FedEx Ground wins key case

Jill Dunn | August 25, 2010

FedEx Ground won a victory applicable to its other class action cases when a federal judge ruled the company’s owner-operators in Kansas are not employees.

On Aug. 11, Judge Robert L. Miller Jr. for the U.S. District Court for the Northern District of Indiana ruled in favor of the Tennessee-based company. The right of a company to control an employee’s work is key in common law, he said.

“If several other factors weighed strongly in favor of employee status, the right to control analysis, standing alone, might not be enough under these facts to establish independent contractor status,” Miller wrote. “But many of the other factors also point to independent contractor status, and when viewing all the various factors together, the court finds that the drivers are independent contractors as a matter of law.”

While some facts point to FedEx’s right to control, “they don’t raise to the level of control necessary to show employee status,” he said.

FedEx’s 2010 annual report, issued June 16, noted FedEx Ground was involved in 50 class action lawsuits, several individual lawsuits and 40 state tax and other administrative proceedings over the independent contractor issue.

Most of the class-action lawsuits were consolidated for administration of the pre-trial proceedings into Miller’s court.

Last week, former and current FedEx Ground Package System owner-operators filed a complaint in the U.S. District Court for the District of Massachusetts against the company. They sought class action status for themselves and FedEx Home Delivery owner-operators, charging they should have been classified as employees.

On July 15, FedEx Ground agreed to pay $3 million to Massachusetts to settle claims that the company misclassified drivers as independent contractors.

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