US FedEx drivers ruled employees

Oakland, Calif. — Over two thousand FedEx drivers in California can now consider themselves employees and not contractors—at least for the time being.

The change in status comes about after a court ruling on a case known as Alexander v. FedEx Ground. This time, the judgment comes from the United States Court of Appeals for the Ninth Circuit, which reversed an earlier, lower court ruling on the same matter. The case hinged on whether drivers for the company were, in reality, independent contractors or whether they should be classified as employees.

In presenting their ruling, the three judges on the court determined that the drivers were, in fact, employees.

Judge Stephen S. Trott [who wrote the main decision] said, “FedEx’s labeling of the drivers as ‘independent contractors’ in its Operating Agreement did not conclusively make them so.”

The judgment continues: “As a central part of its business, FedEx Ground Package System Inc. (“FedEx”), contracts with drivers to deliver packages to its customers. The drivers must wear FedEx uniforms, drive FedEx-approved vehicles, and groom themselves according to FedEx’s appearance standards. FedEx tells its drivers what packages to deliver, on what days, and at what times. Although drivers may operate multiple delivery routes and hire third parties to help perform their work, they may do so only with FedEx’s consent. FedEx contends its drivers are independent contractors under California law. Plaintiffs, a class of FedEx drivers in California, contend they are employees. We agree with plaintiffs.”

The ruling applies to 2,300 individuals who were full-time delivery drivers for FedEx in California between 2000 and 2007 and who worked for one of two divisions: FedEx Ground or FedEx Home Delivery.

According to the lawyers representing the plaintiffs, this decision is important for its clients as being contractors was costing them financial hardships. It cited a number of costs the drivers had to incur, including:

• being required to pay out of out of pocket for everything from the FedEx Ground branded trucks they drove (painted with the FedEx Ground logo) to fuel, various forms of insurance, tires, oil changes, maintenance, etc. as well as their uniforms, scanners and even workers compensation coverage.
• in some cases being required to pay the wages of employees who FedEx Ground required them to hire to cover for them if they were sick or needed a vacation, to help out during the Christmas rush, and in some cases to drive other FedEx Ground trucks.

The counsel for the plaintiffs added this finding was important as it could influence other similar cases before the courts.

“The court’s finding in Alexander that drivers in California are covered by California’s workplace protection statutes not only impacts one of FedEx Ground’s largest workforces but could influence the outcome in over two dozen cases nationwide in which FedEx Ground drivers are challenging the legality of their independent contractor classification.”

FedEx responded with a statement explaining it currently uses a completely different hiring model when dealing with drivers.

“Since 2011, FedEx Ground has only contracted with incorporated businesses, which treat their drivers as their employees. FedEx Ground will seek review of these decisions, including review by the entire Ninth Circuit.”

It also contends that its earlier staffing practice was valid.

“We fundamentally disagree with these rulings, which run counter to more than 100 state and federal findings—including the US Court of Appeals for the D. Circuit—upholding our contractual relationships with thousands of independent businesses,” said FedEx Ground senior vice-president and general counsel Cary Blancett. “The operating agreement on which these rulings are based has been significantly strengthened in recent years, and we look forward to continuing to work with service providers across our network to provide customers the industry’s most reliable service.”