PORTLAND — Drivers for FedEx Ground Package System Inc. in California and Oregon recently won appeals in their respective class action overtime pay lawsuits. A three judge panel for the Ninth Circuit Court of Appeals reversed the lower court’s summary judgment ruling that dismissed the drivers’ lawsuits. The drivers claim FedEx misclassified them as independent contractors and denied proper overtime wages, meal breaks, and other employee benefits.
The Claim
In their lawsuit, the drivers, who worked for the company between 2000 and 2007, claim their operating agreements with FedEx improperly classified them as independent contractors. The agreements specified that FedEx had the right to dictate certain aspects of the a driver’s work, such as when to begin, end, or take a break from work. The Appeals Court agreed, finding that FedEx did in fact exercise rights as an employer to control the drivers.
The court used the “right to control” test in both cases. Generally, employers lack the right to control or dictate the majority of what is done by an independent contractor. The court determined that, despite the fact that drivers could set their own schedule or hire additional drivers to help with their routes, FedEx structured drivers’ workload so that there was little leeway on a driver’s schedule, and that FedEx was required to consent to any third-party hiring. Additionally, drivers were required to conform to FedEx dress and appearance standards, to deliver packages when and where FedEx instructed, and to drive FedEx approved vehicles. All of these requirements gave a strong appearance that FedEx controlled virtually every aspect of a driver’s employment.
Path Through the Courts
Both lawsuits were part of a multi-district litigation (MDL), meaning the courts combined many similar lawsuits against FedEx from across the country in order to more easily manage them. Originally, the MDL trial court in Indiana found the drivers in California and Oregon were not employees. The Court of Appeals reversed that ruling and remanded with instructions to grant summary judgment for the plaintiffs. FedEx is requesting an en banc review before the lower courts readdress the claims, meaning the full Ninth Circuit Court of Appeals would review the three judge panel ruling.
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