Today, the Ninth Circuit Court of Appeal ruled that a class of 2,300 individuals working for FedEx Ground was misclassified as independent contractors instead of employees. As a result, FedEx may owe its workforce of drivers hundreds of millions of dollars for illegally shifting to them the costs of such things as the FedEx branded trucks, FedEx branded uniforms, and FedEx scanners, as well as missed meal and rest period pay, overtime compensation, and penalties. The case, known as Alexander v. FedEx Ground, covers employees in California from 2000 – 2007. The ruling can be found on the Leonard Carder website at www.leonardcarder.com.
Judge Fletcher’s majority opinion was very clear on the question of whether these workers are employees or independent contractors, stating “We hold that plaintiffs are employees as a matter of law under California’s right-to-control test.”
The court’s decision is the most recent in a series of cases that have methodically proven that FedEx Ground’s independent contractor model is built on the legal fiction that its drivers are in business for themselves. The Ninth Circuit decisively rejected that claim. The court’s finding in Alexander that drivers in California are covered by California’s workplace protection statutes not only impacts one of FedEx Ground’s largest workforces but could influence the outcome in over two dozen cases nationwide in which FedEx Ground drivers are challenging the legality of their independent contractor classification. Millions of packages are delivered every day across the state under the control, direction, and supervision of FedEx Ground. In addition, many trucking companies have been operating under a similar model in which they classify their drivers as independent contractors.
“FedEx Ground built its business on the backs of individuals it labelled as independent contractors, promising them the entrepreneurial American Dream,” said Leonard Carder Attorney Beth A. Ross who is a national leader on cases covering the exploitation of workers by mischaracterizing them as independent contractors. “However, as Judge Trott said in his concurring opinion, not all that glitters is gold.”
FedEx now requires its so-called contractors in California to hire a secondary workforce of FedEx drivers, who do the same work as the plaintiffs under the same contract. The Alexander decision calls into question FedEx’s strategy of making plaintiffs the middle men between the secondary workforce of drivers and FedEx.
“We have heard of many instances where the secondary drivers are earning such low wages that they have to rely on public assistance to make ends meet,” said Ross.
Background on the everyday experience for FedEx Ground drivers includes:
The drivers’ attorney Beth Ross added, “Nationally, thousands of FedEx Ground drivers must pay for the privilege of working for FedEx 55 hours a week, 52 weeks a year. 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.”
Among the noteworthy elements to emerge from the litigation, FedEx Ground’s practices take advantage of workers and are anti-competitive. FedEx Ground’s so-called “contractors” do the same work as UPS and U.S. Postal Service drivers for substantially less pay and without benefits. This plays out in two distinct ways.
FedEx Ground saves money and harms drivers and the public by avoiding employment taxes and workers’ compensation insurance, and complying with all other workplace protections.
Ross added, “This ruling will have seismic impact on this industry and the lives of FedEx Ground drivers in California.”
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