MANHATTAN (CN) — On remand back from the United States Supreme Court, two Wonder Bread truck drivers asked a federal appeals panel on Wednesday afternoon to find that their civil claims for unpaid overtime compensation should be resolved through the courts instead of arbitration.
Wonder Bread parent company Flowers Foods maintains that the franchisee delivery drivers, Neil Bissonnette and Tyler Wojnarowski, were independent contractors who own their small business, so they cannot invoke the loophole in the Federal Arbitration Act exempting them from mandatory arbitration.
The company argues the act applies only to transportation workers, which they say the two drivers are not.
Flowers Foods asked the appeals panel to affirm the lower court’s judgment granting its motion to dismiss and to compel arbitration.
Bissonnette and Wojnarowski work full-time hauling goods for Flowers Foods, the manufacturer of Wonder Bread, and are tasked with driving a commercial truck full-time delivering baked goods that were manufactured at Wonder Bread’s out-of-state commercial bakery locations from a Waterbury, Connecticut warehouse to stores throughout the state.
Represented by Boston-based attorney Harold Lichten, the drivers argued in an appeals brief that their status as exempt from arbitration should be affirmed, and if necessary the panel should remand the case back to the Connecticut federal district court for additional discovery and a determination of these issues on a full factual record.
Flowers Foods, represented by Jones Day attorney Traci Lovitt, compared the Bissonnette and Wojnarowski to being “more like railroad owners” than transportation workers.
“These plaintiffs are business owners — they aren’t signatories to the distribution agreement,” she told the appeals panel. “The workers here are business owners who have no obligation to drive, and when the do drive, they only drive locally.”
U.S. Circuit Judge Dennis Jacobs, a George H. W. Bush appointee, interjected Lovitt to clarify: “Isn’t it the case that these folks were originally years past employees of Flowers and that they’re basically doing what they did as employees, only now that they’re doing it under different contracts?”
“Plaintiffs do not qualify as ‘transportation workers’ for three independent reasons: they are not employed in the transportation industry; they are primarily business owners, not truck drivers; and any transportation in which they do engage is exclusively intrastate,” the company wrote in appellee brief.
The drivers cited Canales v. CK Sales Co., LLC, which they described as “a virtually identical case involving the same corporate defendants,” in which the First Circuit affirmed the holding that these same drivers were transportation workers exempt from arbitration under Section 1 of the Federal Arbitration Act. The Supreme Court denied Flowers’ petition for certiorari in that case in April 2024.
U.S. Circuit Judge Maria Araújo Kahn noted that Flowers Foods was asking the Second Circuit panel to create a circuit split that conflicts with the First Circuit’s opinion in Canales, and questioned whether that requires the case to be remanded for additional fact-finding.
“Why did the First Circuit get it wrong?” Kahn, a Biden appointee asked.
“The First Circuit got ‘transportation worker’ wrong because it ignored the key fact that the district court got right,” Lovitt replied. “Which is — and this is not disputed — is that there is not a single personal performance requirement in this distribution agreement.”
“They aren’t required to drive — they chose to drive,” she said.
Kahn and Jacobs were joined on three-judge panel by U.S. District Judge Diane Gujarati, who was sitting by designation from the Eastern District of New York.
They did not rule from the bench on the appeal.
The 1925 Federal Arbitration Act forces courts to enforce arbitration clauses in employee contracts unless the worker is a seaman, railroad employee or any other class of workers engaged in foreign or interstate commerce.
Flowers hired the truck drivers as independent contractors. This forced the drivers to form shell corporations and purchase the right to transport Flowers’ goods. The drivers also paid for the trucks they drove.
Despite that classification, Bissonnette and Wojnarowski said they were Flowers employees. In 2019, the drivers sued the company for misclassifying them in violation of state and federal overtime wage laws.
In May 2020, a judge in the U.S. District Court for the District of Connecticut sided with Flowers and its subsidiaries to compel arbitration and the Second Circuit later affirmed.
But the Supreme Court said the federal appeals panel had erred in compelling arbitration on the basis that petitioners work in the bakery industry.
The justices kicked the case back down to the Second Circuit in April, ruling that truck drivers who haul Wonder Bread and other fresh-baked snack cakes can be classified as transportation workers and are thusly exempted from the Federal Arbitration Act.
The high court has attempted to define which employees get an arbitration exemption multiple times since the law took effect, finding most recently that an airport ramp agent whose job includes loading and unloading airplane cargo could be classified as exempt.
In Southwest Airlines Co. v. Saxon, the court ruled unanimously that since ramp agents were directly involved in transporting goods across state or international borders, they can be considered transportation workers under the exemption.