8 Class Action Complaint for Damages 1 designation that it made voluntarily and knowingly as a subterfuge to circumvent the 2 requirements of the California Labor Code. 3 C. Vanguard Cleaning Systems, Inc., is liable for the violations against Plaintiffs and all other aggrieved California Cleaners. 4 5 34. Vanguard Cleaning Systems, Inc. (referred to as “VCS”) designed and 6 implemented the contractual framework under which Plaintiffs and Class Members were 7 misclassified. 8 35. Plaintiffs and other Class Members purchased “janitorial franchises” from a 9 regional “master franchisor,” which in Plaintiff Gonzalez’s case was RR Franchising, Inc., d/b/a 10 Vanguard Cleaning Systems of Northern California, and d/b/a Vanguard Cleaning Systems of 11 Southern California; in Plaintiff Amaya’s case was Buddha Capital Corp., d/b/a Vanguard 12 Cleaning Systems of Sacramento, d/b/a Vanguard Cleaning Systems of the Central Valley, and 13 d/b/a Vanguard Cleaning Systems of the Central Coast; and in Plaintiff Mazariegos’s case was 14 Wine Country Ventures, Inc., d/b/a Vanguard Cleaning Systems of the North Bay. 15 36. Plaintiffs seek to recover damages and penalties against VCS on behalf of all 16 Class Members, regardless of their “master franchisor” entity. 17 37. Master franchisors are required to use their best efforts to actively recruit and 18 maintain unit franchises, like Plaintiffs and Class Members. VCS requires master franchisors to 19 solicit, generate, and maintain sufficient janitorial accounts in their area and sets a minimum 20 monthly account volume for master franchisors. 21 38. VCS requires master franchisors to investigate the qualifications of each unit 22 franchise pursuant to VCS’s standards, policies and procedures and requires the master 23 franchisor to provide VCS with any documentation and information relating to the unit 24 franchises that it requires. 25 39. VCS requires master franchisors to adapt its form franchise disclosure document, 26 and it further requires the master franchisor to enter into an agreement with the unit franchise 27 upon VCS’s then-current unit franchise form. VCS prohibits master franchisors from modifying 28 or offering to modify these agreements without VCS’s prior written approval. 9 Class Action Complaint for Damages 1 40. VCS requires master franchisors to provide initial training to unit franchises and 2 make available billing and collections of accounts according to VCS’s specifications. 3 41. VCS provides master franchisors with a copy of its Manuals and requires that 4 master franchisors provide these Manuals to unit franchisees, like Plaintiffs and Class Members. 5 VCS further requires master franchisors to ensure that unit franchises will perform their work in 6 accordance with the Manuals, the unit franchise agreement, and all other mandatory operating 7 procedures. VCS also requires master franchisors to comply with the terms of the Subfranchisor 8 Manual that it provides master franchisors. 9 42. Master franchisors are obligated to pay VCS up to 5% of the revenues which they 10 collect from Cleaners’ customers for their cleaning services, which include revenue received 11 from the sale of unit franchises to Cleaners, revenue from the accounts serviced by Cleaners, and 12 any other revenue received from the Vanguard system. 13 43. VCS prohibits master franchisors from permitting unit franchises to contract 14 directly with any customer. Instead, VCS requires that all accounts contract with the master 15 franchisor, and VCS reserves the right to require the master franchisor to use required forms and 16 mandatory language for customer contracts and invoices. 17 44. In a similar case against VCS in Massachusetts, the trial court found that 18 Vanguard could not satisfy two of the three prongs of the ABC test. 4 19 45. That court also found that VCS was liable for violations against aggrieved 20 cleaners because “Vanguard's revenue is derived from initial franchise fees, [some] percent of 21 the gross billings from work performed by unit franchisees, and various fees imposed on unit 22 franchisees. Vanguard's revenue, therefore, is directly dependent on commercial cleaning work 23 of the plaintiffs and other [cleaners].” 5 24 46. VCS’s business ultimately depends on someone performing the cleaning, which 25 in this case is janitorial franchise Cleaners. It relies on these Cleaners to continuously perform 26 4 Da Costa v. Vanguard Cleaning Systems, Inc. (Mass. Super., Sept. 29, 2017) 34 Mass.L.Rptr. 27 483. 28 5 Id. 10 Class Action Complaint for Damages 1 cleaning services. 2 47. VCS is directly liable for the violations described herein. See Vazquez v. Jan-Pro 3 Franchising International, Inc. (9th Cir. 2019) 923 F3d 575, 598, reh’g granted, opinion 4 withdrawn (9th Cir. 2019) 930 F.3d 1107, and on reh’g (9th Cir. 2019) 939 F.3d 1045, and 5 opinion reinstated in part on reh’g (9th Cir. 2019) 939 F.3d 1050 (finding that in a three-tiered 6 cleaning franchise model, the top-tier franchise could be held liable as an employer under the 7 ABC test even though it was not a party to any of the contracts with the alleged employees). 8 VCS is also liable to Plaintiffs and Class Members under Labor Code § 2810.3 as a “client 9 employer” who “obtains or is provided workers to perform labor within its usual course of 10 business from a labor contractor” – here, master franchisors like RR Franchising, Buddha 11 Capital, and Wine Country Ventures, Inc. 12 CLASS ACTION ALLEGATIONS 13 48. Plaintiffs bring this action individually and as a class action on behalf of a class 14 defined as follows: all California owner-operator franchisee cleaners who signed a franchise 15 agreement with Vanguard Cleaning Systems, Inc., or any of its master franchisors, and who 16 personally performed cleaning work during the period commencing four years prior to April 6, 17 2020 (individually referred to as “Class Members” and collectively as the “Class”). 18 49. This action is brought, and may properly be maintained, as a class action pursuant 19 to California Code of Civil Procedure § 382 because there is a well-defined community of 20 interest in the litigation and the proposed class is easily ascertainable. This action presents 21 questions of common interest and satisfies the numerosity, commonality, typicality, adequacy, 22 predominance, and superiority requirements of this provision. 23 Numerosity: 24 50. The size of the proposed Class makes individual joinder of all members 25 impracticable. While Plaintiffs do not presently know the exact number of Class Members, 26 Plaintiffs are informed an believe, and thereon allege, that as many as 700 persons have been 27 subjected to the unlawful practices alleged herein during the class period. 28 11 Class Action Complaint for Damages 1 Commonality: 2 51. Common questions of law and fact exist as to all members of the Class and 3 predominate over any questions that affect only individual members of the Class. These common 4 questions of law and fact include, without limitation: 5 a. Whether Defendants have retained sufficient rights to control Class Members’ 6 work so as to render the Class Members employees under California law; 7 b. Whether Cleaners are free from Defendants’ control and direction in 8 connection with the performance of their work, both under Defendants’ 9 contract and in fact; 10 c. Whether Cleaners perform work that is outside the usual course of 11 Defendants’ business; 12 d. Whether Cleaners are customarily engaged in an independently established 13 trade, occupation, or business; 14 e. Whether Class Members have incurred employment-related expenses and 15 losses in carrying out their duties for Defendants; 16 f. Whether Defendants have failed to indemnify Class Members for their 17 necessary employment-related expenses and losses in violation of California 18 Labor Code § 2802 and IWC Wage Order No. 5; 19 g. Whether Defendants’ collection and deduction of fees and requiring a cash 20 bond violated California Labor Code §§ 221, 400-410, and IWC Wage Order 21 No. 5; 22 h. Whether Defendants have violated California Labor Code § 1174 and IWC 23 Wage Order No. 5 by failing to maintain documentation of actual hours that 24 Class Members worked each day; 25 i. Whether Defendants knew or should have known that Class Members 26 regularly worked for over 40 hours per week and/or eight hours per day; 27 j. Whether Defendants failed to pay Class Members overtime wages for time 28 worked in excess of 40 hours per week or eight hours per day; 12 Class Action Complaint for Damages 1 k. Whether Defendants failed to provide Class Members with adequate off-duty 2 meal periods and compensation for missed meal periods in violation of 3 California Labor Code §§ 226.7 and 512 and IWC Wage Order No. 5; 4 l. Whether Defendants have failed to provide Class Members with adequate rest 5 periods and failed to separately compensate Class Members for each hour 6 worked in violation of California Labor Code §§ 226.7, 1194, and IWC Wage 7 Order No. 5; 8 m. Whether Defendants had a policy or practice of not paying meal and rest 9 period premiums when meal and rest periods were not provided; 10 n. Whether Defendants have violated California Labor Code §§ 201-203 by 11 failing, upon termination, to timely pay Class Members wages that were due 12 for overtime and missed meal periods; 13 o. Whether Defendants’ misclassification of Class Members was willful and in 14 violation of California Labor Code § 226.8; 15 p. Whether Defendants, in violation of California Labor Code § 226 failed to 16 provide accurate, itemized wage statements reflecting, among other items, 17 Class Members’ hours of work and rates of pay; 18 q. Whether Defendants’ failures to: (a) indemnify and reimburse Class Members 19 for necessary employment-related expenses, (b) pay Class Members for all 20 hours worked; (c) pay Class Members overtime compensation; (d) provide 21 Class Members with adequate off-duty meal periods and meal period 22 compensation; (e) provide Class Members with rest periods, separately 23 compensated Class Members for rest periods, and provide compensation for 24 missed rest periods; (f) provide Class Members with accurate itemized wage 25 statements; (g) maintain documentation of the actual hours worked each day; 26 and (h) timely pay Class Members all wages that were due upon termination, 27 along with Defendants’ collection and deduction of fees and expenses from 28 Class Members’ compensation and their misclassification of Class Members 13 Class Action Complaint for Damages 1 as independent contractors, and their charging fees and/or making deductions 2 from Plaintiffs’ and Class Members’ compensation constitute unlawful, 3 unfair, and/or fraudulent business practices under Cal. Business & Professions 4 Code § 17200, et seq.; 5 r. What amounts Plaintiffs and Class Members are entitled to receive in interest 6 on unpaid compensation due and owed to them. 7 Typicality: 8 52. Plaintiffs’ claims are typical of the claims of the Class. Plaintiffs and Class 9 Members sustained injuries and damages arising out of and caused by Defendants’ common 10 course of conduct in violation of law as alleged herein. 11 Adequacy of Representation: 12 53. Plaintiffs are adequate representatives of the Class in that their claims are typical 13 of those of the Class. Plaintiffs have the same interests in the litigation of this case as the Class 14 Members; they are committed to vigorous prosecution of this case and have retained competent 15 counsel experienced in class action and wage and hour litigation of this nature. Plaintiffs are not 16 subject to any individual defenses unique from those conceivably applicable to the Class as a 17 whole and anticipate no management difficulties in this litigation. 18 Predominance: 19 54. Defendants have engaged in a common course of wage-and-hour abuse toward 20 Plaintiffs and Class Members. The common issues arising from this conduct that affect Plaintiffs 21 and Class Members predominate over any individual issues. Adjudication of these common 22 issues in a single action has important and desirable advantages of judicial economy. 23 Superiority of Class Action: 24 55. A class action is superior to other available methods for the fair and efficient 25 adjudication of this controversy because individual litigation of the claims of all Cass Members 26 is impracticable. It would be unduly burdensome to the courts in which individual litigation of 27 numerous cases would proceed. Individualized litigation would also present the potential for 28 varying, inconsistent, or contradictory judgments and would magnify the delay and expense to 14 Class Action Complaint for Damages 1 all parties and to the court system resulting from multiple trials of the same complex factual 2 issues. Moreover, individual actions by Class Members may establish inconsistent standards of 3 conduct for Defendants. By contrast, the conduct of this action as a class action, with respect to 4 some or all of the issues presented herein, presents fewer management difficulties, conserves the 5 resources of the parties and the court system, and protects the rights of each Class Member. 6 56. Defendants have acted or refused to act in respects generally applicable to the 7 class, thereby making appropriate relief with regard to the members of the Class as a whole, as 8 requested herein. 9 FIRST CAUSE OF ACTION FAILURE TO PROVIDE REIMBURSEMENT FOR BUSINESS EXPENSES 10 (CALIFORNIA LABOR CODE §§ 2802, 2810.3 AND IWC WAGE ORDER 5, §§ 8-9) (ON BEHALF OF PLAINTIFFS AND CLASS MEMBERS) 11 12 57. The allegations of each of the preceding paragraphs are re-alleged and 13 incorporated herein by reference, and Plaintiffs allege as follows a claim of relief on behalf of 14 themselves and all Class Members. 15 58. While acting on the instructions of Defendants and discharging their duties for 16 them, Plaintiffs and Class Members have incurred and paid work-related expenses. Such 17 expenses include, but are not limited to, cleaning supplies, cleaning equipment, mandatory 18 insurance, gas and vehicle maintenance, and other necessary expenses. Plaintiffs and Class 19 Members were also required to pay thousands of dollars in franchise fees and business support 20 and service fees to perform their work. 21 59. Defendants failed to indemnify or in any manner reimburse Plaintiffs and Class 22 Members for these expenditures and losses even though these necessary expenditures were 23 incurred as a direct consequence of their work requirements, either as a de facto cost (e.g. gas 24 and cleaning supplies) or a requirement of the agreements Defendants force cleaners to accept as 25 a condition of employment. 26 60. California Labor Code § 2810.3, effective January 1, 2015, states that “A client 27 employer shall share with a labor contractor all civil legal responsibility and civil liability for all 28 workers supplied by that labor contractor for…the payment of wages.” 15 Class Action Complaint for Damages 1 61. A “labor contractor” is defined as “an individual or entity that supplies, either with or 2 without a contract, a client employer with workers to perform labor within the client employer's usual 3 course of business.” 4 62. “Client employer” is defined as “a business entity, regardless of its form, that obtains 5 or is provided workers to perform labor within its usual course of business from a labor contractor.” 6 63. Defendants RR Franchising, Inc., Wine Country Ventures, Inc., and Buddha Capital 7 Corp. served as labor contractors under § 2810.3 by providing workers to provide cleaning services, 8 which is part of the usual course of business for Vanguard Cleaning Systems, Inc. As a result, 9 Defendant Vanguard Cleaning Systems, Inc. was a client employer within the definition of Labor 10 Code § 2810.3. 11 64. In addition to being liable as an employer, Vanguard Cleaning Systems, Inc. is 12 also liable to Plaintiffs as a client employer for the violations detailed herein under Labor Code § 13 2810.3. 14 65. Defendants have violated and continue to violate California Labor Code § 2802 15 and IWC Wage Order 5, §§ 8-9. As a direct and proximate result of Defendants’ conduct, 16 Plaintiffs and Class Members have suffered substantial losses according to proof, as well as pre- 17 judgment interest, costs, penalties, and attorneys’ fees for the prosecution of this action, as 18 described below. SECOND CAUSE OF ACTION 19 UNLAWFUL WITHHOLDING AND RECEIPT OF EARNED WAGES 20 (CALIFORNIA LABOR CODE §§ 221, 400-410, 450, 2810.3 AND IWC WAGE ORDER NO. 5, §§ 8-9) 21 (ON BEHALF OF PLAINTIFFS AND CLASS MEMBERS) 22 66. The allegations of each of the preceding paragraphs are re-alleged and 23 incorporated herein by reference, and Plaintiffs allege as follows a claim of relief on behalf of 24 themselves and all Class Members. 25 67. Labor Code § 221 provides: “It shall be unlawful for any employer to collect or 26 receive from an employee any part of wages theretofore paid by said employer to said 27 employee.” 28 68. Labor Code § 223 provides: “Where any statute or contract requires an employer 16 Class Action Complaint for Damages 1 to maintain the designated wage scale, it shall be unlawful to secretly pay a lower wage while 2 purporting to pay the wage designated by statute or by contract.” 3 69. Labor Code §§ 400-410 (“Employee Bond Law”) provide the limited 4 circumstances under which an employer can exact a cash bond from its employees. These 5 provisions are designed to protect employees against the very real danger of an employer taking 6 or misappropriating employee funds held by the employer in trust. 7 70. Labor Code § 450 states “No employer, or agent or officer thereof, or other 8 person, may compel or coerce any employee, or applicant for employment, to patronize his or 9 her employer, or any other person, in the purchase of any thing of value.” 10 71. IWC Wage Order No. 5, § 8 provides that the only circumstance under which an 11 employer can make a deduction from an employee’s wage for cash shortage, breakage, or loss of 12 equipment is if the employer can show that the shortage, breakage, or loss was the result of the 13 employee’s gross negligence or dishonest or willful act. 14 72. IWC Wage Order No. 5, § 9 provides that when tools or equipment are required 15 by the employer or are necessary to the performance of a job, such tools and equipment shall be 16 provided and maintained by the employer 17 73. These and related statutes, along with California’s fundamental public policy 18 protecting wages and wage scales, prohibit employers from subjecting employees to 19 unanticipated or unpredicted reductions in their wages; making employees the insurers of their 20 employer’s business losses; otherwise passing the ordinary business losses of the employer onto 21 the employee; taking deductions from wages for business losses unless the employer can 22 establish that the loss was caused by a dishonest or willful act, or gross negligence of the 23 employee; or taking other unpredictable deductions that may impose a special hardship on 24 employees. 25 74. Defendants have violated Cal. Labor Code §§ 221, 223, 400-410, 450 and IWC 26 wage order No. 5, §§ 8-9 by unlawfully taking deductions from Plaintiffs’ and Class Members’ 27 compensation to cover certain ordinary business expenses of Defendants, including but not 28 limited to franchise fees, fees for new accounts, business support and service fees, insurance, and 17 Class Action Complaint for Damages 1 a number of other fees. 2 75. In addition to being liable as an employer, Vanguard Cleaning Systems, Inc. is 3 also liable to Plaintiffs as a client employer for the violations detailed herein under Labor Code § 4 2810.3. 5 76. Because Defendants took unlawful deductions from Plaintiffs’ and Class 6 Members’ compensation, they are liable to Plaintiffs for the compensation that should have been 7 paid but for the unlawful deductions, pursuant to Cal. Labor Code §§ 221, 223, 400-410, 450 and 8 IWC Wage Order No. 5, §§ 8-9. 9 77. By unlawfully deducting wages and failing to pay Plaintiffs and Class Members, 10 Defendants are also liable for penalties, reasonable attorneys’ fees, and costs as described below. 11 THIRD CAUSE OF ACTION FAILURE TO PROVIDE MEAL PERIODS 12 (CALIFORNIA LABOR CODE §§ 226.7, 512, 2810.3 AND IWC WAGE ORDER NO. 5, § 11) (ON BEHALF OF PLAINTIFFS AND CLASS MEMBERS) 13 14 78. The allegations of each of the preceding paragraphs are re-alleged and 15 incorporated herein by reference, and Plaintiffs allege as follows a claim of relief on behalf of 16 themselves and all Class Members. 17 79. Labor Code § 226.7 states in pertinent part: “An employer shall not require an 18 employee to work during a meal or rest or recovery period mandated pursuant to an applicable 19 statute, or applicable regulation, standard, or