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Wonder Bread Settles Class Action Lawsuit

Wonder Bread Settles Class Action Lawsuit

Monday, December 12th, 2016

Things are looking up for Wonder Bread. The embattled company saw significant gains in the stock market last weekend after settling some outstanding business with aggrieved employees.  

In a filing, last Friday, December 9, Wonder Bread’s parent company Flowers Foods declared that it has finally reached a settlement for a class action lawsuit originally filed in March of 2013, according to a CNBC report. Shares of the company’s stock, which had fallen more than 10 percent during 2016, immediately rose by 17 percent.

Photo Source: Google Finance

The company later pared some of those gains, but still ended the day with a robust 13 percent increase in its stock price.

The settled lawsuit had focused on whether Flower Foods misclassified distributors as independent contractors when they should have been considered employees. The complaint, filed in North Carolina, alleged “violations of the Federal Fair Labor Standards Act.”

As part of the settlement the company agreed to pay $5.2 million in damages and $3.8 million in attorney fees. The company will, however, keep its current independent distributor model, in which Flowers sells distributors exclusive rights to defined territories. According to CNBC: “Certain non-economic terms…intended to strengthen and enhance the independent contractor model” were also included in the settlement.

For more important developments in the deli industry, check in with Deli Market News.

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