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Sep
2014
2

Fedex’s Ruthless Approach to Misclassifying Employees Ruled Unlawful by California Court

fedex misclassification ruling

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In California last week, the Ninth Circuit of Appeal ruled in favor of 2,300 FedEx drivers who were illegally misclassified as independent contractors.  The class action lawsuit covers drivers who worked in California between 2000 and 2007.  

While no monetary penalty or settlement has been announced, the ruling could potentially leave FedEx on the hook for hundreds of millions of dollars.  

In the majority opinion, Judge W. Fletcher made it clear the class of workers were misclassified, writing, “We hold that plaintiffs are employees as a matter of law under California’s right-to-control test.”

Independent contractors are a major part of FedEx’s business model. The ruling could have a tremendous effect on the company’s employees henceforth, as attorney Beth A. Ross told CNBC:

“FedEx Ground built its business on the backs of individuals it labelled as independent contractors, promising them the entrepreneurial American Dream.  However, as Judge Trott said in his concurring opinion, not all that glitters is gold.”

Those misclassified by FedEx had to deal with the following everyday occurrences:

FedEx Ground drivers were 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 workers were 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.
• After paying these expenses, a typical FedEx driver makes less than employee drivers at FedEx Ground’s competitors like UPS, and receives none of the employee benefits, like healthcare, workers compensation, paid sick leave and vacation, and retirement.
• In addition, their employment was subject to the whims of FedEx and FedEx Ground’s decisions on staffing and routes left the employee drivers stuck with expensive long-term truck leases on FedEx branded trucks.

FedEx is currently facing more than 20 similar cases across the country.

“Nationally, thousands of FedEx Ground drivers must pay for the privilege of working for FedEx 55 hours a week, 52 weeks a year,” Ross told CNBC. “Today, these workers were granted rights and benefits entitled to employees under California law. To be clear, the Ninth Circuit exposed FedEx Ground’s independent contractor model as unlawful.”

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One Comment on “Fedex’s Ruthless Approach to Misclassifying Employees Ruled Unlawful by California Court”

  1. I am a former FedEx employee and Whistle Blower that was terminated for taking pictures of FedEx Ground Trailers. I have still have the pictures in my possession. The trailers are unbelievable, FedEx Corporation running are illegal operations and they have killed many innocent people.
    California Accident, Drug Charges, Ilegal contractor model ect. Fred Smith should be held responsible. The DOT does nothing. Money, Power, Politics

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