Rehberg v. Flowers Baking Co. of Jamestown, LLC

Decision Date12 February 2016
Docket NumberDOCKET NO. 3:12-cv-00596-MOC-DSC
Citation162 F.Supp.3d 490
CourtU.S. District Court — Western District of North Carolina
Parties Scott Rehberg, et al., Plaintiffs, v. Flowers Baking Company of Jamestown, LLC and Flowers Foods, Inc., Defendants.

Patricia A. Bloodgood, Shawn Justin Wanta, Baillon Thome Jozwiak & Wanta LLP, Susan E. Ellingstad, Lockridge Grindal Nauen P.L.L.P., Minneapolis, MN, for Plaintiffs.

Ann Groninger, Charlotte, NC, for Plaintiffs/Defendants.

Anthony Craig Cleland, Kevin Patrick Hishta, Margaret Santen Hanrahan, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., Atlanta, GA, Lia Anne Lesner, Michael Oliver Eckard, Benjamin Robert Holland, Ogletree Deakins Nash Smoak & Stewart PC, Charlotte, NC, for Defendants.

ORDER

Max O. Cogburn Jr

., United States District Judge

THIS MATTER is before the court on: 1) Plaintiff's Motion for Partial Summary Judgment (# 144); 2) Defendants' Motion for Summary Judgment (# 146); and 3) Defendants' Motion to Strike Portions of Declarations Submitted in Opposition to Defendants' Motion for Summary Judgment (# 190). These matters being fully briefed and ripe for review, the court held oral arguments on November 9, 2015. Having considered the matter and the applicable law, the court enters the following findings, conclusions, and Order.

FINDINGS AND CONCLUSIONS
I. Background
A. Factual Background

A summary of the facts relevant to the parties' motions currently before the court is as follows. Defendant Flowers Foods, Inc. (Flowers), headquartered in Thomasville, Georgia, is the parent holding company of numerous operating subsidiaries, including Defendant Flowers Baking Co. of Jamestown, LLC (Jamestown). See Chuck Rich. Dep. I:35:13-16 (# 107–1 at 28); (# 32-1 at ¶ 2). These subsidiaries produce and/or distribute packaged breads, buns, rolls and snack cakes. (Chuck Rich Dep. I:33:25-35:12; # 32-1, Ex. A, p. 2). Plaintiffs, a group of bakery product distributors (“Distributors”) for Defendant Jamestown, purchase distribution rights to sell and distribute products to customers in a defined territory. Defendants uniformly classify all Distributors as independent contractors, pursuant to a “Distributor Agreement,” which all Distributors have signed. (# 117-17, Ex B, pp. 3-4; # 32-2, Ex. B, pp. 5-6; # 107–1). Jamestown is the entity that enters into Distributor Agreements with Distributors (# 107–1, p. 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 Jamestown-owned warehouses in North Carolina, South Carolina, Virginia, and West Virginia, and delivering them to customers in a defined geographic territory. See (Paul Holshouser Aff. (# 32–2) at ¶ 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 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.

Distributors' job duties include delivering Flowers products to customers, restocking shelves with fresh product, removing stale product, and—to an extent disputed by the parties—making sales of Flowers products to account customers. Distributors share the same primary job responsibility of servicing Defendants' customers in accordance with “good industry practice” as described in their Distributor Agreements. (## 107-1, p. 4; 107-3, p. 8). Defendants define “good industry practice” as: properly ordering products; keeping shelves stocked with Flowers products; keeping store shelves in good condition in conformance with a planogram; properly rotating products on a regular basis; promptly removing all stale products; meeting customer service requirements; maintaining proper service and delivery to all outlets requesting service; and maintaining all equipment in a sanitary condition and in good, safe working order. (## 107-1, pp. 38, 40; 107-3, p. 8).

Plaintiffs state that they begin their workdays by arriving at their respective warehouses to load product onto their trucks, which Jamestown employees have sorted, organized, and packed for Distributors. (# 118-5, p. 3). They then proceed on their delivery route, as defined by the territory set forth in their Distributor Agreements. See, e.g. , (# 107-1, pp. 16-17, 30-32). They state that they are required to deliver products to retailers within certain timeframes every service day; must stock products according to predetermined planograms; and can only deliver, order, and stock the products that a retailer has approved with Defendants. See Pl. Resp. SUMF (# 181) (citing (Woods Decl. ¶¶ 2,3; Solomon Decl. ¶¶ 3-5; Shillinglaw Decl. ¶¶ 2, 3, 6; Ronchetti Decl. ¶¶ 2, 4-5)). According to Defendants, the Distributors determine the type of product and quantity to be delivered to a particular customer, see, e.g. , Riley Dep. (# 32-5, pp. 69-71), and that quantity can be adjusted based upon the customers' needs, historical sales, and other variables such as weather and holidays. See id. at. 73-74; Ronchetti Dep. at 91:8-15 105: 17-109:5 (# 32-6, p. 55; 66-68); Rehberg Dep. 119:5-120:16 (# 32-3 at p. 76-77). According to Plaintiffs, however, Jamestown sales managers and directors of sales retain ultimate control over order quantities, have the ability to adjust the orders Distributors place, and frequently make such changes. (## 107-1, p. 32; 118-5, p. 7) (# 111-2, pp. 2-5; Rehberg Dep. 122-23).

Plaintiffs state that they must be back at their respective warehouses by 5:00 p.m. each workday to return stale product to Defendants, or else they will be penalized by not receiving credit for returned items. (Rehberg Dep. 77-78). Plaintiffs also state that after servicing their routes for the day, they might receive a “call-back” at any time from an account to deliver more products. (# 107-3, p. 24). If they refuse, Jamestown will take over and arrange for the delivery by one of its employees and deduct $75.00 plus mileage costs from Distributors' weekly earnings. Id. By Friday of every week, Distributors must provide Jamestown with a full settlement of all products that Jamestown provided to them in the preceding week. (# 107-1, p. 5). Jamestown imposes warehouse and administrative fees on all Distributors, which are deducted from their weekly settlement checks. (# 107-1, p.43; # 107-3, 17). Defendants state that Plaintiffs are compensated based on their sales of products to accounts. See Def. SUMF (# 148 at ¶ 24). Plaintiffs, however, state that they are paid bi-weekly and that their checks are based on a number of different transactions. See Pl. Resp. Def SUMF (# 181 at ¶ 24).

It is undisputed that most Distributors currently lease Isuzu box trucks owned by Defendants to service their distributorships. See Def. SUMF (# 148) at ¶ 6; Pl. Resp. SUMF (# 181) at ¶ 6; Transcript of Oral Arguments (Tr. at 26:19-27:8). It is also undisputed that on normal delivery days (Monday, Tuesday, Thursday, Friday, and Saturday), Distributors drive Isuzu box or similar larger trucks, or a truck and trailer combination, because of the amount of product Distributors deliver to their customers each day. See Def. SUMF (# 148) at ¶ 17; Pl. Resp. SUMF (# 181) at ¶ 7. Defendants state that these trucks have a gross vehicle weight rating (“GVWR”) or actual weight, when loaded, of 10,001 pounds or more; Plaintiffs do not dispute that, depending on their loads, they drive trucks with a GVWR exceeding 10,000 pounds on some—but not all—days of their workweek. See Def. SUMF (# 148) at ¶ 18; Pl. Resp. SUMF (# 181) at ¶ 18. The parties agree that Distributors also use their personal vehicles to perform their job duties, though Defendants claim that they only do so when conducting “pull-ups”—pulling existing stock previously delivered to an account from the back room of an account and putting it on the shelf (and thus not putting any product in a Distributor's vehicle). Plaintiffs dispute Defendants' characterization of Distributors' personal vehicle use as occasional and only to conduct pull-ups, citing testimony for some Distributors that they also use these vehicles to transport products from the warehouses to retailers and restaurants. See Def. SUMF (# 148) at ¶ 19; Pl. Resp. SUMF (# 181) at ¶ 19.

Also relevant to the parties' motions now before the court is the nature of contractual releases that certain Distributors signed releasing either one or both Defendants from liability. As the terms of the releases varied somewhat over the relevant time frame in this case, the class members are each affected differently. Pursuant to their Distributor Agreements, all Distributors are required to “execute ... a general release of claims, in the event of any sale, conveyance or assignment, including any sale, conveyance or assignment to [Defendant Jamestown].” (# 107-1, p. 8). Thus, at the time of hire, Defendants bind Distributors to sign a general release of claims as to Jamestown in the future. Id. The general release of claims provision signed by certain Distributors contains substantially similar language, which provides in relevant part:

Distributor ... does hereby release and forever discharge [Jamestown], its related entities, past, present, and future ... from any and all claims, action, rights, demands, or remedies, whether known or unknown, which Distributor ever had, or may claim to have had, from the beginning of time until as of the moment he/she/it signs this Agreement arising out of, or relating to, the Distributor agreement, including any and all tort and contract claims.

(# 145-1).

It is undisputed that between ...

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