Employee or Independent Contractor?

Flowers Foods Settles Another Misclassification Case

Wonderbread

From JDSupraRichard Reibstein reports that Flowers Foods, maker of Wonder Bread and other baked goods, settled another misclassification case with distributors. Richard writes:

BAKING COMPANY’S SECOND SETTLEMENT WITH DISTRIBUTORS IN TWO MONTHS IN IC MISCLASSIFICATION CASES COST $21.6 MILLION.  Flowers Foods, Inc., which makes Wonder Bread, Tastykake, and other brands of baked goods, has settled yet another independent contractor misclassification case with distributors that purchase distribution rights to sell and distribute such bakery products to retail stores. The settlement in this case was for $8.3 million covering distributors in North Carolina, and the one in April was for $13.3 million for distributors in Pennsylvania, Maryland, and New Jersey.  Flowers Foods has settled similar lawsuits in the past for another $18 million: $9 million covering distributors in Alabama, Kentucky, Texas, Mississippi, Tennessee, Virginia, and Missouri, and before that for $9 million in yet another case involving North Carolina distributors.

According to the complaint in the most recent case that Flowers Foods has settled, the distributors alleged that they were required to arrive at specified warehouses at specified times to stock their vehicles with the company’s products; delivery was expected to be made to customers at the times and places determined by the company; and the distributors had no ownership or entrepreneurial influence over their day-to-day activities, including sale prices, shelf space at retail locations, orders, product selection, and work schedules. The company denied the allegations and contended that the distributors are responsible for controlling the manner, method, and means of performance of their distributorship services. The most recent settlement not only includes payments to settlement class members, service awards to each of the named plaintiffs, and attorneys’ fees and costs, but also additional payments to each of the current distributors who elect to arbitrate applicable disputes; a Buy Back Option where settlement class members who are current distributors may be eligible to have their territories repurchased by the company; creation and staffing of a Distributor Advocate position to oversee an internal, alternative dispute resolution process for independent distributors; and the creation of a distributor review panel regarding contract-related disputes. Rosinbaum v. Flowers Foods Inc., No. 16-cv-00233 (E.D.N.C. May 12, 2020).

Source: May 2020 Independent Contractor Misclassification and Compliance Law News Update | Locke Lord LLP – JDSupra

Back to Top