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Jul
2015
28

Another KS Court Rules In Favor of Misclassified FedEx Drivers; 19 Class Actions Pending

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The Seventh Circuit Court of Appeals has ruled in favor of 500 drivers in Kansas who sued FedEx in 2003 claiming they were misclassified as independent contractors. The decision upholds a ruling from the Kansas Supreme Court which found that the drivers met the state’s 20-point test to determine their employment status under the Kansas Wage Payment Act.

Drivers in the case have sued for back pay, overtime, lost wages, and the chance to be reimbursed for expenses related to their independent contractor classification. The ruling means the momentum built by current and former FedEx workers grows stronger again, further setting precedent for the remaining 19 class action lawsuits the company faces in the Seventh Circuit.

The contractor model at the center of the Kansas case was done away with in 2011, although FedEx has never been forced to admit it misclassified its workers. Many of the current cases were filed nearly a decade ago. Yet, the slow wheels of justice and constant appeals by FedEx mean they are only heating up now, in an age of increased awareness about employee misclassification, wage theft, and other unscrupulous business practices.

Earlier this year, the Ninth Circuit Court of Appeals in California ruled that 2,300 individuals working for FedEx Ground were misclassified as independent contractors. FedEx agreed to pay $228 million following the court’s decision.

In a statement, FedEx Ground Senior Vice President and General Counsel Cary Blancett said:

“We fundamentally disagree with these rulings, which run counter to more than 100 state and federal findings – including the U.S. Court of Appeals for the D.C. Circuit – upholding our contractual relationships with thousands of independent businesses. 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.”

The decision in the case was disclosed in FedEx’s most recent filing with securities regulators. While no monetary damages have been determined, it is likely that the figure will resemble the massive agreement in the landmark California case. FedEx suggests it has already made provisions in case it lost in Kansas.

According to Nasdaq, the decision could effect future cases against Uber and other on-demand economy companies who rely on a business model similar to the one at the center of FedEx’s legal woes. Uber recently lost employee misclassification cases in Florida and California. Most recently, Toronto taxi drivers filed a lawsuit against Uber asking for $300 million in damages.

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