FedEx Lawsuit: Drivers Misclassified as Independent Contractors
Last Updated on June 1, 2017
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At A Glance
- This Alert Affects:
- Anyone who drove for FedEx and was classified as an "independent contractor."
- What's Going On?
- Litigation involving FedEx has been going on since 1999, resulting in some hefty settlements. Not all drivers subject to the alleged misclassification, however, were compensated as part of this litigation.
Lawsuits Claim FedEx Misclassified Drivers, Required Them to Pay for Expenses
The lawsuits previously filed against FedEx alleged that the company misclassified its delivery drivers as “independent contractors” when they were really employees. The suits claimed that FedEx maintained “substantial control” over its drivers and therefore, they should have never been classified as contractors.
What’s the Problem with Misclassifying an Employee as an Independent Contractor?
The suits’ main sticking point was that the independent contractor classification allowed FedEx to require its drivers to pay for certain business expenses.
These included:
- The cost of purchasing or renting their vehicle
- Fuel, oil and tires
- The cost of purchasing and cleaning of uniforms
- The cost of marking their trucks with logos, numbers, insignias, etc.
- Vehicle maintenance
- Registration and insurance of the vehicle
- Workers’ compensation premiums
- Liability insurance premiums
Basically, a company can save on certain costs, including unemployment taxes, overtime wages and certain business expenses, by misclassifying employees as independent contractors. Unlike employees, independent contractors also aren’t entitled to pension, health, disability, or other benefits. You can read more about the difference between employees and independent contractors here.
How Did FedEx Allegedly Control Its Drivers’ Jobs?
The lawsuits against FedEx claimed the company controlled the way its drivers performed their jobs by requiring them to:
- Wear clothes only approved by FedEx that featured the company’s colors and logos
- Have the FedEx logo on their personal trucks
- Report to work at a certain time to have their vehicles loaded
- Pick up and deliver packages at certain times
- Have their routes changed by FedEx at any time
- Allow FedEx employees in their vehicles to comment about customer service
- Lease vehicles that meet FedEx’s specifications
- Work only for FedEx – and not any other delivery company
As a result, the lawsuits alleged that this level of control meant the drivers were actually employees and not independent contractors.
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