Flowers Foods Leaves Bad Taste for Distributor Drivers

Santa Clara, CAA California federal judge ruled that Flowers Foods Inc. misclassified its distributor drivers as independent contractors and drivers can go ahead with overtime claims against the second-largest commercial bakery in the US (whose brands include Wonder Bread, Tastykake, Sunbeam, and Nature’s Own). It has a track record of misclassification lawsuits nationwide: in October 2021 the company agreed to pay $20 million to resolve nearly six years of Fair Labor Standards Act litigation involving more than 50 delivery drivers in Maine, and that’s not all. No wonder the cost of bread has gone up – it can’t put all the blame on the pandemic.

Flowers Foods Defense – Interstate Commerce

Flowers Foods argued that they should be excluded from overtime pay and breaks under regulations for interstate drivers --regardless whether they can prove misclassification-- as two orders in 2001 and 2002 from the California Industrial Welfare Commission found that interstate drivers exempted from overtime under federal law are also overtime-exempt under California's law. 

As well, the second-largest commercial bakery in the US (whose brands include Wonder Bread, Tastykake, Sunbeam, and Nature’s Own) argued that the workers were franchisees and that they weren't subject to the ABC test for determining whether a worker is an independent contractor or employee. (The ABC test was introduced in 2018 by the California Supreme Court's decision in Dynamex Operations West Inc. v. the Superior Court of Los Angeles County. Under the test, a worker is considered an employee unless a company can demonstrate the worker is free from its control, performs work outside its line of business and operates as an independent firm.)

Thirdly, Flowers Food argued that meal and rest break claims should also be dismissed based on a decision by the Federal Motor Carrier Safety Administration because the drivers are engaged in interstate commerce. The FMCSA in December 2018 found that California's meal and rest break rules are preempted when applied to interstate drivers who operate vehicles covered by the administration's hours-of-service regulations. As for the FMCSA findings, drivers said Flowers Foods is not a registered motor carrier with the FMCSA and "no federal law aims to alleviate baking companies subject to manufacturing wage orders from state employment tests and meal [or] rest obligations" and therefore the ABC test applied to them.

Judge Robinson Weighs In

Regarding the ABC test argument, Judge Robinson said that determining whether the drivers engaged in interstate commerce "is a highly factual inquiry…the parties purportedly could agree to only a handful of undisputed material facts”, such as determining to whom the producing bakery intends to deliver its products, reported Law360. And because the bakery couldn’t establish that the drivers' deliveries "were part of a practical continuity of movement across state lines" Judge Robinson said that summary judgment is not appropriate.

Judge Robinson also rejected Flowers Foods' argument that the court should ax "unmanageable" claims that the drivers brought under the Private Attorneys General Act, a California law that allows workers to file labor violations on behalf of other workers and the state. Further, because Flower Foods could not identify how many distributors would be included under the PAGA claims, Judge Robinson said that the court wouldn’t be able to figure out whether they actually are unmanageable.

More Flowers Food Misclassification Settlements

In a similar claim, the bakery settled in June 2020 an IC misclassification class and collective action under the FLSA misclassification case in Vermont for $7.6 million. (IC Diagnostics is a process that examines whether a group of workers not being treated as employees would pass the applicable tests for independent contractor (IC) status under governing state and federal laws, and then offers a number of practical, alternative solutions to enhance compliance with those laws.) In December 2015 the distributors filed a class and collective action complaint claiming the bakery misclassified them as independent contractors and not employees. The distributors alleged in their lawsuit that they were required to arrive at specified warehouses at specified times to stock their delivery vehicles with product; were responsible for delivering products to customers at times and locations specified by the company; and had no entrepreneurial influence over their day-to-day activities, including sale prices, shelf space within stores, orders, product selection, schedules, and delivery locations.

And there’s more. JDSupra reported that the baking company, in two months prior to the Vermont settlement, also settled two other IC misclassification cases totaling $21.6 million. And Flowers Food settled similar lawsuits in the past for another $18 million covering distributors in Alabama, Kentucky, Texas, Mississippi, Tennessee, Virginia, and Missouri, and before that for $9 million in another case involving North Carolina distributors.