Pepperidge Farm Accused of FLSA Violations for Misclassification

Plaintiff Chad Hill filed suit on Thursday in the Eastern District of Virginia against defendant Pepperidge Farm, Inc. Hill filed the putative class action based on the defendant’s alleged misclassification of his position as an independent contractor, a title which he believes puts him at an inherent financial disadvantage.

Pepperidge Farm is a manufacturer and distributor of “snack food and packaged bake goods for retail sales.” The plaintiff is a consignee of the defendant, effectively acting as an independent contractor, the complaint says.

The consignee pays for the right to deliver and distribute the defendant’s products, but in return gets sole jurisdiction over the product, route, and territory, an agreement referred to as the Consignment Agreement. The consignment agreement provides that the defendant can terminate the agreement at any time without cause. It notes that potential reasoning can even include things like “failure of the consignee adequately to realize the sales potential of the Territory.”

Hill argues that he and other individuals similarly situated have been misclassified by the defendant as independent contractors. Under the Fair Labor Standards Act (FLSA), employee status is to be determined by the “economic realities of the relationship between the worker and the putative employer.” Hill believes that the economic reality of the aforementioned relationship is “that of an employment relationship” and notes that there are few differences in duties between his job as an independent contractor and a standard delivery employee.

The alleged misclassification of the consignees as independent contractors results in them receiving no overtime premium when they work in excess of 40 hours a week, their hours not being tracked by the defendant, and their compensation being illegally charged back for various ‘offenses’, such as irregularities or having too much stale product. Further, the consignees are paid solely based on commission, they are provided no base salary by the defendant. Under the FLSA, Hill maintains that he should be defined as an employee rather than an independent contractor.

The complaint cites two violations of the FLSA (failure to pay overtime compensation and failure to pay minimum wage) and three violations of Virginia state law (state law misclassification, overtime wage, and unpaid wages). The plaintiff is seeking class certification, unpaid, overtime, and minimum wages, liquidated and treble damages, litigation fees, and any other relief deemed appropriate by the Court.

The plaintiff is represented by Butler Curwood PLC.