A federal judge's ruling for FedEx in a series of lawsuits claiming the company misclassified package drivers as independent contractors strikes a serious blow to attempts to have the workers labeled as company employees.
U.S. District Judge Robert Miller of Indiana late Tuesday dismissed 20 of 28 class-action cases from around the country against FedEx, giving strong legal backing to FedEx Ground and its business model built on the use of contractors.
This court held there was no reasonable inference that FedEx retained the right to control the "methods and means of the drivers' work on a class-wide basis."
The decision comes as organized labor and several state governments are placing the widespread use of independent contractors under greater scrutiny, with labor groups arguing many companies are avoiding work rules and taxes by using contractors who do all the work of full employees. Independent contractors are an entrenched part of many transportation operations, and many trucking companies use owner-operators who work exclusively for their companies.
The use of independent contractors has been a foundation of the FedEx Ground business model since the company was founded as RPS years ago to compete with UPS and its Teamsters-organized work force.
"We are very pleased with today's significant rulings from the federal District Court in Indiana in favor of FedEx Ground related to the independent contractor business model," FedEx spokesman Maury Lane said.
Judge Miller issued split rulings on several of the eight remaining cases, dismissing some claims within several of the suits while allowing others to move forward.
His 182-page ruling pulled together suits in several states under one legal umbrella and included decisions on cases drivers have filed across the country. He wrote in several of the cases that although drivers were dedicated solely to FedEx business, the company did not exert the kind of control over their employment that would make them FedEx employees.
"This court held that the controls reserved to FedEx were results-oriented," Judge Miller wrote in one case.
"FedEx provides work to and pays contractor-drivers to provide the specific result of timely and safely delivered packages to FedEx customers. … The totality of the circumstances and review of all the relevant facts and factors led to this results-oriented conclusion. "But," he wrote, "FedEx is contractually unable to discharge a driver at a whim and on the spot the way an employee in an at-will employment relationship could be discharged."
In a separate case in Kansas, he wrote, drivers "have the ability to hire helpers and replacement drivers; they are responsible for acquiring a vehicle and can use the vehicle for other commercial purposes; they can sell their routes to other qualified drivers, and FedEx doesn't have the right to terminate contracts at will."