We highlight in this past month’s news update two class action settlements entered into by bakery companies alleged to have misclassified product distributors as independent contractors. One of those baked goods companies has now incurred over $47 million settling IC misclassification cases brought by distributors. We also comment below on a new class action lawsuit filed against one of those bakery product companies.
Selected companies in this industry have been targeted by class action lawyers representing independent distributors who claim that they are employees entitled to overtime and/or expense reimbursement. Calling themselves “delivery drivers,” the distributors’ allegations tend to minimize their entrepreneurial independence and focus on alleged direction and control by the defendant companies.
There are ways by which companies in this and most other industries can minimize these types of lawsuits and maximize their compliance with independent contractor laws. Some food manufacturers that contract with distributors as well as a host of other companies that utilize independent contractors have used a process such as IC Diagnostics™ to structure, document, and implement their IC relationships in a manner that should satisfy independent contractor laws in virtually all states as well as under federal law. Many companies that have not taken effective steps to meaningfully enhance their level of compliance have incurred considerable resources to defend cases they could have avoided or paid large amounts to settle such cases.
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