Justice for FedEx G/HD Drivers Moved Closer in 2007

The cause of the FedEx Ground and Home Delivery drivers is undeniably just: the offer of independence was made under false pretenses and FedEx misled the drivers into a relationship where they were illegally controlled like employees.  Many many drivers fell victim to a bait and switch.

The Teamsters want to see the drivers properly classified and FedEx adhere to the law like other employers.  Drivers who want to join the Teamsters must first win the legal argument at the NLRB that they are illegally labeled 'contractors' but should have the rights of employees like the right to unionize.  This is not something created by the Teamsters. And as the NLRB has ruled in the drivers' favor, this position is also not a real debate any more.

The core issue is that drivers want to be truly independent or they want the rights and protections that all employees are entitled to and and have earned.  Since FedEx has proved repeatedly they will not grant drivers more than token independence, then the just fight is for drivers to take back their rights.  Reclaim their rights through the courts, through the NLRB, through the state and federal tax procedures.  By any legal means necessary.

So to the drivers who are fighting and winning, the Teamsters salute you.  Your fight in 2007 made great strides closer to a just outcome.

The Home Delivery drivers in Wilmington, MA and Hartford, CT secured their rights to join the Teamsters at the NLRB.

The drivers in the national class action lawsuit got the first of a series of class certification orders from a federal judge. 

The drivers in the California class action lawsuit won their case.

The drivers in Massachusetts who filed complaints with the Attorney General caused an investigation, citations and orders to be treated as employees.

The drivers who filed SS-8 Forms with the IRS got the feds to audit FedEx and the audit found that FedEx was illegally not paying proper taxes.

As individual headlines, these are each big news.  Taken together, they show the world that FedEx isn't getting away with the Big Lie.

The lawyers are watching.   The accountants are watching.   The analysts are watching.   The hr managers are watching.   The competition is watching.   The activist community is watching.   Wall Street is watching.

The issue of misclassification and the fight for justice by Ground and Home Delivery drivers was once something FedEx dismissed as coming from a small group of malcontents and failures. 

But the drivers have done what they felt was right and fair and the drivers are succeeding.  Who are the failures now? 

-- December 28

Comm Appeal WRONG as FedEx Wins Battle But Fight Continues

There is a disturbing pattern of the news coverage about FedEx in Memphis' paper recently.  Since a very solid summary piece on the FedEx Ground contractor scam in October, the only news appearing in the Commercial Appeal seems to be 'good news' from FedEx's perspective. 

Such is the case with the badly headlined story "FedEx Wins Labor Word War" that could lead a reader to the wrong conclusion.

It is true that the language which would remove the non-FAA certified workers at FedEx Express out from under the Railway Labor Act and under the National Labor Relations Act was floated during the discussion of the omnibus spending bill.  And it is true that the language in the end didn't get inserted into that spending package.

But so what?

The original language introduced (properly) as part of the House version of Federal Aviation Administration re-authorization act still is there.  And - as noted in the body of the Commercial Appeal article - "(House Transportation Committee Chairman Oberstar's spokesman) also pointed out that the National Labor Relations Act language remains in the House-passed FAA reauthorization bill. The Senate bill reauthorizing the FAA does not contain the provision and will be considered early next year."  CongressDaily did a better job on this although also deep in the body of its analysis.

The FAA bill will be up again before the Senate next year. As anyone who flies knows, the air traffic system is breaking down .  And it isn't going to be fixed by Santa's elves.  Nor will fixing it be held up by one man or one company.

So FedEx Express employees shouldn't get spooked by headlines.  FredEx might have won a battle but the fight continues. 

-- December 20

Law.com Contributors Re-visit Misclassification

A pair of lawyers published an article at Law.com titled, "Misclassification of Independent Contractors and Employees Can Be Expensive."   And they don't mean in an unfair competitive advantage way.  Of course, FedEx Ground was an obvious object of the analysis.

While employers can effect great savings through classifying workers as independent contractors, employers who improperly classify employees as independent contractors face even greater liabilities in litigation brought by private parties or federal or state governmental entities, including the payment of lost wages and benefits, taxes, interest, penalties and attorney fees.

FedEx Ground Package System Inc. has been battling claims in multiple jurisdictions over its classification of drivers as independent contractors. On Oct. 15, 2007, Chief Judge Robert L. Miller of the Northern District of Indiana certified a nationwide class of more than 20,000 current and former drivers who brought suit under the Employee Retirement Income Security Act seeking benefits under several FedEx plans for which they were not eligible because they were deemed independent contractors.

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Legal battles like Estrada and Narayan over the misclassification of workers have lead to executive and legislative responses across the country, including Indiana, Minnesota, New Hampshire, New Jersey, New York and, recently, Illinois. In Illinois, the General Assembly has passed the Employee Classification Act, effective Jan. 1, 2008, which is applicable to construction contractors. The act provides that individuals performing construction services for a contractor will be deemed to be an employee unless the contractor can show that the individual meets several stringent tests. The act provides for both civil and criminal penalties and provides for a private right of action.

FedEx's legal troubles in Estrada should remind employers that actions speak louder than words. Simply contracting with a worker as an independent contractor is insufficient and is not dispositive of the worker's status. Courts will ignore the contract label if it is at odds with the actual relationship. The costs of erroneous classifications are great. Employers must carefully analyze the factual reality of their relationship with workers before classifying workers as independent contractors as opposed to employees.

FedEx is in danger of becoming a business school case study in misclassification and mismanaging this fundamental legal issue.

-- December 14