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.
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.
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.