Labor & Employment Law

Who's The Bimbo Here? Another Class Action Focusing On Independent Contractor.

By Mark Tabakman

Bimbo Bakeries has been hit with another wage-hour collective action in which the allegation is that the delivery drivers claim they have been classified as independent contractors, when they are really employees.  They seek wages and the employment benefits they would be due as statutory employees.  The drivers also allege that the company makes them pay for the trucks and the rights to distribute the products. The case is entitled Scott et al. v. Bimbo Bakeries USA and was filed in the Eastern District of Pennsylvania.

Bimbo Bakeries manufactures Thomas' English Muffins, Entenmann's and a host of other products.  The complaint alleges that the company has imposed an 'unlawful and unconscionable' distribution agreement on the drivers.  The complaint also contends that although the company exercises significant control over the manner and means of the delivery business, it nevertheless deems them to be independent contractors to cut down on company business expenses, at the same time transferring many of these business expenses to the drivers.

In this regard, the workers allege that Bimbo has illegally transferred the obligations of purchasing and maintaining trucks and equipment to them and that they are, in essence, really subsidizing the company operate its business.  The workers contend that, through this contrivance, Bimbo has avoided all state and federal employment taxes, workers' compensation and unemployment compensation obligations.  The company's answer to these issues has been to compel the drivers to pay those business costs themselves.

They also charge that the unfair and skewed distribution agreement compels the delivery drivers to purchase the distribution rights for an area, at the same time the company is maintaining rights over the distribution.  The company takes monies out of the plaintiffs' compensation for the truck payments, gasoline, payments for computers, insurance and other business expenses.

There are approximately sixty (60) alleged members of the class; the plaintiff who filed the suit worked in Mt. Laurel, New Jersey.  Bimbo, however, maintains many depots throughout the country and it is alleged that the same policies are in effect at these other locations.  In other words, the specter of a nationwide class action now may be baking in the oven for this company.

In any independent contractor analysis, the two crucial analyses are whether the putative employer exerts control and whether the worker is in an independently established business.  From the allegations in the complaint (and that is all they are at this point), it may be that too much control is exerted.
 

Full post as published by Wage & Hour - Development & Highlights on July 07, 2010 (boomark / email).