In a joint filing last month, Hampton Creek and the plaintiffs said they were exploring ways to resolve their differences without going through the hassle and expense of protracted litigation:
“The parties have agreed to explore a potential resolution of this case, potentially through private mediation, and to that end have agreed to a set of targeted discovery they will need in order to sufficiently evaluate the collective claims and Defendant's defenses...
"Defendant's time to answer, move or otherwise respond to Plaintiffs' complaint be and hereby is extended through and including August 12, 2016."
What's the difference between an employee and an independent contractor?
Hampton Creek stands accused of violating the Fair Labor Standards Act (FLSA) and the New York Labor Law (NYLL) by classifying its 'relationship specialists' - people recruited to do instore demos and other activities - as independent contractors, rather than employees (Castagna et al v. Hampton Creek, Inc 2:16-cv-00760).
The distinction matters because employees can hold their employers accountable for violations of wage and hour laws, such as those requiring employers to pay their employees for all hours worked, pay additional compensation for overtime, provide meal and rest breaks, and reimburse employees for work-related expenses. Independent contractors, by contrast, enjoy fewer rights.
While this is not a new issue in employment-related litigation, high-profile cases against firms including Uber (which has just agreed to pay $100m to settle a class action) and FedEx (which has agreed to a $228m settlement) have raised awareness of the issue, and a series of food companies including Pepperidge Farm (Campbell Soup), Flowers Foods, GrubHub, InstaCart, DoorDash, Caviar, Bimbo Bakeries and Albertsons have all been sued for allegedly misclassifying 'sales development associates,' drivers, delivery people, and instore demo providers in recent years.
San Francisco-based Hampton Creek - which made its name by launching an egg-free spread called Just Mayo - has since expanded its portfolio to include cookies, dressings, cake mixes and other products, which are sold to retail and foodservice customers in the US and overseas.
Attorney: Worker classification lawsuits fertile ground for plaintiff's attorneys
Rachel Atterberry, partner in the litigation practice group at Freeborn & Peters LLP, told FoodNavigator-USA that the practice of classifying workers as ‘independent contractors' rather than full-blown employees, was increasingly under attack by courts and government agencies.
Exploring the line between the two classifications, she explained, was fertile ground for plaintiffs’ attorneys "given the statutory penalties involved, the numbers of workers that can be joined in the lawsuit (thus increasing damages and, potentially, fees) and the prevalence of violations across industries.”
Pepperidge Farm, which has also recently been targeted in one such case, has just filed papers vigorously contesting the allegations.