Federal Court Rejects Effort to Recoup  Payments from Employer to Misclassified Drivers to Offset Wage Claims

The United States Department of Labor announced the decision by a federal court to reject a claim by a business that allegedly misclassified drivers that would have allowed the business to recoup payments from the misclassified drivers to offset their claims for wages.

WASHINGTON – When a group of bakery distribution drivers filed a lawsuit alleging that Bimbo Foods Bakeries Distribution LLC owed them overtime compensation and misclassified them as independent contractors rather than employees covered by the Fair Labor Standards Act, the company countersued the workers. In its counterclaim, Bimbo Bakeries demanded that the workers be required to pay monies earned working for the company back to their employer to offset wages and liquidated damages the court might award if it concluded the workers were employees owed overtime pay.

On Dec. 5, 2023, the U.S. District Court for the District of Vermont rejected the company’s attempt to recoup the costs of its alleged FLSA violations from its own workers when it granted a motion by the U.S. Department of Labor to dismiss the counterclaim. Importantly, the court noted that Bimbo Bakeries was trying to benefit from its allegedly unlawful misclassification decision and concluded that the FLSA does not allow for state law counterclaims where they cut against the act’s central purpose.

The court also recognized that employer counterclaims such as this one would give employers an incentive to violate federal wage laws and then seek reimbursement for their violations. In addition, the court pointed out such a counterclaim might discourage workers from asserting their rights privately or with the department.

“The court’s dismissal of Bimbo Bakeries’ counterclaim is a significant decision that strengthens the rights of workers under the Fair Labor Standards Act,” explained Solicitor of Labor Seema Nanda. “The Department of Labor will always be concerned when an employer engages in conduct that discourages employees from raising their voices. This includes retaliation, coercive employment terms or—as the court recognized here—illegal attempts to assert counterclaims against workers who may have legitimate claims for unpaid wages.”

The workers’ lawsuit includes drivers in Connecticut, New York and Vermont.

View the opinion and order granting the department’s motion to dismiss the counterclaim. The department’s regional Office of the Solicitor in Boston litigated the case.

Bimbo Foods Bakeries Distribution LLC is affiliated with Bimbo Bakeries USA, the nation’s largest commercial baking company, and maker of goods sold under dozens of well-known brands including Arnold, Ball Park, Beefsteak, Boboli, Entenmann’s, Freihofer’s, Lender, Sara Lee and Thomas’. Bimbo Bakeries USA is proud part of Grupo Bimbo, the world’s largest baking company with operations in 34 countries.

The FLSA requires that most employees in the U.S. be paid at least the federal minimum wage for all hours worked and overtime pay at not less than time and one-half the regular rate of pay for all hours worked over 40 in a workweek. The law also guarantees employees the right to raise wage and hour concerns, participate in U.S. Department of Labor wage investigations and file private wage actions without retaliation from their employers.

For more information about the FLSA and other laws enforced by the Wage and Hour Division, contact the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Learn more about the division, including a search tool to use if you think you may be owed back wages collected by the division. The department protects workers regardless of immigration status and can communicate with workers in more than 200 languages.

Source: Federal court rejects Bimbo Bakeries’ effort to countersue drivers who asserted their right to overtime compensation | U.S. Department of Labor

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