Certification Of Alleged Misclassified Bakery Distributors Denied Due To Predominance Of Individualized Issues

by Jackson Lewis P.C.
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Class certification would have been granted in Soares v. Flowers Foods, Inc., 3:15-cv-04918 (N.D. Cal., June 28, 2017), but for the allegedly misclassified independent contractors’ decision to deliver, or not deliver, the goods themselves.

In Soares, the named plaintiffs sought to represent a class of truck drivers who were paid to distribute baked goods manufactured by Flowers Foods.  Plaintiffs filed suit in October 2015, alleging that Flowers Foods misclassified them as independent contractors and failed to reimburse them for business expenses, failed to provide meal or paid rest periods, and made improper deductions from their compensation, among other things. The distributors all signed a Distributor Agreement that purported to establish an independent contractor relationship and set forth details about how the baked goods must be distributed.  The distributors claimed that they were actually employees, not independent contractors, and asserted violations of California wage and hour laws.

Magistrate Judge Corley ruled that the four requirements to certify a class pursuant to Fed. R. Civ. P. (“FRCP”) 23(a) were met: (1) typicality, (2) commonality, (3) numerosity, and (4) adequate representation.

However, Judge Corley denied class certification pursuant to FRCP 23(b)(3) because in the substantive independent contractor/employee misclassification analysis, the individual issues clearly predominated over the common issues. In California, the common law test to distinguish between employees and independent contractors focuses on the purported employer’s “right to control the manner and means of accomplishing the result desired,” S.G. Borello & Sons, Inc. v. Dep’t of Indus. Relations, 48 Cal.3d 341, 350 (1989).  Thus, Judge Corley found the “right to control” was subject to common proof under the Distributor Agreement.

However, S.G. Borello also set forth nine secondary factors to determine an employment relationship.  One of the nine factors was so “riddled with individualized inquiries,” that it predominated over the common issues, namely, “whether the individual performing services is engaged in a distinct occupation or business from the alleged employer.”  Judge Corley evaluated the class members’ business operations, such as whether they contracted with other companies besides the alleged employer, or hired sub-drivers to do the work, to determine whether the distributors were engaged in distinct work from each other or the alleged employer.  The Court found a wide variety of business arrangements among the distributors, in whether they also provided delivery services for other companies, or hired sub-drivers to perform their routes.  For example, Judge Corley stated there would need to be “mini-trials” into the distributors’ recollections of how often they personally serviced their routes, and when and how often, if at all, they provided distribution services for other companies. These factual questions of whether the distributors were engaged in the same, or distinct business from the alleged employer, were ultimately too individualized for common resolution, thus defeating class certification.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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