Settlement Reached in Coyle v. Flowers Foods and Holsum Bakery

April 17, 2018 – After more than two years of hard-fought litigation—including significant written discovery, document production, and depositions, numerous discovery disputes and hearings, and two extensive in-person mediation sessions—the parties have reached a settlement in the Arizona wage and hour class action lawsuit of Coyle v. Flowers Foods, Inc., and Holsum Bakery, Inc. This case is one of six independent contractor misclassification lawsuits filed against Flowers Foods across the country. Baillon Thome Jozwiak & Wanta LLP serves as Lead Class Counsel in all six lawsuits.

On July 20, 2015, Plaintiff Terry Coyle, a distributor for Holsum Bakery in Arizona filed an action on behalf of himself and a putative class of distributors against defendants Holsum Bakery and Flowers Foods. Colye asserts the companies violated Arizona wage and hour laws by improperly classifying distributor-drivers as independent contractors rather than employees. The lawsuit seeks damages for unpaid overtime under the federal Fair Labor Standards Act (FLSA) and unlawful wage deductions under Arizona wage and hour laws.

The settlement in Coyle creates a $1.17 million settlement fund, which will compensate each class member for all deductions made during the recovery period and fully compensate each opt-in plaintiff for 100% of the unpaid overtime owed.

The settlement also provides non-monetary relief in the form of significant changes to the independent distributor program. These non-monetary terms include, but are not limited to: the creation of a distributor advocate, who will oversee an internal, alternative dispute-resolution process for distributors; the formation of a distributor review panel, which will provide for an internal review process for resolution of contract-related disputes; the formalizing of distributors’ rights, so that effective discussions may be had with appropriate management personnel within their accounts who have the authority to engage in discussions regarding items such as product placement and days of service; and a process through which distributors can raise issues such as non-profitable accounts with Holsum.

Most importantly, all current distributors will sign a new distributor agreement with Holsum that contains significant enhancements to the distribution model. The new distributor agreement contains an arbitration provision, which settlement class members have an opportunity to opt out of at their discretion. This provision will allow distributors to resolve applicable disputes with the Company, at the Company’s expense.

The Final Approval Order was signed on March 23, 2018. The Qualified Settlement Fund was funded on April 6, 2018. Holsum will send out new distributor agreements. These new agreements must be signed by April 23, 2018. According to the schedule for settlement, the distribution of settlement checks will be sent out by May 23, 2018 and will not expire until November 19, 2018. In the event that there are unclaimed funds, the parties will decide if a second round of distribution is needed.

The Unopposed Motion for Final Approval can be found below.