Harris v. Nerium International, LLC et al

Complaint

Northern District of California, cand-3:2018-cv-02877

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6 Alejandro P. Gutierrez, SBN 107688 1 agutierrez@hathawaylawfirm.com HATHAWAY, PERRETT, WEBSTER, POWERS, 2 CHRISMAN & GUTIERREZ, APC 200 Hathaway Building 3 5450 Telegraph Road, Suite 200 Post Office Box 3577 4 Ventura, CA 93006-3577 Telephone: (805) 644-7111 5 Facsimile: (805) 644-8296 6 Daniel J. Palay, SBN 159348 7 djp@calemploymentcounsel.com Brian D. Hefelfinger, SBN 253054 8 bdh@calemploymentcounsel.com PALAY HEFELFINGER, APC 9 1484 E. Main Street, Suite 105-B Ventura, California 93001 10 Tel: (805) 628-8220 Fax: (805) 765-8600 11 Attorneys for Plaintiff JON HARRIS 12 And the Putative Class 13 14 UNITED STATES DISTRICT COURT 15 NORTHERN DISTRICT OF CALIFORNIA 16 17 JON HARRIS, an individual; on behalf of) CASE NO: himself and other persons similarly situated,) 18) CLASS ACTION) Plaintiffs,) COMPLAINT FOR: 19) v.) 1) FAILURE TO PAY WAGES; 20 2) FAILURE TO PROVIDE) 21 NERIUM INTERNATIONAL, LLC, a Texas) ACCURATE WAGE Limited Liability Company; NERIUM) STATEMENTS (CAL. LABOR 22 SKINCARE, INC., a Texas Corporation; JEFF) CODE § 226);) OLSON, an individual; RENEE OLSON, an) 3) UNFAIR COMPETITION (CAL. 23 individual; and DOES 1-10, inclusive, BUS. & PROF. CODE § 17200);) 24) 4) FAILURE TO REIMBURSE Defendants.) BUSINESS EXPENSES (CAL. 25)) LABOR CODE § 2802); AND 26) 5) DECLARATORY RELIEF) _____________________________________) 27 DEMAND FOR JURY TRIAL 28 1 COMPLAINT; DEMAND FOR JURY TRIAL 6 1 TO ALL INTERESTED PARTIES HEREIN AND TO THEIR ATTORNEYS OF 2 RECORD: 3 COME NOW, Plaintiff JON HARRIS ("Plaintiff") and the putative class, and submit the 4 following Complaint against NERIUM INTERNATIONAL, LLC, a Texas Limited Liability 5 Company; NERIUM SKINCARE, INC., a Texas Corporation; JEFF OLSON, an individual; 6 RENEE OLSON, an individual; and DOES 1-10, inclusive (collectively the "Defendants"), and 7 each of them as follows. 8 INTRODUCTION 9 1. This is a class, collective, and representative action brought by Plaintiff, on behalf 10 of himself and all others similarly situated. Plaintiff and those similarly situated are or were 11 employed by Defendants as "brand partners" or sales representatives and were denied proper 12 classification as to employee versus independent contractor status (and, thus, the attendant 13 benefits arising from proper classification), as required by California law. 14 2. The Class is made up of each person who has worked for Defendants in California 15 as a "brand partner" within 4 years of the filing of this action through the date of certification of 16 the class (the "Class Period"). 17 3. During the Class Period, Defendants failed to pay all wages, reimbursements, and 18 other benefits owed to Plaintiff and each member of the putative class as required by federal and 19 state law. 20 4. Defendants maintained a practice of hiring Plaintiff and the putative class 21 members as purported "independent contractors," despite that Defendants at all relevant times: 22 (i) maintained control and direction over the brand partners; (ii) required the workers to perform 23 work that was within the usual course of the Defendants' business; and (iii) utilized workers that 24 were not customarily engaged in any independently established trade, occupation, or business 25 of a different nature from the work performed for the hiring entity. See, e.g., Dynamex 26 Operations W., Inc. v. Superior Court, 2018 Cal. LEXIS 3152 (Cal. Sup. Ct. Case No. S222732, 27 Apr. 30, 2018); Cal. Labor Code § 226.8. 28 2 COMPLAINT; DEMAND FOR JURY TRIAL 6 1 5. As a result, Plaintiff and the putative class were and are misclassified in their 2 employment status, and Plaintiff seeks relief for all such individuals. 3 VENUE AND JURISDICTION 4 6. Venue and jurisdiction is appropriate in this Federal Court because the Plaintiff, a 5 citizen of California, and the Defendants herein, citizens of Texas, are citizens of different states. 6 Further, the amount in controversy exceeds $75,000.00. As a result, this Court maintains 7 jurisdiction pursuant to 28 U.S.C. section 1332(a)(1). 8 7. In addition, this Court has original jurisdiction for all state law claims asserted 9 under California law pursuant to the Class Action Fairness Act, 28 U.S.C. § 1332(d)(2), in that 10 the estimated damages involved in the claims alleged will exceed $5,000,000, the number of 11 members of all proposed plaintiff classes in the aggregate exceeds 500, and the parties to this 12 action are residents of different states. This Court also has supplemental jurisdiction over related 13 state law claims asserted herein pursuant to 28 U.S.C. § 1367. 14 8. Venue in this judicial district is proper pursuant to 28 U.S.C. § 1391(b). At all 15 times material herein, Defendants and Plaintiff have been actively transacting business in the 16 State of California, and within the geographic area encompassing the Northern District of the 17 State of California, where it employs putative class members to market and sell Nerium products 18 and related "brand partner" economic opportunities. 19 THE PARTIES 20 9. At all times herein mentioned, Plaintiff JON HARRIS was an employee of 21 Defendants, working in the state of California as a Nerium "brand partner" for Defendants from 22 2012 through the present. 23 10. At all times herein mentioned, Plaintiff HARRIS was and is a resident of and 24 citizen of the State of California, with the intent to remain as such. 25 11. At all times herein mentioned, Plaintiff is informed and believes and, based on 26 such information and belief, thereon alleges that NERIUM INTERNATIONAL, LLC is a Texas 27 Limited Liability Company, transacting business in the State of California including through the 28 3 COMPLAINT; DEMAND FOR JURY TRIAL 6 1 use of its "brand partners" such as Plaintiff and the putative class members, and through the sale 2 of its skin care products to residents and citizens of California. 3 12. At all times herein mentioned, Plaintiff is informed and believes and, based on 4 such information and belief thereon alleges that NERIUM SKINCARE, INC. is a Texas 5 Corporation, transacting business in the State of California including through the use of its 6 "brand partners" such as Plaintiff and the putative class members, and through the sale of its 7 skin care products to residents and citizens of California. 8 13. At all times herein mentioned, Plaintiff is informed and believes and, based on 9 such information and belief, thereon alleges that defendant JEFF OLSON is and has been a 10 natural person who is an owner, director, officer, and/or managing agent of the corporate 11 defendants named in this matter, and as such may be held liable as the employer pursuant to 12 California Labor Code § 558.1 for purposes of claims asserted in this action. On information 13 and belief, JEFF OLSON is a citizen of the state of Texas. 14 14. At all times herein mentioned, Plaintiff is informed and believes, and thereon 15 alleges that defendant RENEE OLSON is and has been a natural person who is an owner, 16 director, officer, and/or managing agent of the corporate defendants named in this matter, and 17 as such may be held liable as the employer pursuant to California Labor Code § 558.1 for 18 purposes of claims asserted in this action. On information and belief, RENEE OLSON is a 19 citizen of the state of Texas. 20 15. The Defendants herein operate a business enterprise under the brand or tradename 21 "Nerium," and it is alleged herein that Defendants generate revenue using a product-based 22 pyramid scheme. Specifically, it is alleged that Defendants sell their products to the Nerium 23 "brand partners," such as Plaintiff, who are supposed to recruit multiple, new Nerium brand 24 partners. Any new recruits, in turn, purchase additional Nerium products, and recruit yet more 25 Nerium brand partners, in an ever-growing pyramid. 26 16. Defendants use the lure of potential future bonuses, commissions, prizes (like 27 iPads and Lexus cars) and "limitless opportunities" to motivate active participation and 28 4 COMPLAINT; DEMAND FOR JURY TRIAL 6 1 recruitment of Nerium brand partners. Defendants produce and sell a skin care product in the 2 form of a skin cream named "Nerium AD." Defendants claim that the Nerium AD cream has 3 "remarkable properties" and that it produces "age defying results" when applied to the skin, 4 among other claims. (See, e.g., https://www.nerium.com/ us/en/shop/1001_US, accessed May 5 16, 2018). 6 17. The true names and capacities, whether individual, corporate, associate, 7 representative or otherwise, of the defendants identified herein as Does 1 through 10, inclusive, 8 are unknown to Plaintiff, who therefore sues these defendants by said fictitious names. Plaintiff 9 will amend this Complaint to allege the true names and capacities of Does 1 through 10 when 10 they have been ascertained. Does 1 through 10 are in some manner legally responsible for the 11 wrongs and injuries alleged herein. 12 18. Each of the Defendants acted as the agent, employer or employee of the others 13 and each acted within the scope of that agency or employment. 14 CLASS ACTION ALLEGATIONS 15 19. Plaintiff brings this action as a class action pursuant to Rule 23 of the Federal 16 Rules of Civil Procedure on behalf of the following defined class (herein, the "Class"): 17 Each and every person who has worked for Defendants in California as a 18 "brand partner" within 4 years of the filing of this action through the date of certification of the class (the "Class Period"). 19 20. Numerosity: The Class represents over 25 persons and is so numerous 20 that the joinder of each member of the Class is impracticable. 21 21. Typicality: Plaintiff's claims are typical of the members of the Class. Plaintiff is 22 informed and believes that, like other "brand partners" working for Defendants, he routinely did 23 not receive all wages earned or reimbursement for business expenses incurred, or accurate 24 itemized wage statements, during the Class Period. Plaintiff had the same duties and 25 responsibilities as other Class members. Plaintiff and the Class were subject to Defendants' 26 standard policy and practice of improperly classifying "brand partners" as purported 27 "independent contractors," failing to pay required wages, including failing to pay waiting time 28 5 COMPLAINT; DEMAND FOR JURY TRIAL 6 1 penalties, failing to provide accurate itemized wage statements, failing to maintain accurate 2 records of hours worked, and failing to reimburse necessary business expenses. 3 22. Superiority: A class action is superior to other available methods for the fair and 4 efficient adjudication of the controversy, particularly in the context of wage-and-hour litigation 5 where individual plaintiffs lack the financial resources to vigorously prosecute separate lawsuits 6 in federal court against large, corporate defendants. The members of the Class that Plaintiff 7 represents have no plain, speedy or adequate remedy at law against Defendants, other than by 8 maintenance of this class action, because Plaintiffs are informed and believe, and on such 9 information and belief allege, that the damage to each member of the Class is relatively small 10 and that it would be economically infeasible to seek recovery against Defendants other than by 11 a class action. 12 23. Adequacy: Plaintiff will fairly and adequately represent the interests of the Class, 13 because Plaintiff is a member of the Class, and Plaintiff's claims are typical of those in the Class. 14 24. Commonality: Common questions of law and fact exist as to all members of the 15 Class and predominate over any questions solely affecting individual members of the Class. The 16 common questions of law and fact that predominate in this matter include: 17 a. Whether Defendants misclassified Plaintiff and the members of 18 the Class as independent contractors rather than as employees; 19 b. Whether Defendants unlawfully failed to pay all earned wages to