Campbell’s in hot water after San Diego files labor lawsuit

SAN DIEGO (CN) — The city of San Diego filed a lawsuit against The Campbell's Company and its subsidiary companies on grounds that it misclassified hundreds of California workers as independent contractors who are part of its delivery services.

The city claims The Campbell’s Company uses a direct-store-delivery model that requires workers to stock and merchandise its products, such as Pepperidge Farm cookies and Snyder’s pretzels, which it owns, directly to locations. The San Diego City Attorney’s Office says the canned soup company maintains extensive control over these workers and relies on them for its core business operations but only identifies them as independent contractors.

As contractors, these workers are denied minimum wage, overtime pay, sick leave and other legal protections required under the law, the city attorney’s office says. 

“California law is clear: workers who perform essential functions under a company’s control are employees, not independent contractors,” San Diego City Attorney Heather Ferbert said in a press release Tuesday. “Misclassification robs workers of basic protections, hurts law-abiding businesses, and undermines our economy. This lawsuit seeks to end these unlawful practices and restore fairness for workers and competitors alike.” 

California workers are presumed to be employees unless the hiring company can satisfy the ABC Test, a three-pronged California labor law standard used to determine if an independent contractor is actually an employee. The San Diego City Attorney says The Campbell’s Company fails all three of its tests. 

Snyder’s-Lance Inc. and Pepperidge Farm Inc., both subsidiaries of The Campbell’s Company, are also named defendants. 

“Through both subsidiaries, Campbell’s hires hundreds of last-mile delivery and merchandising workers to distribute and deliver its products and to fulfill its promises to retail customers,” the attorney’s office says in its complaint. “But rather than classifying its workers as employees and giving them a basic minimum wage and standard workplace protections, Campbell’s misclassifies them as ‘independent contractors’ and makes them sign distribution agreements. These agreements bind natural individuals (sometimes ‘distributors’) to perform the core direct-store-delivery function by ordering adequate Campbell’s product, delivering it, and merchandising the product on store shelves.”

The plaintiffs say The Campbell’s Company operates one of the largest direct-store-delivery distribution networks in the country for its snack foods, of which its delivery drivers are an integral part.

“In short, they are the ‘delivery’ part of Campell’s ‘direct-store-delivery’ business model,” they say in the complaint. “And defendants exert heavy control over these workers under both the hiring contracts and in fact.”

In the lawsuit filed Monday, the city seeks an injunction against The Campbell’s Company to stop the misclassification of California workers, as well as restitution for affected workers and civil penalties under California’s Unfair Competition Law. 

The plaintiffs say The Campbell's Company earned $4 billion just in snack food sales in 2025.

In addition to its soups, The Campbell’s Company also owns a range of snacks and drinks, such as Goldfish, Kettle Brand chips and V8 juice. 

Based in Camden, New Jersey, the company has more than two dozen factories in the United States, according to its website. 

Under the ABC Test, hiring companies must prove that 1) the worker is free from control and direction of the hiring entity in connection with the performance of the work, 2) the worker’s job is outside the usual course of the hiring company’s business, and 3) the worker is engaged in independent work of the same nature outside of their role with the hiring company. The test was established in 2018 under Dynamex Operations West Inc. v. Superior Court of Los Angeles and later enshrined into law in 2020. 

The Campbell’s Company did not respond to request for comment on the lawsuit.