Coyle v. Holsum Bakery, Inc. and Flowers Foods, Inc. et al. is a collective action and putative class action lawsuit brought on behalf of a class of individuals who operate(d) as fresh bakery product distributors for defendants Flowers Foods, Inc. and Holsum Bakery, Inc. who work for Holsum in Arizona. Defendants employ “distributors” in 31 states throughout the southern and eastern United States to deliver bakery and snack food to their customers, which include grocery stores, mass retailers, and fast food chains. Distributors also stock products on store shelves and assemble promotional displays designed and provided by Flowers.
The lawsuit alleges that during the past several years, consolidation and changes in the grocery industry have led Flowers Foods to change the way they do business. Flowers and its local bakeries have negotiated detailed sales contracts with every grocery chain and food service account. As a result of these sales contracts, Flowers and its subsidiaries control every aspect of the distribution process—price, quantity, service levels, sales, advertisements, promotions, marketing, stale product handling, delivery procedures, discipline, customer service, and more. Consequently, Defendants dictate virtually every aspect of how distributors perform their jobs. Distributors are not independent businesses but employees serving only one master: Flowers Foods.
In addition to denying distributors the ability to manage a profit or loss, the job requirements imposed by the company has increased the workload of distributors so that each is required to work 50 to 55 or more hours per week. In recognition of distributors’ status as employees, the local bakeries subsidize each distributor to take two weeks’ vacation time, provide substitute distributors when a distributor is unable to work, and make “market support” available to distributors whose sales fall below a certain threshold. Additionally, the defendants classify most (but not all) distributors as statutory employees under the federal tax code, which means that Flowers pays Federal Insurance Contributions Act (FICA) payroll taxes on behalf of each Distributor and make tax withholdings. Despite treating distributors like employees in almost every other respect, Flowers and its bakeries do not pay overtime premium pay as required by federal and state laws.
Due to the misclassification of their position, Plaintiffs allege violations of the Federal Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201, et seq.; the Arizona Wages and Labor Laws, A.R.S. §§ 23-350, et seq. This action challenges both the classification of distributors as independent contractors and Defendants’ denial to Plaintiffs and the Class of the rights, obligations, privileges, and benefits owed to them as employees (including overtime, pension and other benefits).