BURLINGTON, VT. — The US District Court of Vermont on Dec. 5 dismissed a counterclaim made by Bimbo Bakeries USA and Bimbo Food Bakeries Distribution LLC for alleged “unjust enrichment” given to delivery drivers. The counterclaim was connected to a lawsuit brought by delivery drivers who sought overtime pay. The drivers and the US Department of Labor had filed motions to dismiss the counterclaim.
Drivers who delivered and stocked baked foods in grocery stores and other retail outlets in Vermont, Connecticut and New York initially filed the lawsuit on Oct. 28, 2022, in the US District Court of Vermont. They claimed Bimbo misclassified them as independent contractors and that they instead were Bimbo employees who should be entitled to overtime pay for working more than 40 hours per week.
Bimbo Bakeries USA, the US business of Grupo Bimbo SAB de CV, on Jan. 23, 2023, filed court documents denying most of the accusations. Bimbo in the counterclaim added that, if the court finds the drivers to be employees under Vermont labor law, Bimbo should receive restitution for benefits given to the drivers. The benefits included payments made to the drivers as consideration for advertising Bimbo’s products and profits drivers made by selling geographic distribution rights.
The drivers and the Department of Labor (DOL) filed motions to dismiss Bimbo’s counterclaim. They argued the counterclaim should be dismissed because allowing such counterclaims contingent upon Fair Labor Standards Act (FLSA) liability would “chill” FLSA enforcement and would allow employers to “use the ongoing threat of counterclaims to discourage (workers) from asserting the FLSA rights.” The DOL on March 21 requested the court in Vermont to allow the DOL to intervene and seek the court’s dismissal of the BBU counterclaim.
Appellate courts previously have explained that allowing counterclaims against alleged FLSA violations can be counterproductive for the statute’s enforcement, according to the district court in Vermont,
“The court’s dismissal of Bimbo Bakeries’ counterclaim is a significant decision that strengthens the rights of workers under the Fair Labor Standards Act,” said 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.”
