June, 4 2010
FedEx May Be In For Over $1 Billion
Posted by Liz Greene
FedEx May Be in For Over $1 Billion in Employee Misclassification Case
According to a press release issued yesterday by Leonard Carder, LLP, the first summary judgement on the multi-district class action lawsuit over the worker classification of FedEx Ground and Home Delivery drivers has been issued.
The judge presiding over the 63 cases issued an Opinion and Order on May 28, 2010 granting summary judgement to the drivers in Illinois.
The class action lawsuit, which has been developing over the past five years, centers on whether the delivery drivers are true independent contractors (as FedEx maintains) or are actually misclassified employees of FedEx.
The findings for Illinois means that under that state's Wage Act, which looks at factors of control establishing an employer-employee relationship, the drivers are actually employees of FedEx, and not truly a contract workforce. The laws in Illinois determining 1099 vs W-2, or whether workers are contractors or employees, are similar to those in most of the other states represented in the case.
From the press release:
"This ruling is a step forward for not only the Illinois drivers, but for many other FedEx drivers across the country whose rights arise under similar laws," according to Lynn Faris, Esq., a California lawyer and one of the lead attorneys representing the drivers who allege that FedEx has intentionally and consistently misclassified drivers as independent contractors even though they are in reality employees.
In this opinion, Judge Miller specifically found that the drivers were employees because their delivery work was an essential and necessary part of FedEx's business. The judge cited testimony by former FedEx CEO Dan Sullivan who said the drivers are the "centerpiece" of FedEx's "workforce" and they are an "essential component" of the company's business. The Court noted that the drivers - fixtures in neighborhoods across America - must wear FedEx uniforms and drive logo-ed trucks to support the FedEx brand. The court also found that FedEx structures the drivers' routes so that the trucks are in use nine to 11 hours a day; allows for the hiring of replacement drivers, but only with FedEx's approval; and the drivers were required to permit FedEx managers to have business discussions and customer service rides annually in the vehicles in order to maintain FedEx's image and reputation. "These same facts suggest that FedEx controlled the drivers work to such an extent that all the drivers were and are employees," commented Jerry Cureton, Esq., a New Jersey lawyer and counsel to the plaintiffs. Similar plaintiffs' motions for Summary Judgment in 39 other states are pending, fully briefed and awaiting decision.
The lawsuits nationwide, which collectively represent more than 27,000 drivers, are seeking to have the former and current class members reimbursed all the expenses - including wage and other employment-related taxes - they've been forced to pay as a result of being misclassified, a liability that experts estimate exceed $1 billion. For more information, visit http://www.fedexdriverslawsuit.com/
SOURCE Leonard Carder, LLP
http://www.fedexdriverslawsuit.com/
FedEx is not alone -- this case is just one of many independent contractor lawsuits unfolding around the country.
It is time for any business using independent contractors or other contract labor to perform an internal independent contractor audit and also review the worker classification criteria used to determine worker status. Understanding whether to pay a worker as a contractor versus employee is becoming more and more critical.
Share This:
