Flowers Foods Distributors Win Class Certification

Current and former bakery distributors for Flowers Baking Company of Jamestown recently won class certification in the Flowers Foods FLSA Litigation.

Current and former bakery distributors for Flowers Baking Company of Jamestown recently won class certification in the Flowers Foods FLSA Litigation. Rehberg et al v. Flowers Foods, Inc. et al is a collective and class action lawsuit brought on behalf of a class of individuals who operate or operated as fresh bakery product distributors for Defendants Flowers Foods, Inc. and Flowers Baking Co. of Jamestown, LLC. Defendants employ these “Distributors” to deliver bakery and snack food to their customers, which include grocery stores, mass retailers, and fast food chains, and stock the products on the shelves. Defendants currently classify all Distributors as independent contractors despite the fact that they control most aspects of the Distributors’ jobs. Specifically, Defendants require distributors to perform their duties in accordance with “good industry practice,” a standard Defendants define in detail. In addition, Distributors’ opportunities for profit and loss are limited by Defendants’ control over product selection, pricing, and marketing.  Defendants also explicitly define each Distributor’s delivery route and stops.

Based on Defendants’ treatment of Distributors as employees, Plaintiffs brought claims against Defendants to recover certain benefits and privileges they have been denied based on their classification as independent contractors. Specifically, Plaintiffs allege failure to pay wages for all time worked, failure to pay overtime, and unlawful wage deductions, under the North Carolina Wage and Hour Act (“NCWHA”) and failure to pay overtime premium pay in violation of the Fair Labor Standards Act (“FLSA”). In October 2014, Plaintiffs moved for class certification of the NCWHA class, while Defendants moved to decertify the FLSA collective group. On March 24, 2015, the District Court for the Western District of North Carolina granted Plaintiff’s motion for class certification and denied Defendants’ motion for decertification. 

Before a class action can proceed to trial, the court must certify the proposed class of plaintiffs pursuant to Rule 23 of the Federal Rules of Civil Procedure. In other words, the court must find that the claims are suitable for adjudications on a class wide basis. This requires that the court consider a number of factors including whether there is a sufficient number of plaintiffs to justify a class action, whether the plaintiffs and class counsel are adequate representatives, and whether the claims brought by the plaintiffs are typical of the larger class. In addition, the court must determine that there is common evidence that can be used to prove the claims on a class wide basis.  This is referred to as the Rule 23 “commonality” requirement. Commonality is a significant hurdle to overcome, particularly in employment class actions because employment practices often vary within organizations. In granting class certification here, the Court acknowledged that Defendants cited to “differences between the employment relationships of various distributors,” but went on to conclude that, “the differences are not so great to destroy commonality.” The court further reasoned:

“Here all distributors were instructed to carry out their jobs subject to the Distributor Agreement, had substantially similar job duties, were subject to a common policy of being classified as independent contractors, and now claim violations of the NCWHA based on this classification.”

In its March 24 order, the Court also denied Defendants’ motion for decertification of the FLSA collective group. Certification of FLSA claims is not subject to the Rule 23 analysis, but instead requires that the plaintiffs bringing the action are “similarly situated” to the members of the proposed collective group. FLSA collective action certification proceeds in two phases. First, the plaintiffs seek conditional certification of the collective group for the purpose of allowing potential class members to “opt in” to the litigation. Then, usually after more discovery has been completed, Defendants may move to decertify the collective group, which would prohibit the FLSA litigation from moving forward as a collective action.  Here, the court granted conditional certification in March 2013.  In response to Defendants’ motion to decertify the collective group, the court explained that Defendants “exaggerate isolated differences among the distributors and ignore the larger picture of the issues at hand—that all distributors are subject to Defendants’ uniform policies.” The court concluded: Plaintiffs produced “significant common evidence” to determine on a collective basis whether all Distributors are employees or independent contractors; any alleged individualized defenses do not “overwhelm the ‘similarly situated’ analysis”; and that “the interests of judicial and procedural economy, [and] fairness … support moving forward with this action collectively.” Accordingly, the Court denied Defendants’ motion for decertification.

 As a result of the Court’s order, the Plaintiffs can proceed with their NCWHA and FLSA claims on a class and collective basis, respectively. This is a significant victory for Distributors whom have been denied the benefits and privileges of employment, despite being treated as employees for years.