Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Rosinbaum v. Flowers Foods, Inc.

United States District Court, E.D. North Carolina, Southern Division

March 1, 2017

BOBBY JO ROSINBAUM and ROBERT WILLIAM MORGAN, JR., individually and on behalf all similarly situated individuals, Plaintiffs,


          LOUISE W. FLANAGAN United States District Judge.

         This matter is before the court on plaintiffs' motion to certify conditionally the case as a class action pursuant to the Fair Labor Standards Act of 1938 (“FLSA”), 29 U.S.C. § 201, et seq., (DE 22), and plaintiffs' motion to compel production of documents. (DE 108). Plaintiffs' motion for conditional certification is granted as set forth herein. Plaintiffs' motion to compel production of documents is held in abeyance until further notice of the court.


         Plaintiffs, claiming they have been misclassified as independent contractors, commenced this action in the U.S. District Court for the Western District of North Carolina December 1, 2015, seek unpaid overtime under the FLSA on behalf of themselves and others similarly situated. The case was transferred to this district June 27, 2016. Following a period of discovery, which remains ongoing, plaintiffs filed the instant motion to certify conditionally the case as a collective action pursuant to the FLSA. 29 U.S.C. § 216(b).[1]

         Defendant Flowers Foods, Inc. (“Flowers”) is the parent holding company for a network of bakeries engaged in nationwide manufacture and sale of baked goods, marketed under various brands including Nature's Own, Cobblestone Bread Company, Roman Meal, Wonder, Home Pride, Bunny Bread, Sunbeam, Dave's Killer Bread, TastyKake, and others. Defendant Franklin Baking Co., LLC (“Franklin”), a Flowers subsidiary, is one such bakery. Franklin bakes Flowers's products and oversees product distribution in North Carolina and South Carolina. Plaintiffs work for Franklin, delivering Flowers's products to retail customers pursuant to a distributor agreement executed by plaintiffs and Franklin. Uniformly, Franklin classifies its distributors as independent contracts and does not pay overtime wages.

         Plaintiffs move the court to certify conditionally a FLSA collective class, pursuant to 29 U.S.C. § 216(b), to include all persons who are members of the proposed class described as follows:

All persons who are or have performed work as “Distributors” for Defendants under a “Distributor Agreement” with Franklin Baking Company, LLC or a similar written contract that they entered into during the period commencing three years prior to the commencement of this action through the close of the Court-determined opt-in period and who file a consent to join this action pursuant to 29 U.S.C. § 216(b).

         Defendants oppose the motion on the ground that the distributor agreements at issue confer considerable discretion upon distributors to manage their distributorships and numerous distributors, in fact, exercise that discretion. Accordingly, they argue that individuals embraced by plaintiffs' proposed class definition are not “employees similarly situated” as required to certify a class under the FLSA. Additionally, defendants propose that, if class certification is granted, the class should include only those distributors who operated out of the same warehouse in Wilmington from which plaintiffs operated. Finally, defendants oppose the form of proposed notice to potential class members on grounds that it contains typographical errors, inaccurately summarizes plaintiffs' prayer for relief, and contains other deficiencies.

         In support of their motion, plaintiffs rely upon contracts executed between plaintiffs and defendants, termed “distributor agreements, ” which specify the scope of each party's duties as it relates to distribution of defendants' products. In addition, plaintiffs rely on their own declarations and deposition testimony from defendants' executives. In opposition, defendants rely on the same evidence, and, in addition, deposition testimony from other distributors who worked for defendant Franklin.

         In their motion to compel, plaintiffs seek to classify Allen L. Shiver (“Shiver”), president and chief executive officer of defendant Flowers and Bradley K. Alexander (“Alexander”), the executive vice president and chief operating officer of Flowers, as custodians of electronically stored information as contemplated in the stipulation and order regarding production of electronically stored information and paper documents. (DE 82). Practically speaking, this would require Shiver and Alexander to produce certain documents including e-mails and other information related to Flowers's distributorship program. In support of the motion, plainitffs rely upon e-mails evidencing that Shiver and Alexander were involved in setting company policy related to Flowers's distribution network.


         The facts as disclosed by the evidence of record may be summarized as follows. Flowers develops and markets bakery products for sale and distribution through a network of subsidiaries. Franklin, a subsidiary of Flowers, bakes the products that Flowers develops and oversees local sales and distribution within its designated geographic region.

         Under defendants' business model, Flowers's subsidiaries, including Franklin, engage laborers pursuant to distributor agreements to deliver defendants' products to retail stores. Retailers include a range of outlets from large chain grocery stores, to fast food chains, to small shops. Defendants' distributor agreements are not all identical; however, certain features of the distributor agreements are always the same. (See Rich Dep. 162:17-20, DE 103-8 (“[W]hen you look at different versions of the distributor agreement, there are only minor changes.”) For example, all distributor agreements are structured as a sale of property rights granting to the buyer/distributor an exclusive license to market and sell defendants' products to retailers within a defined territory. Under this arrangement, when a distributor places an order with Franklin for a certain quantity of product, Franklin makes that quantity of product available and sells it to the distributor at a specified discount below the manufacturer's suggested retail price (“MSRP”). The difference between the MSRP and the discount price is known as the “margin, ” and a distributor's profit constitutes the margin less cost of distribution. Theoretically, this system promotes economic efficiencies where it places directly upon distributors an incentive to increase their profits by reducing distribution costs.

         The laissez-faire nature of foregoing arrangement is tempered by provisions of the distributor agreements imposing various affirmative duties upon distributors and vesting in defendants a degree of opportunity to supervise distributors' conduct. In particular, clauses requiring distributors to act in accordance with “good industry practice” in handling defendants' products and to use “best efforts to develop and maximize the sale” of defendants' products grant to defendants at least a modicum of opportunity to oversee downstream implementation of product sales. Distributors must maintain adequate stock at retail outlets, retrieve stale products, charge uniform prices to “major and [c]hain accounts” (defined as retail customers operating more than one outlet), and limit operations to a defined territory.

         Additionally, distributors are required to use a handheld computer to track deliveries, quantities of unsold product, and other local market information. Notably, the parties dispute the extent to which defendants use this device to exert direct control over distributors' workflow - defendants contend the handheld computer serves information-gathering purposes only while plaintiffs contend defendants use it to relay strict instructions even if such instructions are cast as informal suggestions.

         In addition to requirements described above, the distributor agreements also purport to afford distributors a measure of discretion in operating a distributorship. For example, so long as they effectively serve customers, distributors may set their own work hours, choose an order in which to serve customers, set procedures for interacting with customers, and solicit new customers. Distributors may engage in various forms of advertising by handing out business cards, requesting promotional displays, and negotiating with customers to allocate shelf space. Finally, distributors may promote other efficiencies by trading territory with other distributors, employing helpers, or ordering defendants' products based on independent judgment rather than following suggested guidelines.


         A. Conditional Class Certification

         The FLSA requires overtime pay for “employees . . . employed in an enterprise engaged in commerce[.]” 29 U.S.C. § 207. The FLSA “broadly” defines these terms. McFeeley v. Jackson Street Entertainment, LLC, 825 F.3d 235, 240 (4th Cir. 2016) (providing that an “employee” is “any individual employed by an employer[;]” an “employer” is “any person acting directly or indirectly in the interest of an employer in relation to an employee[;]” and “employ” means “to suffer or permit to work”).

         To determine whether an individual qualifies as an “employee” under the FLSA, the court must consider the “economic realities” to determine whether the individual is “economically dependent on the business to which he renders service or is, as a matter of economic reality, in business for himself.” Schultz v. Capital Intern. Sec., Inc., 466 F.3d 298, 304 (4th Cir. 2006). In turn, courts consider six factors to ascertain the economic realities for a given relationship between a worker and a business, including:

(1) the degree of control that the putative employer has over the manner in which the work is performed;
(2) the worker's opportunities for profit or loss dependent on his managerial skill;
(3) the worker's investment in equipment or material, or his employment ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.