According to the law firm press release, on August 10, 2016, Flowers Foods disclosed in a Current Report filed with the SEC that the U.S. Department of Labor notified Flowers Foods that the Company was scheduled for a compliance review under the Fair Labor Standards Act. The Company further stated that it intended to cooperate with the Department, and that because the review process was confidential, Flowers Foods would not comment further at that time. On this news, Flowers Foods’ stock price fell $1.60 per share, or 9%, to close at $16.15 per share on August 10, 2016, on unusually heavy trading volume.
Then, after the market closed on August 10, 2016, the Company issued a press release announcing Q2 2016 financial results. Therein, the Company announced disappointing financial results for the quarter, and that it was lowering its 2016 guidance. On this news, Flowers Foods’ stock price fell $1.20 per share, or 7.4%, to close at $14.95 per share on August 11, 2016, on unusually heavy trading volume.
The complaint charges Flowers Foods and certain of its officers with violations of the federal securities laws. Specifically, the complaint alleges that Defendants made false and/or misleading statements and/or failed to disclose: (1) that the Company was improperly classifying employees as independent contractors; (2) that the misclassification exposed the Company to legal liability and/or negative regulatory action; (3) that proper classification would have a negative impact on the Company’s operations; and (4) that, as a result of the foregoing, Defendants’ statements about Flowers Foods’ business, operations, and prospects, were false and misleading and/or lacked a reasonable basis.
On October 21, 2016, the Court issued an Order appointing Lead Plaintiff and Counsel.
On November 21, 2016, this case was transferred to the Middle District of Georgia.
A consolidated Complaint was filed on January 12, 2017. Defendants filed a Motion to Dismiss the consolidated Complaint on March 13. On March 23, 2018, the Court issued an Order granting in part and denying in part Defendants' Motion to Dismiss.
On May 10, 2019, the parties filed a notice to inform the Court that a settlement had been reached. The parties entered into a Stipulation and Agreement of Settlement on July 12, 2019. The Court issued an Order preliminarily approving the Settlement on August 7.