Coronado Jr. v. Flowers Food, Inc.
1:16-cv-00350
| D.N.M. | Aug 11, 2021Background
- Plaintiffs were route "distributors" who purchase Flowers Baking Co. products at set terms and deliver, stock, rotate, and service those products to retail Outlets in assigned territories under standardized Distributor Agreements.
- Distributor Agreements label distributors as independent contractors, require compliance with “good industry practice,” and give FBC‑El Paso discretion over prices, product mix, discounts, and termination for breach; distributors use company handheld devices and warehouse space provided by the company.
- The vast majority of sales occur through national chain accounts covered by Direct Store Delivery (DSD) agreements that set plan‑o‑grams, delivery requirements, and pricing; distributors have limited ability to change those terms.
- Area Sales Directors (ASDs) supervise and push distributors to increase in‑store product levels to hit corporate sales targets; ASDs receive sales training and bonuses tied to growth goals.
- Distributors’ pay is tied to product volume but is affected by the company’s pay‑by‑scan system (payment occurs when consumers buy product) and company discretion over discounts and stale‑charge waivers, raising dispute over whether pay is true commission.
- Procedural posture: Defendants moved for summary judgment asserting the FLSA outside‑sales exemption; the court denied summary judgment because genuine issues of material fact exist as to whether distributors make "sales" and whether sales are their primary duty.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether distributors "make sales" under the FLSA/outside‑sales exemption | Distributors solicit, adjust orders, call on accounts, and are compensated based on volume — functions constituting sales | Distributors mainly deliver, stock, and service product; DSDs and company control mean distributors do not obtain commitments or set prices — they merely make product available for sale | Denied SJ — genuine dispute whether distributors obtain commitments / perform sales |
| Whether making sales is distributors' "primary duty" | Sales/solicitation are integral and income‑driving; plaintiffs attempt to develop accounts | Most time spent on delivery, stocking, rotation, and other promotional/service tasks controlled by company/ASDs; sales not the principal duty | Denied SJ — genuine dispute whether sales are the principal, main duty |
Key Cases Cited
- Christopher v. SmithKline Beecham Corp., 567 U.S. 142 (definition of outside salesman; "sale" construed broadly)
- Clements v. Serco, Inc., 530 F.3d 1224 (sale’s touchstone is obtaining a commitment)
- Encino Motorcars, LLC v. Navarro, 138 S. Ct. 1134 (FLSA exemptions receive a fair, not narrow, interpretation)
- Meza v. Intelligent Mexican Mktg., Inc., 720 F.3d 577 (explaining rationale of outside‑sales exemption and commission‑style compensation)
- Hodgson v. Klages Coal & Ice Co., 435 F.2d 377 (drivers performing delivery and sales functions held non‑exempt where solicitations did not independently increase store sales)
- Martin v. Indiana Michigan Power Co., 381 F.3d 574 (employer bears burden to prove each element of an FLSA exemption)
