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Vacuum Salespeople Lawsuit: This Job Sucks

by Thomas MacMillan | Jun 22, 2011 11:47 am

(16) Comments | Commenting has been closed | E-mail the Author

Posted to: Business/ Economic Development, Legal Writes

Ruth Dixon and Andre Smith answered ads promising they’d earn $500 a week working for a Kirby vacuum cleaner distributor. But, they said, they never saw a cent, even after memorizing an elaborate sales pitch, driving hundreds of miles on their own dime, cleaning acres of carpet, and singing hymns of praise to Kirby at strobe-light-filled morning pep rallies.

That’s how New Haveners Dixon and Smith described their time working for SZ Enterprises, an Orange-based distributor of Kirby vacuum cleaners.

They’re two of eight plaintiffs in a federal lawsuit filed Monday against SZ, owner Scott Zabka, and the Kirby company.

The lawsuit alleges that SZ hired employees under false pretenses and then failed to pay them the wages they were owed. Those unlawful practices are a result of company policies set out by Kirby, a nationwide vacuum cleaner company, the lawsuit charges.

Scott Zabka, the owner of SZ Enterprises, declined to comment on the lawsuit. He said he had not yet had a chance to read the complaint.

Halle Haniewich, spokeswoman for Kirby, said the company was “not in a position to comment” as it had not yet been served with the complaint.

The company considers people like Dixon and Smith “independent contractors,” not “employees.” The dispute centers on that question—and whether the company was up front about the distinction.

Allegations of scams associated with Kirby vacuums have surfaced across the country. In November of last year, the state Department of Consumer Protection asked then-Attorney General Richard Blumenthal to investigate the company’s practices in Connecticut, including SZ Enterprises.

Earlier this month, the company settled with the state, agreeing to pay $25,000 and change some of its sales practices, according to a department press release. The company agreed to get written permission from a customer before starting a sales pitch, among other concessions. Click here to read all the details.

The case filed Monday is being handled by lawyers from New Haven Legal Assistance, who are looking to have it certified as a class action lawsuit. Legal aid staff attorney James Bhandary-Alexander said he thinks many more mistreated workers are out there,and could choose to join as plaintiffs on a class action suit. Read the complaint here.

On Tuesday afternoon, Smith and Dixon sat down at New Haven Legal Assistance’s State Street offices with Bhandary-Alexander and Susan Nofi-Bendici, deputy director of the organization, to discuss the case.

Here’s what they said happened to them at SZ Enterprises:

In August 2010 Dixon answered an ad in the New Haven Register from a company looking for “customer service representatives.” She showed up at the Orange offices of SZ Enterprises on a Tuesday and was told she would be making $500 a week, to start.

Dixon recalled being pleased to hear that figure, since she’d been unemployed for some time. Dixon, who’ll be 60 on June 23, had previously held a clerical job in the New York court system before moving to New Haven about a year ago.

Smith, a 46-year-old New Haven native, said he was also pleased with the promised salary when he joined in February 2011. He had been unemployed since 2008 following a kidney transplant. He was told that he’d be demonstrating Kirby vacuum cleaners in people’s homes and that he was guaranteed $500 per week for doing 15 demonstrations a week.

Smith and Dixon, who both live in Dixwell, both said they were told that investment guru Warren Buffett was either the CEO or president of the vacuum company, which went a long way towards selling them on the job.

“So we think we’re going to make millions and millions of dollars,” Smith said.

Dixon recalled wondering why the furniture in the office looked so “raggedy” but was reassured after hearing Buffett was in charge. “I said, ‘Let me hang in there.’”

A Buffett firm does have a distant ownership stake in Kirby, but the investor is certainly not president or CEO, Bhandary-Alexander said.

After signing on, Dixon and Smith both took part in several days of mandatory training, during which they were instructed in the “10-Step Demo Sequence,” an elaborate and detailed script that they were to follow when demonstrating—and trying to sell—Kirby vacuums.

“Brainwashing”

It was like memorizing lines from a play, Dixon said. And it required a thespian’s flair for drama. Part of the sequence called for a side-by-side comparison of the homeowner’s current vacuum and the Kirby vacuum. After the old vacuum failed to perform, the script called for Dixon to drape a black cloth over it and adorn it with a single funereal rose.

After training, Smith and Dixon began to work 12-hour days, sometimes six days a week. Each shift would start with a mandatory meeting at the Orange office, where they would sing songs from a book of tunes about Kirby.

“‘Kirby, Kirby is the best! All the others are just less!’ Or something like that,” Smith recalled.

They also had to take part in chants like “We are POSITIVE!” Smith said.

The conference room where the meetings were held included a DJ stand. Occasionally the overhead lights would go out, a strobe light would come on, and hip-hop music would start pumping. Anyone who had made a sale the previous day would stand up, go to the front, have to dance to the music and then tell the room how they made their sale.

The tone was relentlessly upbeat. “It’s like a sorority, a little bit,” Smith said.

Dixon said it was like being “brainwashed.”

“It’s also a way of asserting their power,” Bhandary-Alexander said. The company can’t have expected that everyone was enjoying the loud music and chanting, he argued, but it forced the workers to pretend that they did. It was a way of saying, “‘You’ll sit here and listen and put a smile on your face,’” Bhandary-Alexander said.

After the morning meeting, work would begin. Sometimes that meant going out to distribute coupons. Other times it meant sitting around waiting to be given an appointment to demonstrate a vacuum cleaner.

Employees weren’t allowed to call ahead to homes they were sent to. Once in a home, they would spend two to three hours cleaning carpets, following their script precisely, and calling their manager throughout the demonstration to talk about the possibility of a sale. The manager could then authorize various discounts off the Kirby vacuum list price of $2,500. They were encouraged to get leads on possible buyers but not allowed to follow up on them: they had to turn over all phone numbers to the company.

These alleged facts are a key part of the case, which hinges on whether or not Smith and Dixon were independent contractors. They said they weren’t told they were at the time of hire. And they weren’t told the first time they asked about, and were denied, their paychecks. But the second time a promised payday came and went, after about three weeks, SZ told them they were independent contractors and not guaranteed a salary.

As for the guaranteed $500 for 15 weekly demonstrations, Smith and Dixon said they were never allowed to reach 15 per week.

They may have been “independent contractors” in name, but with no ability to make their own appointments or contacts, set their own schedules, negotiate their own prices, or even use their own words when talking to customers, they were anything but independent, Bhandary-Alexander argued.

Mom Loses

Smith and Dixon said they were both encouraged to sell vacuums to their family and friends and to hand over lists of such contacts to the company. Smith sold one to his mother. With manager-approved discounts, including a trade-in for her brand-new Eureka vacuum, she bought the Kirby for $1,500 on a payment plan. Smith was given $200 for closing the deal but he later had to give it back when his mom couldn’t keep up with the monthly payments. She had to return the Kirby, but she never got her brand-new Eureka back, he said.

Later, when Smith shadowed a manager on a sales call, the manager offered to sell a Kirby vacuum to someone, not for $1500, but for only $800. “I’m looking at him like ‘What!?’” Smith recalled.

Thomas MacMillan Photo. Smith and Dixon drove all over southern Connecticut for demonstrations and coupon distribution, using their own cars and paying for their own gas, with no reimbursement. Smith said he was required to drive all the way up to Holyoke, Mass., to make an appearance at a Kirby event honoring Zabka.

Dixon started to notice rapid turnover at the company. Each week he saw new faces in the morning meeting. Old ones disappeared.

After about three weeks, Dixon started listening to the nagging doubts she had been ignoring: “My angel had been talking to me all the time, saying something’s not right.”

Dixon decided she’d “been a fool long enough.” After three weeks without pay, she asked for her wages. She was offered a check for $25. She refused and left.

“You know you’ve been had,” she said. “I worked from Aug. 4th to Aug. 27th and never got a paycheck.”

“I Can’t Do This”

Smith lasted a month. He recalled his last day: trying to sell a vacuum to a 60-year-old man who was taking care of a 102-year-old woman. The man kept saying he had only $5 in the bank. Smith kept calling into the manager, with forced cheerfulness, and asking for discounts on the $2,500 vacuum the man could never afford. Suddenly he realized, “I can’t do this,” he said. “That was my last day.”

Dixon, the lead plaintiff on the case, was the first to start working with New Haven Legal Assistance. Through a complaint to the state Department of Labor, she was able to win some of the wages she said she’s owed, but not all of them.

Bhandary-Alexander said it remains to be seen just how much Dixon and Smith are owed. It depends what the court determines their employment arrangement was and whether they’re awarded double or even triple damages.

The suit alleges that the misbehavior doesn’t stop at the level of SZ Enterprises, but that it’s a result of an overt strategy by the Kirby company, one in which employees are an expendable resource.

“This model is being replicated all over the nation,” said Nofi-Bendici. The complaint alleges that “Kirby is directing and controlling these policies.”

 

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Comments

posted by: question on June 22, 2011  12:59pm

Thomas

Do you have contact info the the New Haven Legal Assistance?  My son worked for Kirby 4 years ago and was in the same situation.  He was there 4 months and only received $100.  Can people add their names to this lawsuit?

posted by: anon on June 22, 2011  2:31pm

“‘You’ll sit here and listen and put a smile on your face,’”

Sounds like my job sans the rap music.

posted by: spo on June 22, 2011  2:33pm

Vac’s have been sold like this for years. In the world of direct sales, let the salesperson beware.
It’s unfortunate that they did not rec. a draw against commission’s but that was something they should have asked for. Doesn’t seem like something to sue for. Learn your lesson and move on. I would suggest that a draw is a very important thing to ask for. The company should be responsible for some financial risk during the training period.

posted by: About Time on June 22, 2011  2:58pm

It"s about time a family member of mine went through the same thing. Only she sold a vacumm to her sister: it was paid off and she still did not receive a commission.

posted by: Cheryl Carbone on June 22, 2011  3:11pm

The Kirby Company tried to get me to work for them a couple of years ago..I knew what a Kirby Vacuum Cleaner was because I ALMOST ended up with one back in 1987…To the tune of $1300!!  Anyway, I went to this tiny little office (I think it was in Middletown), which was extremely unimpressive, and they absolutely DID guarantee a $500 a week Salary plus commissions. I thought the whole thing was questionable, but I went to the “Orientation”.  After THAT, I’d had enough and never went back.  WHO on God’s green earth is going to buy a $1500 vacuum cleaner in today’s economy?! Give me a BREAK!  Plus, the people with enough money to pay for a Kirby have MAIDS! It doesn’t surprise me to find out that they are ripping people off!

posted by: Question on June 22, 2011  3:30pm

My son worked for them for 4 months and during that time found out from someone that has been there for years, those vacuums only cost the company $250.  They then mark it up to whatever price they want.  He sold one for $600, but the boss was mad at him and almost fired him.  After that anyways, he never returned.  They really take advantage of people

posted by: Livesinfairhaven on June 22, 2011  4:19pm

I suffered through the sales pitch as the customer once.  The whole thing was canned and silly.  All I could think about was ‘how am I going to get this kid out of my house?’  I still felt kind of bad for him, he was trying.  The Kirby seems like a good product, but the real price I imagine is $800.  I did not buy the vacuum, but the manager (on the other end of the phone as in the article) was relentless and obnoxious.

posted by: Threefifths on June 22, 2011  4:41pm

But politicians sell us the same line.Can I sue the crooked Two Party System.

posted by: Anon on June 22, 2011  6:16pm

This is an open and shut case of misclassification of employees. It is not even a close call. The CT-DOL could determine this in a second.

So why would Legal Aid get involved beyond presenting to DOL and clawing back on Kirby after DOL determines in the employees’ favor?

I don’t understand the use of limited Legal Aid resources for a class action that it appears any number of private attorneys in the New Haven area would be glad to take on referral from Legal Aid so Legal Aid could do the kinds of cases it is supposed to be doing—non-contingent fee cases for poor people who otherwise would not be able to get a lawyer at all.

Will someone from Legal Aid please answer this? Thank you.

posted by: Anon on June 22, 2011  7:00pm

For a news website to offer itself as a mouthpiece to some pompous barefoot lawyer is unacceptable. 

For example, letting him characterize Kirby Vacuum as somehow distantly, precariously and ever so fractionally connected to Berkshire Hathaway is inexcusable.

Kirby is totally controlled by Berkshire Hathaway, which owns Kirby’s owner, Scott & Feltzer, and, wow, totally controls Scott & Feltzer. Kirby is a division of Scott & Felzter.

Berkshire is a holding company and controls its subsidiaries. This is not some tiny investment in minority ownership for Berkshire. Scott & Felzter is a subsidiary of Berkshire Hathaway and is in every single one of Berkshire’s quarterly and annual reports.

And yes, Berkshire has let Scott & Felzter run down the Kirby name so badly that it might not recover. They should have ditched the door-to-door marketing years ago.

It is not advantageous to play up Buffett’s ultimate responsibility for Scott & Felzter for this lawsuit, which is not a lawsuit that has many worries, but still, one does not work against one’s interests, even if one’s interests are sure to be a slam dunk as this case will be.

It is up to your news website to get it right, independently. I am really tired of NHI being irresponsible and lowering its standards. It seems like every week there is something like this, stuff any newbie reporter would check, or not hide, as in the Jewu Richardson story. 

I would have liked to see their characterization of Kirby’s Berkshire relationship side by side with neutral research performed by NHI.

What he said was like saying “a buffett firm does have a distant ownership stake in Geico’s motorcycle insurance division” Really, a “buffett firm” that’s rich.

NHI, yYou’re more and more just a mouthpiece and I am tired of it.

With the Jewu Richardson story, I am not even sure I can believe anything you write. I am not sure anymore that you are an unwitting mouthpiece.

posted by: Anon on June 22, 2011  9:30pm

Is part of the impetus for staff to take on this class action to raise funds for New Haven Legal Assistance in the form of attorney fee award?

What about the opt-out class, what if more than 50-percent of the individuals in that class live above the poverty line?

Again, why isn’t this a case that would be attractive to a private attorney? Berkshire subsidiary is a named defendant with deep pockets, indeed, apparently, Kirby is estimated to be Scott Fetzer’s largest revenue stream, and therefore the largest revenue stream from Scott Fetzer into Berkshire’s coffers.

And no private attorney was willing to take this case on referral from New Haven Legal Assistance?

Finally, does New Haven Legal Assistance accept Legal Services Corp funding? (Not that it would eliminate the questions above if it doesn’t accept those funds)

posted by: Abranda on June 23, 2011  4:04am

I worked for the Kirby Company for 2 Years as a teen. Everything the article says is true. However these people were only there for a month. They suck you in with the $500 bucks a month deal and then you don’t make anything for like two months because you may break your contract by being 5 minutes late or forgetting to wear your tie (these are mandatory in order to get paid without commission)... but if you stick in there and learn the pitches you will start bringing in bank. There are many a time you feel guilty about selling to someone you know can’t afford it but that just shows you do your job well. The sales position’s not for everyone and I learned it wasn’t for me. I later became the office manager and ran the supply store. Albert Archie of Fredericksburg VA Kirby supplied me with a company vehicle, decent pay, a positive attitude and skills to be successful. I didn’t have a person in the world to turn to and was nearly homeless by the age of 18 and the Kirby company provided me with a home, a family, and a feeling of importance when I had nothing. Every sect is different but i can assure you that vacuum is worth every dime. I have one now… only I was smart enough to buy mine off of ebay for 400 bucks…. booyah!!

posted by: William Kurtz on June 23, 2011  10:14am

How great can these vacuums be that they’re worth even $400?

posted by: Walt on June 25, 2011  7:11am

Same system was used by Hoover vacs 60 years ago with area headquarters next to the old Howard Theatre, and a stand next to the first floor elevators at the old Malley’s

If they win can I sue or is there a statute of limitations involved?

posted by: Anon on June 26, 2011  7:20pm

Dead silence from New Haven Legal Assistance on the feasibility of a private lawyer taking this case - why not turn over to one, or why not attractive to private counsel. No answer. That’s accountability?

posted by: Jones on June 27, 2011  11:33am

I applied for a job with this company in Milford and didn’t like they way they were doing business. The interviews are quick, they don’t ask anything about your employment back ground except for what you place on the application. The interviewer is a sales person selling the job to the applicant. Bad Sign. And they don’t tell you that is a commission based job.

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