Vita-Mix Agrees to Pay $1.6M Over California Exempt Employee Rules

Vita-Mix Corporation and staffing agency, Kelly Services Inc., have opted to pay $1.6 million to settle alleged claims brought forth in a wage and hour lawsuit that stated they had violated several federal and state labor statutes, including California exempt employee rules.

According to the plaintiffs, the defendants had misclassified Vita-Mix sales personnel as being exempt from various legal protections, like minimum wage and overtime requirements.

The employees, known as roadshow demonstrators, were paid by commission based on the amount of Vita-Mix product they sold during the roadshow work.

The California exempt employee rules lawsuit alleges that this is in violation of the federal Fair Labor Standards Act and California labor laws.

The workers’ motion for preliminary settlement approval says that the non-reversionary $1.6 million settlement is allotted so that each individual worker and class member will receive roughly $952.17. In seeeking settlement approval, the workers argue that the average recovery amount that it far exceeds other recoveries allotted in separate wage and hour class action lawsuits and settlements, yet is still within a range that the court can approve.

The proposed settlement would end the putative class action lawsuit that was brought forth by plaintiff Rainoldo Gooding and Nadeen Gooding one year ago, in June.

They had both filed the California exempt employee rules lawsuit against Vita-Mix and Kelly Services after working for their demonstration booths. They both claim that they had primarily worked throughout Costco wholesale stores and that the demonstration booths would be set up during roadshows. Demonstrations can last anywhere between four hours and 20 days or more, the plaintiffs claim.

The California exempt employee rules lawsuit had been filed alleging violations of unpaid minimum wage and overtime wages under the Fair Labor Standards Act. It also alleged violations of meal and rest period requirements, improper deductions from paychecks, and inaccurate wage statements, all alleged violations of California law.

The California Exempt Employee Rules Settlement Facts

Although the defendants have opted to pay the $1.6 million settlement, they deny the allegations and assert that the salespersons’ classification was proper under an FLSA exception for “outside sales” workers.

The proposed settlement allegedly took months of private mediation.

Under the proposed settlement, a single payment of $66,666 from Vita-Mix and Kelly Services will cover the PAGA penalty, in which a portion will be paid to California’s Labor and Workforce Development Agency.

The proposed settlement provides that just over $1 million will be allotted between 1,050 Class Members, once reward incentives and administrative costs are recompensed. The amount will also depend on the total number of weeks each demonstrator worked at the demonstration booths.

The proposed distribution of the settlement amount will be disbursed among demonstrators who worked for the companies between June 3, 2012 and March 13, 2017.

The settlement also proposes dividing the Class Members into three Classes: a California Class, a non-California Class and a nationwide FLSA Class.

UPDATE: November 2017, the Vitamix sales representative wage and hour class action settlement is now open. Click here to file a claim.

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