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FedEx Settles Driver Misclassification Lawsuit for $240 Million

MEMPHIS — In a major victory for tens of thousands of former and current FedEx drivers, the Memphis-based parcel service recently announced its intention to settle the unpaid overtime wage lawsuit dogging the company for the past several years.

The pending settlement would finally compensate drivers misclassified as independent contractors for the hours they worked over state and federal thresholds for time and a half pay.

The deal would settle claims with approximately 12,000 across 20 states for a sum of $240 million dollars, with some claimants eligible to receive tens of thousands of dollars in unpaid overtime compensation.

The drivers claimed that although FedEx hired them as contract workers they were in fact employees since they were required to use FedEx branded trucks and wear company uniforms.

IRS Rules for Independent Contractors

Federal laws hold workers classified as independent contractors must meet certain criteria to be exempt from overtime and other federally mandated benefits. Criteria to be classified as an independent contractor under federal law includes:

  • Right of termination
  • Control over discharge
  • Availability to the public
  • Investment of facilities
  • Provision of tools and materials
  • Sequence of work
  • Need for on-site services
  • Demands for full time work

These factors are part of the Internal Revenue Service’s 20 Rule Test. Workers classified as independent contractors are expected to meet these and many more qualifications to be exempt from overtime pay.

FedEx settled a similar lawsuit in California in July 2015 with a smaller group of 2,300 truck drivers for $226 million under that state’s overtime compensation laws. This 2016 unpaid overtime lawsuit against FedEx was filed under federal overtime pay laws.

Depending on state laws, plaintiffs considering filing overtime pay lawsuits may decide to proceed under those more robust laws as opposed to federal ones if they may be afforded better compensation. Speaking to a qualified overtime pay lawsuit can help individuals in those types of situations decide which type of overtime lawsuit, state or federal, would be more favorable to helping them recover all the compensation they are duly owed.

Independent Contractor Overtime Lawsuits

Call (855) 754-2795 or complete the Free Unpaid Overtime Case Review form on the top right of this page if you feel that your wage rights are being violated under the FLSA. Our top-rated team of unpaid wage lawyers will evaluate your situation to determine your best course of action to help you seek justice.

Our office will also determine if it is in your best interest to file a lawsuit against your employer. Because strict time limitations apply for filing these types of claims, we advise you contact our experienced unpaid overtime wage attorneys at your earliest convenience and preserve your legal rights.

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