- Flowers Foods disclosed in a securities filing on Wednesday the Department of Labor would review the company's compliance to the Fair Labor Standards Act.
- The bakery, which owns Wonder Bread and Sunbeam among other bread lines, is battling 23 lawsuits from drivers disputing their "independent contractor" status. However, the company could not comment on the reasons for the review since it is confidential.
- The independent contractor labor classification has cost several distributors millions of dollars over the past year. As a result, the Department of Labor drafted controversial guidelines to distinguish "independent contractors" from employees.
The ongoing legislation and upcoming Department of Labor review of Flowers Foods' labor practices has the potential to transform distributors' business models and embolden drivers, if the department rules against the company.
The precedent over the last year does not appear to favor the company, either: last year, FedEx paid $228 million in a settlement with drivers; and the department of labor's guidelines favor a broad interpretation of employment to include workers whose economic realities lead to dependence on the company. The guidelines provide several relatable examples of the department's decision making process throughout the document.
However, the company argues drivers are exempt from the Fair Labor Standards Act since they engage in interstate commerce and the independent contractor model has been upheld by courts in previous cases, the Wall Street Journal reports. The company has used independent drivers for over three decades.