LOS ANGELES — Appliance maker Vita-Mix Corp. and staffing agency Kelly Services Inc. recently agreed to a $1.6 million settlement to resolve claims the two companies under paid workers hired to demonstrate Vita-Mix’s line of blenders and other products at trade shows. Approximately 1,050 workers will share in the award, which will also cover attorney’s fees and other administrative costs to litigate the matter, with each class member will receive an average of $952.17.
Filed in U.S. District Court for the Central District of California in June 2017 by two former workers, the complaint alleges the defendants worked together to misclassify roadshow workers as overtime exempt, only paying these individuals on a commission basis regardless of how many hours worked. The employees worked in demonstration booths, mostly as Costco retail stores, showing off Vita-Mix’s line of blenders and accessories where the workers would be paid only a percentage of their sales made.
Defendants Claim Employees were “Outside Sales Persons”
Under state and federal wage laws, companies may pay workers on a commission basis but must make up any difference between the employee’s wages and the minimum he or she would have earned being paid only minimum wages. In this case, the plaintiffs alleged the defendant’s refusal to make up the difference violated the Fair Labor Standards Act (FLSA), California labor and wage laws, and the Private Attorneys General Act.
The defendants contended the plaintiffs worked as “outside sales persons” and were thus exempt from many wage protections under state and federal law. Under the FLSA, outside sales persons sell their employer’s products, services, or facilities to customers away from their employer’s place of business. Typically, outside sales persons are door to door or direct sales persons but in this case, the works sold products in a retail setting and is another example of the lengths many businesses will go to increase profits at the expense of hardworking men and women trying to earn a living.
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