1099 Risk Blog

FedEx Case Litigator Faris Takes Down UPS for $12.8 Million

It must have been a happy holiday season for Lynn Rossman Faris, Partner at Leonard Carder and viritually a rock star in the world of class action independent contractor misclassification lawsuits, after the news broke in mid-December. A federal judge in California had approved a mediated $12.8 million settlement for a class of 660 UPS drivers who claimed they were denied benefits and overtime due to their misclassification as independent contractors.

If you follow the FedEx independent contractor misclassification case, you may recognize her name. I had the pleasure of hearing Faris speak on a panel at the SIA Risk Forum last summer regarding her experiences as Lead Plaintiff Attorney in the FedEx drivers multi-district litigation, a case that is apparently only just warming up, with class action certifications in over 20 jurisdictions.

Little did I realize at the time that she was also hip deep in a corresponding class action lawsuit against UPS Supply Chain Solutions.

Independent contractor classification can be a confusing issue, as the determination of worker status is not a linear equation. However, Faris recently emphasized in an interview with the Legal Broadcast Network, “I think UPS shouldn’t have had much difficulty with these drivers. They don’t work for anyone else. . . In California some years back, before UPS acquired the company (Sonic Air), the tax agency in California made a determination of employee status for these workers.”

In her discussion of the determination of worker status – that is, whether an individual is an independent contractor or employee – Faris highlights the overriding issue of whether the company that the individual works for has the right to control the manner of performing the work. And under Federal overtime law, whether the individual is economically dependent on the company for their livelihood is also a key indicator. In this case, it apparently became clear that the courier drivers were in fact economically dependent on UPS. Had UPS simply paid attention to the previous status determination, or exercised best practices for worker classification, they would not have ended up in this place.

Class notices are going out to the 660 drivers who may have a share in the pool of money, and the judge will make a final decision after a fairness hearing in mid-March. A representative from UPS has indicated that they are making changes in the way they use independent contractors as a result of the case.

So what’s next for former union activist Faris, and for independent contractor misclassification litigation? Apparently the fun is just beginning; she has filed at least ten new briefs, and says,  “I’m very busy. Misclassification cases are becoming more and more common. There is a rash of litigation around this issue."

Major companies -- especially known brands in the Fortune 2000 -- might take this closing sentiment as a not-so-thinly veiled warning: 

"I think that people should be very careful, in this day and age when governments are looking to increase their tax revenue, and when more and more people who work for a living are realizing that they may be misclassified. I think it’s a very risky business for major companies to wholesale classify people as independent contractors, especially when the work they are performing is essential to the business operation, as it is in the UPS case and also with regard to FedEx Ground.”

 
Listen to the full interview from LBN here on Youtube.

To learn from the finest legal minds in independent contractor litigation, see our Events page to read about the 2010 SIA Co-Employment and Risk Forum in Washington, DC. We’ll be there as one of the sponsors, so you’ll have an opportunity to meet the MBO Partners team.

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