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Coyle v. Flowers Foods Inc.

United States District Court, D. Arizona

August 29, 2016

Terry Coyle, Plaintiff,
Flowers Foods Incorporated, et al., Defendants.


          Douglas L. Rayes United States District Judge.

         Plaintiffs have filed a motion for conditional class certification and court-supervised notice of pending collective action. (Doc. 115.) The motion is fully briefed and neither party requested oral argument. For the reasons below, the motion is granted.


         In July 2015, Plaintiff Terry Coyle brought this collective action on behalf of himself and other similarly situated Distributors against Defendants Flowers Foods Inc. (Flowers) and its subsidiary, Holsum Bakery Inc. (Holsum), alleging violations of the Fair Labor Standards Act (FLSA) and breach of fiduciary duties. (Doc. 1.) On February 4, 2016, Coyle filed an amended complaint dropping his fiduciary duties claim and adding claim for violation of the Arizona Wage Law. (Doc. 72.) In the following months, Craig Coppens, Albert Younan, and David Petch filed consent forms jo ining the lawsuit as opt-in plaintiffs. (Docs. 127-1; 169-1; 179-1.)

         Defendants are in the wholesale bakery business and distribute their bakery products through a “centralized network of communication, distribution, and warehousing facilities.” (Doc. 72, ¶¶ 1, 10.) Defendants integrate “Independent Distributors” into the system to “deliver fresh baked goods and certain cake products to Defendants' customers.” (Id., ¶ 2.) Distributors “stock the products on store shelves and assemble promotional displays designed and provided by Defendants.” (Id.) Plaintiffs consist of four named Distributors that deliver Defendants' bakery products to Defendants' customers.

         As Distributors, Plaintiffs arrive early in the morning to load their vehicles with Defendants' products and deliver the products to Defendants' customers “at the time and place specified by Defendants.” (Id., ¶¶ 17, 18.) All Distributors must sign a Distribution Agreement, which sets forth the terms of the relationship, “has no specific end date[, ] and can be terminated by either party at any time with limited notice.” (Id., ¶ 19.) The Distribution Agreement provides Defendants the ability to extend credit to their customers, set pricing terms, and control “virtually all terms of the [customer] relationship.” (Id., ¶ 21.) “The result is that Distributors' job duties and ability to earn income is tied directly to the sale and promotion of products outside of their control.” (Id., ¶ 24.) Distributors typically work 50-55 hours during the seven-day workweek. (Id., ¶ 48.) They “must strictly follow Defendants' instructions and adhere to the pricing, policies, and procedures negotiated between Defendants and their retailer-customers.” (Id., ¶ 30.) Plaintiffs allege that Defendants direct and control them as Independent Distributors as if they are employees but wrongfully classify them as independent contractors, denying them the benefits and protections afforded by the FLSA and the Arizona Wage Law. (Id., ¶ 49.)

         Plaintiffs now move for conditional certification of the following collective action under the FLSA:

All persons who are or have performed work as Distributors for Defendants under a “Distributor Agreement” with Holsum Bakery, Inc. or a similar written contract that they entered into during the period commencing three years prior to the commencement of this action through the close of the Court-determined opt-in period and who file a consent to join this action pursuant to 29 U.S.C. § 216(b).

(Doc. 115 at 2.) The collective action is limited to Distributors in Arizona. It seeks unpaid overtime compensation and a declaration that the Distributors are employees entitled to the protections of the FLSA and Arizona laws. (Doc. 72, ¶¶ 73-76.)


         The FLSA prohibits covered employers from employing any employees “for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.” 29 U.S.C. § 207(a)(1). “Any employer who violates the provisions of . . . section 207 . . . shall be liable to the employee or employees affected in the amount of . . . their unpaid overtime compensation[.]” Id. § 216(b). A a collective action to recover these damages may be brought “against any employer . . . by any one or more employees for and in behalf of himself or themselves and other employees similarly situated.” Id. Employees not named in the complaint who wish to join the action must give their consent in writing to the court in which the action is brought. Id.

         “Section 216(b) does not define ‘similarly situated, ' and the Ninth Circuit has not construed the term.” Colson v. Avnet, Inc., 687 F.Supp.2d 914, 925 (D. Ariz. 2010). Although courts in other circuits have taken different approaches in this determination, “district courts within the Ninth Circuit generally follow the two-tiered or two-step approach for making a collective action determination.” Id.; see also Villarreal v. Caremark LLC, No. Cv-14-00652-PHX-DJH, 2014 WL 4247730, at *3 (D. Ariz. Aug. 21, 2014) (“The majority of courts, including those within the District of Arizona, have adopted the two-tiered approach in deciding whether to grant FLSA collection action status.” (internal quotations and alterations omitted)). Under this approach,

the court determines, on an ad hoc case-by-case basis, whether plaintiffs are similarly situated. This requires the court to first make an initial ‘notice stage' determination of whether plaintiffs are similarly situated. At this first stage, the court requires nothing more than substantial allegations that the putative class members were together the victims of a single decision, policy, or plan. If a plaintiff can survive this hurdle, the district court will conditionally certify the proposed class and the lawsuit will proceed to a period of notification, which will permit the potential class members to opt-into the lawsuit. Once the notification period ends, the Court moves on to the second step of the certification process. At the second step, in response to a motion to decertify the class filed by the ...

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