Rehberg ex rel. Themselves v. Flowers Baking Co. of Jamestown, LLC
| Decision Date | 23 March 2015 |
| Docket Number | DOCKET NO. 3:12-cv-00596-MOC-DSC |
| Court | U.S. District Court — Western District of North Carolina |
| Parties | SCOTT REHBERG, WILLARD ALLEN RILEY, and MARIO RONCHETTI, On Behalf of Themselves and Others Similarly Situated, Plaintiffs, v. FLOWERS BAKING COMPANY OF JAMESTOWN, LLC, and FLOWERS FOODS, INC., Defendants. |
THIS MATTER is before the court on Plaintiff Mario Ronchetti's Motion for Class Certification (#106) and Defendants' Flowers Baking Co. of Jamestown, LLC ("Jamestown") and Flowers Foods, Inc. ("Flowers Foods") (collectively, "Defendants") Motion to Decertify (#111). Having considered the parties' briefs and oral arguments made on February 11, 2015, as well as the record and applicable law, and for the reasons set forth in this Order, Plaintiff's Motion is GRANTED and Defendants' Motion is DENIED.
Plaintiffs, a group of bakery product distributors for Defendant Jamestown (a wholly owned subsidiary of Defendant Flowers Foods), filed suit on September 11, 2012, alleging violations of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201, et seq., and the North Carolina Wage and Hour Act ("NCWHA"), N.C. Gen. Stat. §§ 95-25.1, et seq. Plaintiffs allege they are misclassified by defendants as independent contractors, as opposed to employees, and are therefore entitled to certain benefits under the FLSA and the NCWHA, namely, time-and-a-halfpay for hours worked in excess of forty (40) per week. Plaintiffs also allege that Defendants made deductions from their wages without written notice, which is unlawful under the NCWHA.
Prior to the filing of the instant motions, Plaintiffs Scott Rehberg, Willard Allen Riley, and Mario Ronchetti moved for conditional certification of the FLSA claims as a collective action under § 216(b), on behalf of themselves and other current and former distributors. The court granted conditional certification on March 22, 2013 regarding such claims for the following class: "all individuals who have or had a distributor agreement with Flowers Baking Co. of Jamestown at any time from September 12, 2009 to the date of this Order and who sign and timely file a consent to join this action pursuant to 29 U.S.C. § 216(b)." (##38, 41). At the time that it granted conditional certification, the court found that Plaintiffs had shown that the putative class members were together the probable victims of a single decision, policy or plan and were similarly situated in that: (1) plaintiffs had the same job duties; and (2) were subject to the same policies and standards determining their compensation and performance requirements. Since the entry of that order, the parties have undergone extensive discovery. Now before the court are the two pending motions regarding the suitability of all claims in this this case as a class action. Plaintiff seeks to certify the NCWHA claims. (#106). Defendant seeks to decertify the FLSA claims. (#111).
Plaintiff Mario Ronchetti is a distributor who delivers Flowers products on behalf of Flowers Foods and Jamestown. Defendants uniformly classify all distributors, including Mr. Ronchetti, as independent contractors, pursuant to a "Distributor Agreement," which all distributors havesigned.1 See (#107-1); Chuck Rich Aff. (#117-17). Flowers is a producer and marketer of packaged bakery foods and is the parent company of approximately 40 subsidiary bakeries throughout the United States, including Jamestown. Rich Dep. (#107-1 at 28.) Jamestown is the entity that enters into Distributor Agreements with distributors (#107-1 at 3) and enforces the terms therein, while Flowers establishes the policies and procedures that Jamestown and its distributors must employ.
The distributor position at issue in this case entails picking up Flowers bakery products from one of 24 defendant-owned warehouses in North Carolina, South Carolina, Virginia, and West Virginia, and delivering them to customers in a defined geographic territory. Paul Holshouser Aff. (#32-2) ¶ 3. The orders are first delivered to defendants' Jamestown, N.C. baking factory and then shipped to the respective warehouses where they are picked up for distribution and sale by distributors to customers. Id. ¶ 9. Each warehouse is managed by a Sales Manager responsible for the oversight of the territories within their respective branch. Id. ¶ 3. Distributors purchase or are otherwise granted distribution rights to certain product brands within a defined geographic territory. Id. ¶ 8. Plaintiffs allege that a distributor's route is pre-determined by Defendants. Scott Rehberg Decl. (#28-2) ¶ 5. Distributors' job duties include delivering Flowers products to customers, restocking shelves with fresh product, and removing stale product. Id. Pursuant to the Distributor Agreement, each distributor is responsible for purchasing their vehicles and some of their own equipment. Distributor Agreement ¶ 9.1 (#107-1 at 6).
According to Defendants, it is the distributor alone who determines the type of product and quantity that is delivered to a particular customer. Def. Mem. Opp. Conditional Certification (#32) at 5. The quantity to be delivered to each customer is based upon a four week average, to which distributors can make adjustments based upon the customers' needs, as well as other variables such as weather and holidays. Id. According to Plaintiffs, however, Defendants reserve the right to change the quantity of a particular order and the distributor is required to deliver that amount, even if the distributor disagrees. Rehberg Decl. ¶ 6. Distributors are compensated on a "piece rate" basis in that Defendants pay them based upon the quantity of product sold by customers. Id. ¶ 3.
Distributors service both cash accounts and charge, or national, accounts, each type having distinct service requirements. Def. Mem. (#32) at 7; Willard Riley Dep. At 85 (#32-5) at 50. For cash accounts, distributors are apparently granted a certain amount of autonomy, including determining how long to spend servicing each customer; the ability to extend credit to the customer; and more discretion in certain other areas such as marketing, product mix, and displays. Def. Mem. (#32) at 7. In contrast, charge, or national, accounts are governed by a stricter set of contractual requirements negotiated between the customer and Defendants. Id.; Rehberg Decl ¶ 7. Such requirements include hours of service requirements, certain service procedures, and other regimented marketing programs. Def. Mem. (#32) at 7. Though distributors can pursue additional cash accounts, Plaintiffs contend that Defendants retain exclusive control over Flowers products. Rehberg Decl. ¶ 7.
The named plaintiffs in this action's complaint (#1) are Mario Ronchetti, Scott Rehberg, and Willard Allen Riley. Only Plaintiff Ronchetti seeks certification on behalf of the class for the NCWHA claims. Plaintiff Ronchetti is a distributor who performs delivery and merchandizing services to local retailers of bakery and snack food products manufactured or sold by Flowers. Plaintiff Ronchetti is a resident of Cabarrus County, North Carolina whose area of distribution includes Charlotte and Harrisburg, North Carolina. He operates out of a Jamestown distribution center. Plaintiff Ronchetti has been employed as a distributor with Flowers since approximately May 16, 2004.
Plaintiff moves this court to certify the NCWHA claims in this litigation as a class action, with the class members defined as follows:
All persons who, at any time from September 12, 2009, continuing through entry of judgment in this case, worked as Distributors in the State of North Carolina for Flowers Foods, Inc. or Flowers Baking Co. of Jamestown, LLC and who were classified as independent contractors.
Plaintiff seeks certification under Rule 23(b)(2), arguing that Defendants have misclassified Plaintiff and proposed class members as independent contractors such that injunctive or declaratory relief is appropriate respecting the class as a whole. Additionally, Plaintiff seeks certification under Rule 23(b)(3), arguing that common questions of fact and law predominate over questions affecting only individual class members. Plaintiff asks the court to appoint attorneys Shawn Wanta and Ann Groninger as class counsel.
Rule 23 of the Federal Rules of Civil Procedure governs certification of a class action. "A district court has broad discretion in deciding whether to certify a class." Lienhart v. Dryvit Sys., Inc., 255 F.3d 138, 146 (4th Cir. 2001). "[F]ederal courts should give Rule 23 a liberal rather than a restrictive construction." Gunnells v. HealthPlan Servs., Inc., 348 F.3d 417, 424 (4th Cir. 2003) (internal quotations and citations omitted). The party seeking class certification bears the burden of proof, Int'l Woodworkers of Am. v. Chesapeake Bay Plywood Corp., 659 F.2d 1259, 1267 (4th Cir.1981), and must present evidence that the putative class complies with Rule 23. EQT Prod. Co. v. Adair, 764 F.3d 347, 357 (4th Cir. 2014). In determining whether the party seeking certification has carried its burden, "a district court may need to 'probe behind the pleadings before coming to rest on the certification question.'" Id. (quoting Comcast Corp. v. Behrend, 133 S.Ct. 1426, 1432 (2013)).
District courts are not required "to accept plaintiffs' pleadings when assessing whether a class should be certified." Gariety v. Grant Thornton, LLP, 368 F.3d 356, 365 (4th Cir. 2004). Rather, "the district court must take a 'close look' at the facts relevant to the certification question and, if necessary, make specific findings on the propriety of certification." Thorn v. Jefferson-Pilot Life Ins. Co., 445 F.3d 311, 319 (4th Cir. 2006) (quoting Gariety, 368 F.3d at 365). While Rule 23 does not grant courts "license to engage in free-ranging merits...
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