Facts

Daniel Ludlow and William Lancaster filed a class action complaint against Flowers Foods Inc., Flowers Bakeries LLC., and Flowers Finance LLC. for wage-and-hour violations among other causes of action. Defendant Flowers Foods is a national bakery company behind several well-known brands including Wonder Bread and Nature's Own.

Defendant Flower Food's wholly-owned subsidiaries enter into distributor agreements with independent franchisee distributors who then distribute the baked goods from defendant Flowers' warehouses to retail locations in the territory within which they purchased distribution rights.

However, according to plaintiffs, defendants represented a different modeling system than what actually occurred. Rather than taking title to Flowers' products and reselling them to retailers, plaintiffs alleged they merely delivered the products for a commission based on the wholesale price for sales that Flowers itself negotiated, made, and controlled. Accordingly, plaintiffs contended that defendants misclassified their delivery drivers as independent contractors instead of employees, asserting claims for failure to pay overtime, unlawful deductions from wages, failure to indemnify for necessary expenditures, and failure to provide proper wage statements.

Settlement Discussions

The parties attended three mediation sessions with retired judge, Honorable Herbert Hoffman, before reaching a resolution.

Result

the case settled for $55 million in non-reversionary cash up front to all participating class members. Also, a territory buyback for all current distributors resulting in defendant Flowers paying class members--both settlement class members and distributors opting out of the settlement but covered by an injunctive relief--collectively, another approximately $64.2 million net, after resolving (and deducting) amounts owed by class members on notes or loans from their territories. Finally, defendant Flowers will discontinue its independent distributor program in Calfiornia, instead offering route employment positions with compensation estimated between $78,000 to $99,000 per year, plus extensive benefits. Also, the settlement includes a territory buyback fund for all current distributors resulting in defendant Flowers paying those distributors, collectively, another approximately $64.2 million net, after also resolving approximately $16 million owed by those class members on notes or loans from their territories.