Another class action certification has been won by distributor-drivers who claimed they were misclassified as independent contractors and denied overtime pay. The distributors fought hard in their ongoing unpaid overtime compensation lawsuit against their employer, Flowers Foods, with the court noting that the control Flowers had over the drivers was susceptible to misclassification on a class-wide basis. 

A federal court in Eastern District of Pennsylvania has certified several classes of delivery drivers in an overtime lawsuit against baked goods retailer Flowers Foods.  The plaintiffs in Matthew Carr et al v. Flowers Foods, Inc. et al, No. 15-6391 (E.D. Pennsylvania, Dec. 1, 2015) were distributor drivers for Flowers who asserted that they had been misclassified as independent contractors rather than employees under federal and state law, and thereby deprived of overtime pay and other wages.

The plaintiffs filed suit individually and for others similarly situated for FLSA violations as well as Pennsylvania Minimum Wage Act (“PMWA”), Maryland Wage and Payment Collection Law (“MWPCL”), Maryland Wage and Hour Law (“MWHL”), New Jersey Wage and Payment Law (“NJWPL”), and the New Jersey Wage and Hour Law (“NJWHL”). The plaintiffs sought to have their claims certified as a collection action, which was granted, and subsequently the defendants moved for decertification. Id. At the same time, the plaintiffs moved the court to have three Rule 23 class actions certified for their state wage claims under the laws of Pennsylvania, Maryland and New Jersey. The Court denied the defendant’s motion to decertify the FLSA collection action. Id. Further, the plaintiffs’ motion to certify the state claims was granted with respect to Rule 23(b)(3) but denied with respect to Rule 23(b)(2). 

With respect to the motion to decertify the FLSA class, the Court found that there were enough similarities between how the drivers were treated to warrant the case proceeding on a collective basis.  In concluding that the plaintiffs’ action could proceed as a collective action, the court looked to some factors, which included:  

“[W]hether the plaintiffs were employed in the same corporate department, division, and location; whether they advanced similar claims; whether they sought substantially the same form of relief; and whether they had similar salaries and circumstances of employment. The plaintiffs could also be found dissimilar based on the existence of individualized defenses.” Zavala v. Walmart Stores Inc., 691 F.3d 527, 537 (3d Cir. 2012).

The court said even though the distributors worked at different warehouses, they were tied to the same corporate department, which was the defendant, whereby all the distributors made money the same way. 

Separately, the plaintiffs moved to certify three class actions for state labor laws. Rule 23(b)(3) class certification is a higher standard, because Rule 23(b)(3)’s predominance requirement required a more rigorous showing than the FLSA’s “similarly situated” requirement. See Reinig v. RBS Citizens, 912 F.3d. 115, 131 (3rd Cir. 2018). “The class action is an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only.” Walmart Stores v. Dukes, 564 U.S. 338, 348 (2011). “To invoke this exception, every putative class action must satisfy the four requirements of Rule 23(a) and the requirements of either Rule 23(b)(1), (2), or (3).” Marcus v. BMW of N. Am., LLC, 687 F.3d 583, 590 (3d Cir. 2012). 

Under Rule 23(a), 

1. the class must be “so numerous that joinder of all members is impracticable” (numerosity); 
2. there must be “questions of law or fact common to the class” (commonality); 
3. “the claims or defenses of the representative parties” must be “typical of the claims or defenses of the class” (typicality); and 
4. the named plaintiffs must “fairly and adequately protect the interests of the class” (adequacy of representation, or simply adequacy). In re Cmty. Bank of N. Va., 622 F.3d 275, 291 (3d Cir. 2010). 

The plaintiffs had to also satisfy one of the subsections of Rule 23(b). Rule 23(b)(3), the primary basis asserted for certification in the lawsuit, “required that (i) common questions of law or fact predominate (predominance), and (ii) the class action is the superior method for adjudication (superiority).” Marcus, 687 F.3d at 591.

First, for factor one under Rule 23(a), the court said that since the plaintiffs identified at least 175 individuals that meet the class, joinder of this many individual claims would be impractical.  Matthew Carr et al v. Flowers Foods, Inc. et al, No. 15-6391 (E.D. Pennsylvania, Dec. 1, 2015). Second, the court said in terms of commonality, the name plaintiffs and all class members worked in the same capacity as distributors, signed “Distributor Agreements,” performed the  same functions, and were subjected to the same policies, so commonality was satisfied. Id. Third, “if a plaintiff’s claim arises from the same event, practice or course of conduct that gives rise to the claims of the class members, factual differences will not render that claim atypical if it is based on the same legal theory as the claims of the class.” Marcus, 687 F.3d at 598. The court said that since the interests of the plaintiffs are sufficiently aligned with the class, their claims are representative of the entire class so typicality was satisfied. Lastly, considering that there is no intra-class conflict to prevent class certification or any derivative conflict of interest that would prevent counsel from fairly and adequately representing the interests of the entire class, adequacy was met. Matthew Carr et al v. Flowers Foods, Inc. et al, No. 15-6391 (E.D. Pennsylvania, Dec. 1, 2015). 

Under Rule 23(b)(3), the class must be currently and readily ascertainable based on an objective criteria. The Court found that the choice of law provision providing for the applicability of Pennsylvania law with respect to the contractual interpretation of the Distributor Agreements did not control the substantive law applicable to the plaintiffs’ claims so, as a result, ascertainability as to all three classes was satisfied. See also Sigala, 2016 WL 1643759, at *5-*6.

Additionally, under Rule 23(b)’s predominance requirement, “when one or more of the central issues in the action are common to the class and predominate, the action may be considered proper under Rule 23(b)(3) even though other important matters will have to be tried separately.” Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036, 1045 (2016). This requirement is met only if the district court is convicted that the essential elements of the claims brought by a class are capable of proof at trial though evidence that is common to the class rather than individual to its members. Reinig, 912 F.3d at 127. If the essential elements of the claim require individual treatment, then class certification is not suitable. 

To prove that the plaintiffs were properly classified as employees under the PMWA and MWHL, the economic realties test, as discussed above, was considered. The court said “the commonalities and uniformities among the plaintiffs that were sufficient for the FLSA claim also demonstrated that common questions predominated in determining employee status here, because the common core of evidence bearing on the employment factors rendered the misclassification claims susceptible to class-wide resolution.” Matthew Carr et al v. Flowers Foods, Inc. et al, No. 15-6391 (E.D. Pennsylvania, Dec. 1, 2015). 

Furthermore, to prove that the plaintiffs were employees under the PWPCL and MWPCL along with the appropriate damages for both, the court specifically looked at the degree of control on a class-wide basis. Based on the “Distributor Agreement” and the defendant’s policies regarding payment, training, and oversight, employment status was proper. 

Lastly, under Rule 23(b)(3), class treatment needed to be ‘superior to other available methods for fairly and efficiently adjudicating the controversy,’ and it provides a non-exhaustive list of factors to consider in determining superiority, including: the class members’ interest in individually controlling the prosecution of separate actions; the extent and nature of any similar litigation already commenced by class members; the desirability of concentrating the litigation in a particular forum; and the difficulties likely to be encountered in the management of a class action.” In re Cmty. Bank of N. Va., 795 F.3d at 408-09 (quoting Fed. R. Civ. P. 23(b)(3)). 

However, under Rule 23(b)(2), class certification is not warranted. Whereas Rule 23(b)(3) certification is appropriate where common issues predominate, Rule 23(b)(2) applies when “the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole.” Fed. R. Civ. P. 23(b)(2). “The key to the (b)(2) class is the indivisible nature of the injunctive or declaratory remedy warranted—the notion that the conduct is such that it can be enjoined or declared unlawful only as to all of the class members or as to none of them.” Shelton v. Bledsoe, 775 F.3d 554, 561 (3d Cir. 2015). 

Unlike in the (b)(3) context, there are no opt-out rights for (b)(2) classes. See Fed. R. Civ. P. 23(c)(2)(B). So, (b)(2) classes must be particularly “cohesive,” meaning that “disparate factual circumstances” must be minimal among class members. Barnes v. Am. Tobacco Co., 161 F.3d 127, 143 (3d Cir. 1998). The plaintiffs include in their certification under (b)(2) as an afterthought, treating (b)(2) as flowing necessarily from (b)(3) certification. However, the two subsections do have different litigation tools, with (b)(3) permitting certification in a much wider set of circumstances than (b)(2). Accordingly, the plaintiffs’ motion to verify the Pennsylvania, Maryland and New Jersey classes were denied with respect to Rule 23(b)(2), but granted with repost to Rule 23(b)(3). 

This case is important because it outlines the complications Court can face when confronted with both federal and state overtime claims, particularly because these laws have different certification rules and standards. Are you a delivery driver that may have been misclassified as an independent contractor and denied overtime pay? If so, consider speaking with an experienced overtime attorney. Josh Borsellino is an experienced overtime attorney that fights for the rights of workers to recover their wages. He offers free consultations and can be reached at 817.908.9861 or 432.242.7118.