Established almost 100 years ago in Thomasville, Georgia, Flowers Foods has grown into one of the country’s most successful bakery goods companies, owning such brands as Wonder Bread and Nature’s Own. Its legacy is currently under threat, however, as it faces nearly two dozen lawsuits as well as an investigation by the federal government.
The problems stem from Flowers Foods’ employment practices. As detailed in The Wall Street Journal, “The bakery faces lawsuits in various states brought by delivery drivers who allege the company violated the [Fair Labor Standards Act] by misclassifying them as independent contractors, causing them to miss out on overtime pay, benefits, and other compensation given to employees.”
Ultimately, Flowers Foods could be compelled to pay more than $1 billion for back wages, fines, health care, and other considerations.
FedEx and Uber under scrutiny, too
The Fair Labor Standards Act (FLSA) was established in 1938 as a means to guarantee employees in all industries certain protections with regard to minimum wage, overtime pay, and related concerns. Employees, however, is the key word. In most cases, the FLSA does not cover subcontractors and independent contractors. As such, many businesses go to extensive and creative lengths to classify their workers as contractors rather than as true employees.
A number of companies have lately come under scrutiny for illegally misclassifying workers. FedEx and Uber, for example, have recently agreed to pay hundreds of millions of dollars to settle lawsuits levied by their drivers.
Who is an employee? And who is a contractor?
The federal government provides guidance with regard to whether a worker should be classified as an employee or a contractor. If the work done is integral to the employer’s business, if the worker is employed on a permanent or indefinite basis, if the employer has a high degree of control over the worker’s hours and rates – it’s likely that the worker is an employee.
It seems clear that, in light of the regulatory criteria, Flowers Foods drivers deserve to be treated as employees. But it seems the baker will try to stand its ground. “In the past few years, independent distributor models in general have been challenged…Flowers has some distributor lawsuits and so do others in the baking industry,” said one of the company’s executives. “We do not believe the lawsuits have merit and we’re vigorously defending our independent distributor model.