Snack Food Supplier S-L Distribution Facing Suit Over Alleged Worker Misclassification, Wage Deductions [UPDATE]
Last Updated on November 11, 2021
Mode v. S-L Distribution Company, Llc et al
Filed: March 22, 2018 ◆§ 3:18cv150
A North Carolina man has filed a proposed class and collective action against snack food supplier S-L Distribution Company.
Case Updates
November 9, 2021 – Parties Reach $6M Settlement
The parties in the case detailed on this page have asked the court to approve a $6,000,000 settlement to end the litigation.
According to a November 5 memo, the deal will provide an average payout of $11,472 for each of the 331 distributors who elected to join the action, with payment amounts varying based on the number of weeks each distributor worked for S-L.
The parties have argued that the settlement is “fair and reasonable” given the significant payout each plaintiff will receive and the difficulties they would face if they continued to litigate their claims.
The settlement now awaits the judge’s approval.
A North Carolina man has filed a proposed class and collective action against snack food suppliers S-L Distribution Company, LLC; S-L Distribution Company, Inc.; and S-L Routes, LLC over the companies’ alleged failure to pay proper wages.
The lawsuit explains the defendants contract with “independent business operators” (IBOs) to transport snack foods from the companies’ warehouses to retail stores along assigned routes. Though the plaintiff and similarly situated workers were classified by the defendants as non-employee independent contractors, the lawsuit argues the “economic realities” of the job and the individuals’ dependence on the defendants indicates that the independent contractor designation is inaccurate. Specifically, the complaint states IBOs have virtually “no input into basic business decisions” concerning the types of products sold, prices, and promotions. Further, the case asserts IBOs tend to work for the defendants for years at a time, and for typically long hours each week—without time-and-a-half overtime pay.
The defendants’ IBOs are generally paid based on the volume of food products distributed, the complaint says. The issue with this structure, the lawsuit argues, is that various deductions are taken from the IBOs’ compensation each week—administrative service charges, leased vehicle charges, charges for stale or unsold products—without authorization. As a result of the deductions, the IBO’s hourly compensation allegedly drops below the federal minimum wage, the case claims.
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