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FedEx Ground Class Action Lawsuit
On Monday, July 26, 2003, Judge Howard Schwab of Los Angeles Superior Court, Department F48, rendered his decision in the first phase of a bifurcated trial, after hearing nine weeks of testimony between April 16 and June 30, 2003, finding that the Plaintiffs/Class representatives Anthony Estrada and Jeffrey Morgan and those in the certified statewide class of several hundred single-route pickup and delivery drivers for Fed Ex Ground were and are employees rather than independent contractors, as FedEx Ground claims.
He also found, contrary to FedEx Grounds claim, that the drivers have not been indemnified for their work-related expenses. The court also found that the one named plaintiff who had two routes was an independent contractor. A copy of the courts decision can be found in our documents area.
At issue in the case, entitled Anthony Estrada v. FedEx Ground, Los Angeles Superior Court # BC 210130 is whether FedEx Ground violated California Labor Code Section 2802 and/or the California Unfair Business Practices Act by failing and refusing to reimburse the drivers for their work-related expenses, including the costs of their trucks, fuel, maintenance, scanners, uniforms, liability and workers compensation-like insurance, registration and license, and similar expenses required in order to work as pickup and delivery drivers for FedEx Ground. To be entitled to such reimbursement, the drivers were required by the Court to prove that they were employees under California law rather than independent contractors, as the company claimed.
The trial court issued a lengthy statement of decision outlining the reasons for the ruling, including the fact that the company exercised pervasive control, indeed close to absolute actual control (p.4) over the drivers working conditions under the sixty-six page long form-contract that each driver had to sign. The court said that the Company had created an environment, where a terminal manager can blasphemously refer to himself as the Almighty and wield power accordingly. (P.10) The court also found that the drivers were fully integrated into the FedEx Ground delivery system - - essential to FEGs core business operation (p. 16) - - where they worked for many years for FedEx and FedEx alone. He also found that, contrary to what FedEx claimed at trial, the single-route drivers had a job, not a business and had no opportunity for profit or loss.
Plaintiff and class representative Anthony Estrada was thrilled with the Courts decision and explained When I went to work for the Company, I had to purchase a $40,000 truck and have it specially painted with the Companys logo and advertising. I had to wear a Company-uniform, use the Companys scanner and paperwork and was told what to do by the Companys managers every day. Despite all that, the Company claimed we were independent contractors and required us to pay for the companys truck, fuel, maintenance, insurance and other expenses. This was a scam that cost each driver thousands and thousands of dollars each year and every dollar we drivers paid was a dollar the Company saved by not paying its own expenses. The Court has now decided what we all knew in our hearts - - we were always employees, but we were forced to pay the companys expenses anyway.
Class counsel Lynn Rossman Faris said, The Courts landmark decision finally rights a long-standing wrong - - by mis-classifying their delivery drivers, FedEx Ground has forced its delivery drivers to pay the companys business expenses. While only directly applicable to Californias single-route pickup and delivery drivers, the decision will have major impact around the country, where other class action cases are pending or contemplated. FedEx Ground is a multi-billion dollar company which has between 5,000 and 6,000 single-route pickup and delivery drivers it has mis-classified as independent contractors when they are clearly employees. FedEx Grounds sister company, FedEx Express has thousands of drivers who perform the same duties and are provided with a truck, fuel, insurance, uniforms and the like by the Company. There is simply no excuse for the unfair treatment of the FedEx Ground drivers who look like employees, act like employees and are treated by FedEx Ground like employees but are made to pay for the companys business expenses. This decision should serve as a warning to other major employers who use sham independent contractor arrangements for their own financial benefit - - calling them independent contractors, but treating them as employees to avoid paying their costs of doing business.
In 1998, FedEx purchased RPS, Inc., a company based in Pittsburg, Pennsylvania, which opened its doors in 1985 in an effort to capture a share of the small package ground delivery market, classifying its pick-up and delivery drivers as independent contractors to avoid purchase of thousands of expensive trucks. When FedEx acquired RPS, Inc., it continued classifying the pick-up and delivery drivers as independent contractors on a national basis, even though FedEx Express, Inc., based in Memphis, Tennessee, has always classified its couriers as employees. In 2000, FedEx re-branded RPS, Inc. and since then has marketed its ground delivery service as FedEx Ground. FedEx Ground packages are transported between ground based hubs by tractor trailer, while FedEx Express transports packages by air. Otherwise, delivery functions of the FedEx Ground drivers and the FedEx Express couriers are the same.
The case will continue on to Phase II, when the court must still decide
various pending issues, including what damages and/or restitution the
class is entitled to and whether to issue injunctive and declaratory
relief requested by the Plaintiffs.
NLRB Decision - Ground Contractor Status
FEDEX GROUND PACKAGE SYSTEM, INC., Employer, and Case 22-RC-12508 LOCAL
177, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, AFL-CIO, Petitioner.
Gary T. Kendellen - Director, NLRB Region 22:
that the P & D drivers and swing drivers are employees within the
meaning of Section 2(3) of the Act; that P & D Driver James Profanato
and Linehaul Driver Anthony Addison, the two absentee drivers
who have hired driver-employees to drive their routes, should be excluded
from the unit;
that the remaining Linehaul driver, George Dupree, is an employee within
the meaning of the Act; and that there is sufficient evidence that Dupree
shares a community of interest with the P & D drivers to accept
both parties positions that Linehaul drivers should be combined
with P & D drivers in one unit.
I also find that the temporary drivers, whom the Employer states work
for a temporary agency, are jointly employed by the Employer; since
they are employed for periods of indefinite durationhave an uncertain
tenure and share a community of interests with the P & D and Linehaul
drivers, and are employees of the Employer; accordingly, I shall
exclude include them infrom the unit.
I further find that the supplemental drivers, who are not employed
by the Employer, should be excluded from the unit. More...
Source: National Labor Relations Board (NLRB)
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FedEx, Kinko's and FedEx Kinko's are registered trademarks ® of FedEx Corporation.
The use of registered trademarks within the domain or on this site is made for a legitimate noncommercial fair use, to wit, for the publication of information that reasonably qualifies as free speech in order to encourage public discussion, information and debate, and without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue. Comments & submissions are property of the author. All other material © 2004 by FedExaminer
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