US Department of Labor Claims Fair Labor Standards Act Does Not Allow Employer to Countersue Workers who Allege Misclassification

The United States Department of Labor announced that it is seeking a court order to dismiss claims by an employer against workers who alledged that they were misclassified as independent contractors.

WASHINGTON – The U.S. Department of Labor has requested that a federal court in Vermont allow the department to intervene and seek the court’s dismissal of a counterclaim that Bimbo Bakeries USA Inc. – one of the nation’s largest baking companies – has asserted against its own workers who are seeking the overtime compensation that they are allegedly owed.

In October 2022, bakery distributor drivers who work for Bimbo Bakeries USA Inc. and Bimbo Foods Bakeries Distribution LLC filed a private lawsuit in the U.S. District Court for the District of Vermont alleging they were misclassified as independent contractors, rather than employees as defined by the Fair Labor Standards Act. They claimed that, as employees, the companies owe them overtime back wages.

Bimbo Bakeries then countersued the drivers, seeking restitution of any money the workers earned while working for the companies, trying to offset any back wages or liquidated damages the court may ultimately award to the workers. The department’s Office of the Solicitor now seeks to intervene to dismiss Bimbo Bakeries’ counterclaim. The department argues that the FLSA does not allow alleged employers to assert these types of claims against their workers who are seeking back wages.

In its filing, the department states that courts have recognized similar counterclaims tend to discourage workers from asserting their FLSA rights, which would include the right to participate in the department’s investigations and enforcement cases. In addition, the department explained that its enforcement efforts may suffer if employers raise impermissible counterclaims in FLSA cases, as the department depends on workers coming forward to report potential FLSA violations.

“Companies use counterclaims like this one to circumvent the requirements of the Fair Labor Standards Act. These companies want to have it both ways – they want the benefits of not paying overtime wages and, if a court says they must pay under the FLSA, they want their employees to reimburse them for their own violations of the law. That is simply not allowed,” explained Solicitor of Labor Seema Nanda.

“What’s at stake here is workers’ ability to exercise their rights under the FLSA without the fear of being impermissibly countersued by their employers,” Nanda added. “Should Bimbo Bakeries be allowed to proceed with its counterclaim, which is foreclosed by the FLSA, workers may well be discouraged from asserting their rights, including their right to cooperate in Department of Labor investigations and litigation.”

View the department’s memorandum in support of intervention and proposed memorandum in support of dismissal. The regional Office of the Solicitor in Boston is litigating the case.

Owned by Mexico’s Grupo Bimbo, S.A.B de C.V., Bimbo Bakeries USA operates more than 50 manufacturing locations in the U.S. with more than 11,000 distribution routes delivering baked goods under more than a dozen brand names, including Arnold, Artesano, Ball Park, Bimbo, Boboli, Brownberry, Entenmann’s, Little Bites, Marinela, Mrs. Baird’s, Oroweat, Sara Lee, Stroehmann and Thomas’.

The FLSA, enforced by the department’s Wage and Hour Division, 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 required 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 in federal court without retaliation from their employers.

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

Source: US Department of Labor: Fair Labor Standards Act does not allow Bimbo Bakeries USA’s, Bimbo Foods’ countersuit against bakery drivers | U.S. Department of Labor

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