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Another Fed Ex Ruling Finds Drivers to be Independent Contractors, Not Employees

December 29, 2010

In a recent blog, our Anaheim, California employment and labor lawyers discussed a September employee misclassification ruling by a U.S. District Court Judge in Indiana who found FedEx ground drivers to be independent contractors and not employees under Kansas law. Judge Robert L. Miller's ruling reportedly shocked drivers, as it was in direct conflict with a 2007 California appellate decision.

FedEx drivers across the country have long been accusing the shipping company of employee misclassification, for being classified as independent contractors instead of employees which they allege violates their wage and hour rights, and the right to full benefits.

According Bloomberg, earlier this month, Judge Miller again sided mostly with FedEx in the multi-district class-action lawsuit, ruling that drivers should be classified as independent contractors and not employees--which would save the shipping company a potential rise in operating costs as well as overtime and back wage damages. These cases are reportedly part of a multidistrict litigation, where lawsuits filed in courts across the country are allowed to be consolidated in front of a single judge, in this case Judge Miller, for pretrial hearings. Miller's rulings reportedly address whether FedEx drivers presented that they were clearly misclassified under each individual state's laws.

The lawsuits filed by drivers were reportedly consolidated into a single class-action case in Indiana. Earlier this month, Judge Miller threw out twenty of the twenty-eight remaining class-action cases in California, New Jersey, New York and other states who allege that FedEx misclassified their employment status and owed them overtime, back pay and other damages. The court reportedly ruled against FedEx in three cases, while the company claimed a partial victory in some of the remaining cases.

According to some business analysts, FedEx could have faced a multi-billion dollar expense if the company was forced by the courts to reclassify drivers from independent contractors to employees, which would have taken away what is seen as a competitive advantage that FedEx has over its rival shipping company, United Parcel Service, Inc., whose drivers are represented by the Teamsters Union.

The use of independent contractors by FedEx has long been a source of complaints and legal action by people who claim that FedEx saves money by denying employee benefits to drivers. The outcome of the lawsuits will reportedly determine whether FedEx could be forced to cover operating expense cost and pension and health-care benefits.

In cities throughout Orange County, California and Southern California, contact Howard Law, PC today.

Judge's FedEx Ruling Won't Affect State Settlement, Telegram.com, December 16, 2010

FedEx Wins 'Significant' Court Ruling Over Driver Status, Fox Business, December 14, 2010

FedEx Wins Ruling That Contract Drivers Seeking Benefits Aren't Employees, Bloomberg, December 14, 2010

Class-action Suit Ruling Favors FedEx, ETrucker.com, December 14, 2010

Related Web Resources:

U.S. Department of Labor: Wage and Hour Division (WHD), Fair Labor Standards Act (FLSA)

Department of Labor (DOL): Wage and Hour Division (WHD)