On November 28, 2011, an Illinois federal judge denied Bimbo Foods Bakeries Distribution Inc.'s ("BF") attempt to dismiss or transfer a putative class action suit claiming that BF wrongly denied overtime pay and other compensation to its employees by misclassifying them as "independent contractors." Bimbo Bakeries own brands such as Entenmann's, Colonial Bread, Boboli, and Sara Lee.
Steven Bell, the suit's lead plaintiff, alleges that he was denied a wide range of benefits--including health insurance, life insurance, vacation, and holiday pay--as a result his independent contractor status. Additionally, as independent contractors are not covered by the Fair Labor Standards Act ("FLSA"), Mr. Bell alleges he was unlawfully denied overtime pay. When employees--but not independent contractors--work more than forty hours in a week, the FLSA entitles them to time-and-half pay for these additional hours. Mr. Bell also cites Illinois wage and hour violations.
Employers frequently misclassify their employees in an effort to shirk their legal responsibilities for employees regarding the provision of wages, unemployment compensation, workers' compensation, and payroll taxes. However, if a worker meets the legal test for being an employee (as opposed to an independent contractor), then his or her employer must comply with all applicable legal requirements for treating that worker as an employee, regardless of whether the employer refers to the worker as an "employee." Bell's complaint maintains that, in this case, "[o]ther than paying [employees] as independent contractors and depriving them of employee benefits, [Bimbo Foods] treats them as employees."
BF attempted to persuade U.S. District Judge Edmond E. Chang to dismiss or transfer the lawsuit because there are two other pending lawsuits, one in Pennsylvania and one in North Carolina, which were filed against BF before Mr. Bell's case and allege similar legal violations. Judge Chang acknowledged that the two suits filed prior to Mr. Bell's complaint were similar, and that all three pending actions are seeking to assert a collective action under the FLSA and relevant state laws. However, as Judge Chang explained, Mr. Bell's case should not be dismissed "merely because someone else is pursuing a FLSA claim against BF in another district." Further, the Court found that there were differences between the three lawsuits since each complaint alleges a violation of different state wage laws. And, since it was not "[absolutely clear] whether the dismissal of [Mr. Bell's] Illinois state law claim [would] cause prejudice...or adversely affect [Mr. Bell]," Judge Chang denied BF's motion to dismiss.
BF also argued that, as an alternative to dismissal, the case should be transferred to the Eastern District of Pennsylvania, where a prior case was filed. In order to show that a transfer is warranted, the moving party (here, BF) must establish that Pennsylvania would be a more convenient forum for the litigation. The Court noted that BF put forward no arguments relating to this issue, and therefore denied BF's motion to transfer.
The Court found that, even if there is overlap between Mr. Bell's suit and the other two cases, the Seventh Circuit favors staying a later-filed case rather than dismissing it. The option of staying Mr. Bell's case--which Mr. Bell has agreed to--would allow Mr. Bell to join the Pennsylvania case. Although, at this time it remains to be seen whether or not the Pennsylvania case will survive a dismissal motion from BF. If the motion to dismiss that case is granted, or if Mr. Bell decides not to opt-in to that case, then Mr. Bell's case should proceed, said Judge Chang. This issue is to be addressed with the parties at a hearing on November 29, 2011.
If you are treated as an independent contractor, you may be legally entitled to additional wages and/or other compensation. For more information, contact a Missouri overtime attorney.