`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF NEW MEXICO
`
`
`
`
`
`
`
`
`
`
`PAUL MEDRANO, on his own behalf and )
`on behalf of all others similarly situated, )
`
`
`
`
`
`
`)
`
`Plaintiff,
`
`
`
`)
`
`
`
`
`
`
`)
`v.
`
`
`
`
`
`)
`
`
`
`
`
`
`)
`FLOWERS FOODS, INC., and
`
`)
`FLOWERS BAKING CO. OF EL PASO, LLC )
`
`
`
`
`
`
`)
`
`Defendants.
`
`
`
`)
`
`
`
`COLLECTIVE ACTION COMPLAINT AND JURY TRIAL DEMAND
`
`
`
`
`
`Plaintiff Paul Medrano (“Plaintiff”), on behalf of himself and other similarly situated
`
`individuals, by and through his undersigned attorneys, brings this collective action lawsuit
`
`against Defendants Flowers Foods, Inc. (“Flowers Foods”) and Flowers Baking Co. of El
`
`Paso, LLC (“Flowers El Paso” and collectively with Flowers Foods, “Defendants”), seeking
`
`all available relief under the Federal Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201 et
`
`seq. and the New Mexico Minimum Wage Act (“NMMWA”), NMSA 1978, §§ 50-4-1 et seq.
`
`Plaintiff’s claims under the FLSA are being asserted as a collective action pursuant to
`
`Section 16(b), 29 U.S.C. § 216(b). Plaintiff’s claims under the NMMWA are being asserted
`
`as a collective action pursuant to NMSA 1978, § 50-4-26(D). The following allegations are
`
`based on personal knowledge as to Plaintiff’s own conduct and are made on information
`
`and belief as to the acts of others.
`
`
`
`Case 1:16-cv-00350-JCH-KK Document 1 Filed 04/27/16 Page 2 of 14
`
`PARTIES, JURISDICTION AND VENUE
`
`Plaintiff is an individual residing in Bernalillo County, New Mexico.
`
`Plaintiff is an employee covered by the FLSA and the NMMWA.
`
`Upon information and belief, Flowers Foods is a Georgia corporate entity
`
`1.
`
`2.
`
`3.
`
`doing business in New Mexico.
`
`4.
`
`Upon information and belief, Flowers El Paso is a Texas corporate entity
`
`doing business in New Mexico.
`
`5.
`
`Flowers Foods and Flowers El Paso are employers covered by the FLSA and
`
`the NMMWA.
`
`6.
`
`At all times relevant to this Complaint, Plaintiff was employed by Defendants
`
`to work in Bernalillo County, New Mexico.
`
`7.
`
`This Court has jurisdiction over the claims asserted in this action pursuant to
`
`28 U.S.C. § 1331, federal question jurisdiction, and 28 U.S.C. § 1367, supplemental
`
`jurisdiction, for the claims brought under the NMMWA.
`
`FACTUAL ALLEGATIONS RELEVANT TO ALL CLAIMS
`
`8.
`
`Flowers Foods is “one of the largest producers of packaged bakery foods in
`
`the United States” and operates more than 40 bakeries nationwide. Familiar brands owned
`
`and produced by Flowers Foods include Nature’s Own, Wonder, Ms. Freshly’s, and
`
`Tastycake.
`
`9.
`
`According to its own website, in 2014, Flowers Foods had sales of $3.7
`
`billion.
`
`
`
`2
`
`
`
`Case 1:16-cv-00350-JCH-KK Document 1 Filed 04/27/16 Page 3 of 14
`
`10.
`
`Defendant Flowers El Paso is a wholly owned subsidiary of Flowers Foods
`
`that operates a bakery and warehouses in Bernalillo County. Flowers Foods, by and
`
`through its subsidiaries such as Defendant Flowers El Paso, ships bakery and snack
`
`products to warehouses, from which distributors, such as Plaintiff and the others similarly
`
`situated, pick up and distribute the products to the Defendants’ retail customers at the time
`
`and place specified by the Defendants.
`
`11.
`
`Distributors hired by Flowers El Paso are integrated into Flowers Foods’
`
`existing network of operations. The work performed by Plaintiff and others similarly
`
`situated simultaneously benefited or benefits both Flowers Foods and any of its
`
`subsidiaries, including Flowers El Paso. Plaintiff and the others similarly situated were
`
`hired for the purpose of ultimately distributing products for Flowers Foods.
`
`12.
`
`In approximately 2003, Plaintiff was hired by Flowers El Paso as a distributor
`
`servicing retail outlets in the Albuquerque area. Plaintiff was employed by the Defendants
`
`for more than a decade, until approximately August of 2015.
`
`13.
`
`In an effort to perpetuate a scheme that would deny Plaintiff and others
`
`similarly situated the rights and benefits provided under the FLSA and the NMMWA,
`
`Defendants require all potential distributors to “purchase” a predetermined territory in
`
`support of the Defendants’ efforts to classify the distributors as independent contractors.
`
`As part of that scheme, Plaintiff and others similarly situated were required to enter into a
`
`“Distributor Agreement” with Flowers El Paso. The Distributor Agreement had no specific
`
`end date and could be terminated by either party at any time with limited notice.
`
`
`
`3
`
`
`
`Case 1:16-cv-00350-JCH-KK Document 1 Filed 04/27/16 Page 4 of 14
`
`14.
`
`Flowers Foods markets its bakery and snack products to retailers and other
`
`grocery stores and merchants. Flowers Foods negotiates with the retailers to set virtually
`
`all material terms of the relationship with such retailers, including but not limited to (a)
`
`wholesale and retail prices for products, (b) service and delivery agreements, (c) shelf
`
`space to display products, (d) product selection, (e) promotional pricing for products, (f)
`
`the right to display promotional materials, and (g) print advertisements in retailers’
`
`newspaper ads.
`
`15.
`
`During the entirety of his employment, Defendants required Plaintiff to
`
`service specified retail accounts, instructed him on which days he was required to deliver
`
`baked goods to those accounts, and controlled virtually all other aspects of his interaction
`
`with those retail accounts.
`
`16.
`
`Plaintiff was required to accept Defendants’ conditions of employment and
`
`strictly follow their instructions, including adherence to the pricing, policies, and
`
`procedures negotiated between Flowers Foods and its retail customers. Otherwise,
`
`Plaintiff would face termination.
`
`17.
`
`The job as a distributor performed by Plaintiff and the others similarly
`
`situated does not require specialized skills.
`
`18.
`
`Plaintiff was not permitted to determine his own schedule or the manner in
`
`which he worked.
`
`19.
`
`Defendants exercised such control over Plaintiff that when Plaintiff was
`
`attending the funeral of his own wife, Ruth Medrano, a manager from Flowers called him
`
`on his cell phone and demanded that he return to work immediately.
`
`
`
`4
`
`
`
`Case 1:16-cv-00350-JCH-KK Document 1 Filed 04/27/16 Page 5 of 14
`
`20.
`
`Larry Baldwin, the regional president of Flowers El Paso, later referred to
`
`this incident as evidence of how dedicated Plaintiff was to his work, recalling the incident
`
`in which he had worked even on the day of his own wife’s funeral.
`
`21.
`
`As a “distributor,” Plaintiff was required to purchase, insure, fuel, and
`
`maintain his own delivery vehicle. However, he was given no choice with regard to the
`
`selection of insurance, but rather simply had a deduction for insurance taken out of his bi-
`
`weekly paychecks.
`
`22.
`
`Defendants use the Distributor Agreement contracts to shift certain costs
`
`onto its employees. Under the contract, Plaintiff was required to pay all maintenance and
`
`fuel cost for what amounted to a company vehicle and warehouse rent. However,
`
`Defendants provided Plaintiff with computer equipment, administrative support,
`
`advertisements, promotional materials, bakery
`
`trays, market advice, strategic
`
`development, and other business necessities to its employees.
`
`23.
`
`The Distributor Agreement required Defendants to “preserve and develop
`
`the quality and marketability” of its products. However, Defendants regularly and
`
`consistently provided Plaintiff with product that was moldy, stale, or marred by rodent bite
`
`marks, or all three. On many occasions, Plaintiff was charged for the inedible and
`
`unsanitary product with which he had been provided, and he was forced to absorb the cost
`
`of the unusable product.
`
`24.
`
`For the entirety of his employment with Defendants, Plaintiff’s delivery
`
`schedule typically required Plaintiff to arrive at the factory by 4:30 a.m., and frequently
`
`resulted in his arriving home with his daily deliveries completed around 8:00 p.m.
`
`
`
`5
`
`
`
`Case 1:16-cv-00350-JCH-KK Document 1 Filed 04/27/16 Page 6 of 14
`
`25.
`
`Plaintiff was typically required to work 7 days a week.
`
`26.
`
`Plaintiff and other distributors consistently worked in excess of 40 hours
`
`every week of the year. Plaintiff often worked eighty, one hundred, or even more hours on
`
`a weekly basis.
`
`27.
`
`Plaintiff’s manager, David Baxly, often made racially charged jokes about the
`
`extremely long hours worked by Plaintiff and other similarly situated employees, stating
`
`that Plaintiff and others were “working like Mexicans” or “working like niggers.”
`
`28.
`
`Each year, Flowers El Paso issued Plaintiff a W-2 form identifying the wages
`
`he had been paid that year.
`
`29.
`
`Defendants paid Plaintiff through a complex calculation based on product
`
`sold through the various retail outlets, with deductions for product that was delivered but
`
`not sold. These deductions were in addition to various other deductions, including the
`
`deduction for insurance on Plaintiff’s own vehicle. Plaintiff never received overtime
`
`compensation for any hours worked by him in excess of 40 hours in a single work week.
`
`Upon information and belief, Defendants never paid overtime compensation to any
`
`Distributors similarly situated to Plaintiff regardless of the number of hours worked.
`
`30.
`
`Defendants represented to Plaintiffs and other distributors that they would
`
`have the opportunity to run their businesses independently, have discretion to use their
`
`business judgment, and have the ability to manage their businesses to increase
`
`profitability. Contrary to these representations, Defendants denied Plaintiff and other
`
`distributors benefits of ownership, or of any opportunities for profit. Instead, Defendants
`
`maintained all business judgment and management over the distributors’ business,
`
`
`
`6
`
`
`
`Case 1:16-cv-00350-JCH-KK Document 1 Filed 04/27/16 Page 7 of 14
`
`including, but not limited to, the following: (a) controlling wholesale pricing, (b)
`
`negotiating retail pricing, (c) retaining the rights to establish all sales and promotions, (d)
`
`retaining the rights to change orders placed by distributors, (e) requiring distributors to
`
`pay for product they did not order, (f) requiring distributors to load the product onto their
`
`trucks, deliver it to stores, maintain the product in the store, remove the product from the
`
`store, and return it to the warehouse for credit, (g) billing distributors who did not attempt
`
`to distribute the extra product for the full wholesale price of that product, (h) maintaining
`
`the right to discipline distributors, up to and including termination, for reasons including
`
`hiring others to run their routes, taking time off work, or for refusing a specific order to
`
`deliver a product to a particular store at a particular time, (i) retaining the right to handle
`
`customer complaints against a distributor, (j) retaining the ability to withhold pay for
`
`certain specified expenses, and (k) retaining the right to unilaterally vary the standards,
`
`guidelines, and operating procedures.
`
`31.
`
`After Defendants negotiated the sale of the Flowers products with major
`
`retailers, including Wal-Mart, Target, and other grocery stores, Plaintiff and others
`
`similarly situated delivered the product to store locations that were predetermined, and
`
`Plaintiff and the others similarly situated had no discretion as to what products to
`
`distribute to a particular store, whether to run sales or promotions, how frequently to
`
`service stores, or any other similar discretion that would allow Plaintiff and the others
`
`similarly situated to increase the profitability of their work. The result was that the ability
`
`of Plaintiff and the others similarly situated to earn income was tied directly to the sale and
`
`promotion of products outside their control.
`
`
`
`7
`
`
`
`Case 1:16-cv-00350-JCH-KK Document 1 Filed 04/27/16 Page 8 of 14
`
`32.
`
`Defendants required Plaintiff and all distributors to process all transactions
`
`through a handheld computer provided to them by Defendants. The handheld computer
`
`controlled the product prices, maintained the customer information, and monitored
`
`business performance.
`
`33.
`
`Defendants intentionally mischaracterized Plaintiff and the others similarly
`
`situated as independent contractors in order to deprive Plaintiff and the others similarly
`
`situated of substantial rights and benefits of employment.
`
`34.
`
`Defendants did not pay Plaintiff or others similarly situated on the basis of
`
`hours worked, and did not pay them one and a half times a set wage for hours in excess of
`
`forty worked in a single week.
`
`35.
`
`All employees similarly situated to Plaintiff were required to sign contracts
`
`similar to plaintiff’s contract, asserting that they were “independent contractors,” despite
`
`Defendants’ pervasive control over the means and manner of the Plaintiff’s and other
`
`distributors’ work. On the basis of these contract, and because they were misclassified as
`
`independent contractors, Plaintiff and the others similarly situated were or are denied the
`
`rights and benefits of employment, including but not limited to, overtime wages.
`
`COLLECTIVE ACTION ALLEGATIONS
`
`36.
`
`Plaintiff brings Count I of this Complaint as a collective action, alleging
`
`violations of the FLSA on behalf of himself and all other similarly situated individuals who
`
`worked as distributors for Flowers Foods or Flowers El Paso in the State of New Mexico
`
`under a “Distributor Agreement” or a similar written contract, and who worked for
`
`Defendants during the period commencing three years prior to the filing of this Complaint
`
`
`
`8
`
`
`
`Case 1:16-cv-00350-JCH-KK Document 1 Filed 04/27/16 Page 9 of 14
`
`through the trial of this action. Count I may be brought and maintained as an “opt-in”
`
`collective action pursuant to 29 U.S.C. § 216(b) because Plaintiff’s claims are similar to the
`
`claims of current and former “independent contractors” who worked for Defendants. The
`
`employees similarly situated to Plaintiff are known to Defendants and are readily
`
`identifiable through Defendants’ payroll records.
`
`37.
`
`Plaintiff brings Counts II of this case as a collective action pursuant to NMSA
`
`1978, § 50-4-26(D), on behalf of himself and on behalf of all similarly situated employees
`
`currently and formerly employed by Flowers. The NMMWA provides a three year statute
`
`of limitations for all claims brought under the NMMWA, and also provides that employees
`
`may recover all wages owed, regardless of the date of the violation of the NMMWA, where
`
`the employer engaged in a continuing course of conduct in violating the NMMWA.
`
`38.
`
`Plaintiff and the others similarly situated are or were employed by
`
`Defendants, had substantially similar job requirements, pay provisions, and are subject to
`
`Defendants’ common practice, policy, or plan of controlling their daily job functions.
`
`39.
`
`Defendants regularly permitted and required Plaintiff and the others
`
`similarly situated to work more than 40 hours per week without overtime compensation.
`
`40.
`
`Upon information and belief, Defendants knew that Plaintiff and the others
`
`similarly situated performed work that required overtime pay.
`
`41.
`
`Defendants have operated under a scheme to deprive Plaintiff and the others
`
`similarly situated of overtime compensation by failing to properly compensate them for all
`
`time worked.
`
`
`
`9
`
`
`
`Case 1:16-cv-00350-JCH-KK Document 1 Filed 04/27/16 Page 10 of 14
`
`42.
`
`Defendants’ conduct, as set forth herein, was willful and has caused
`
`significant damages to Plaintiff and the others similarly situated.
`
`43.
`
`Plaintiff and all other delivery drivers classified by Defendants as
`
`independent contractors but treated as employees and with wages recorded on W2 forms
`
`in New Mexico employed by Defendants are or were subject to Defendants’ refusal to pay
`
`overtime wages.
`
`44.
`
`Defendants’ conduct described herein is part of a continuing course of
`
`conduct.
`
`COUNT I: VIOLATION OF THE FLSA, 29 U.S.C. §§ 201 et seq.
`
`45.
`
`All previous paragraphs are here incorporated as though fully set forth
`
`herein.
`
`46.
`
`Section 207(a)(1) of the FLSA provides, in pertinent part:
`
`Except as otherwise provided in this section, no employer shall employ any
`of his employees who in any workweek is engaged in commerce or in the
`production of goods for commerce, or is employed in an enterprise engaged
`in commerce or in the production of goods for commerce, 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.
`
`There are no FLSA exemptions applicable to Plaintiff or to other members of
`
`47.
`
`the federal collective action.
`
`48.
`
`For purposes of the FLSA, the employment practices of Defendants were and
`
`are uniform in all respects material to the claims asserted in this Complaint.
`
`49.
`
`Plaintiff and the others similarly situated regularly worked more than 40
`
`hours per week but did not receive overtime pay.
`
`
`
`10
`
`
`
`Case 1:16-cv-00350-JCH-KK Document 1 Filed 04/27/16 Page 11 of 14
`
`50.
`
`At all relevant times, Defendants have had gross operating revenues in excess
`
`of $500,000.
`
`51.
`
`In committing the wrongful acts in violation of the FLSA, Defendants acted
`
`willfully, in that they knowingly, deliberately, and intentionally failed to pay overtime
`
`premium wages to Plaintiff and others similarly situated.
`
`52.
`
`As a result of Defendants’ failure to pay overtime premium wages, Plaintiff
`
`and the others similarly situated were damaged in an amount to be proven at trial.
`
`53.
`
`Plaintiff demands that he and the others similarly situated be paid overtime
`
`compensation as required by the FLSA for every hour of overtime worked in any work
`
`week for which they were not compensated, plus interest, damages, penalties, and
`
`attorneys’ fees as provided by law.
`
`COUNT II: VIOLATION OF NMMWA, NMSA 1978. § 50-4-22
`
`54.
`
`All previous paragraphs are here incorporated as though fully set forth
`
`herein.
`
`55.
`
`Plaintiff and those similarly situated are or were “employees” as that term is
`
`defined by the NMMWA.
`
`56.
`
`Defendants are “employers” as that term is defined by the NMMWA.
`
`57.
`
`The NMMWA entitles employees to overtime compensation at not less than
`
`“one and one-half times the employee’s regular hourly rate of pay for all hours worked in
`
`excess of forty hours.” NMSA 1978, § 50-4-22.
`
`
`
`11
`
`
`
`Case 1:16-cv-00350-JCH-KK Document 1 Filed 04/27/16 Page 12 of 14
`
`58.
`
`Defendants violated the NMMWA by failing to pay Plaintiff and the collective
`
`class members any compensation, including overtime compensation, for hours worked
`
`over 40 per week.
`
`59.
`
`Plaintiff’s position as a distributor does not meet the standards for
`
`exemption under the NMMWA.
`
`60.
`
`Plaintiff and those similarly situated have been damaged in an amount equal
`
`to their unpaid overtime wages.
`
`61.
`
`Defendants, through their policies and practices described above, willfully
`
`violated the NMMWA, including but not limited to by failing to pay Plaintiff and others
`
`similarly situated their earned wages for all hours worked and by failing to pay Plaintiff
`
`and others similarly situated overtime pay for all hours worked in excess of forty hours.
`
`62.
`
`Plaintiff and others similarly situated are entitled to treble damages plus
`
`statutory interest, reasonable attorneys’ fees, and other appropriate injunctive relief.
`
`Jury Demand
`
`63.
`
`Plaintiff and others similarly situated demand a jury on all issues to be tried
`
`in this matter.
`
`WHEREFORE, Plaintiff, on behalf of himself and other members of the collective class,
`
`seeks the following relief against Defendants:
`
`A.
`
`Designation of this action as a collective action on behalf of Plaintiff and
`
`those similarly situated, and prompt issuance of notice pursuant to 29 U.S.C. § 216(b) and
`
`pursuant to the NMMWA to all those similarly situated apprising them of the pendency of
`
`
`
`12
`
`
`
`Case 1:16-cv-00350-JCH-KK Document 1 Filed 04/27/16 Page 13 of 14
`
`this action and permitting them to assert timely claims in this action by filing individual
`
`consent forms;
`
`B.
`
`Judgment that Plaintiff and those similarly situated are non-exempt
`
`employees entitled to protection under the FLSA;
`
`C.
`
`Judgment for violation of the overtime provisions of the FLSA and the
`
`NMMWA;
`
`D.
`
`Judgment that Defendants’ violations of the FLSA and the NMMWA were
`
`willful, not in good faith, and not based on reasonable grounds;
`
`E.
`
`Judgment that Defendants compensate Plaintiff and the other members of the
`
`collective class for the reasonable value of the benefits Plaintiff and the other members of
`
`the collective class provided to Defendants.
`
`F.
`
`Pursuant to the FLSA, that Plaintiff and the other members of the collective
`
`class be:
`
`i. Awarded unpaid overtime wages at overtime rates for all overtime work as
`
`described in this Complaint;
`
`ii. Awarded liquidated damages, attorneys’ fees and costs;
`
`iii. Awarded punitive damages in an amount to be determined at trial; and
`
`iv. Awarded any such other and further relief as the Court deems just and
`
`proper.
`
`G.
`
`Pursuant to the NMMWA, that Plaintiff and the other members of the
`
`collective class be:
`
`i. Awarded unpaid overtime wages plus treble damages;
`
`
`
`13
`
`
`
`Case 1:16-cv-00350-JCH-KK Document 1 Filed 04/27/16 Page 14 of 14
`
`ii. Awarded lost wages and liquidated damages;
`
`iii. Awarded pre- and post-judgment interest as permitted by law;
`
`iv. Awarded costs and reasonable attorneys’ fees pursuant to NMSA 1978, § 50-
`
`4-26(E);
`
`v. Awarded equitable relief in the form of payment for state and federal income
`
`tax consequences for receiving unpaid wages covering more than one
`
`calendar year; and
`
`vi. Awarded any such other and further relief as the Court deems just and
`
`proper.
`
`Respectfully Submitted,
`
`JONES, SNEAD, WERTHEIM
` & CLIFFORD, P.A.
`
`By:
`
`
`
`/s/ Jenny F. Kaufman
`JERRY TODD WERTHEIM
`SAMUEL C. WOLF
`JENNY F. KAUFMAN
`1800 Old Pecos Trail
`Post Office Box 2228
`Santa Fe, New Mexico 87504
`Tel. (505) 982-0011
`Fax. (505) 989-6288
`
`
`
`
`
`
`
`14
`
`