Judge Rules for FedEx in Worker Classification Suits

December 15, 2010 (PLANSPONSOR.com) – A federal judge has found that FedEx drivers in a nationwide series of lawsuits claiming the company treats them as employees and owes them full benefits are independent contractors.

Bloomberg reports that U.S. District Judge Robert Miller threw out claims of drivers in 20 class-action cases in California, New York, New Jersey and other states alleging the company misclassified their employment status and owed them back pay, overtime and other damages. Miller’s ruling addresses whether drivers showed they were misclassified under each states’ laws. In New York, for instance, whether an employment relationship exists turns on the degree of control the purported employer has over workers.   

“FedEx doesn’t have the right to control the drivers’ means and methods of how they go about their work,” Miller said in the decision, according to Bloomberg. “FedEx’s results oriented controls don’t result in employee status.”   

Miller previously threw out the drivers’ Employee Retirement Income Security Act (ERISA) claims for failure to exhaust administrative remedies (see Judge Dismisses FedEx Drivers’ ERISA Claims). The drivers argued it would have been futile to bring their claims before FedEx or FedEx’s designee when FedEx has consistently taken the position that they aren’t entitled to any plan.   

In December 2007, FedEx announced that the Internal Revenue Service tentatively concluded that the drivers were misclassified as independent contractors.  

The case is In re FedEx Ground Package System Inc. Employment Practices Litigation, 3:05-md-00527.