August 27, 2014 10:27am
• Says they are employees, not independent contractors
• “Our decision substantially unravels FedEx’s business model”
“Although our decision substantially unravels FedEx’s business model, FedEx was not entitled to ‘write around’ the principles and mandates of California Labor Law,” the three-judge appellate panel says.
It issue was whether some 2,700 drivers for FedEx Ground and FedEx Home Delivery were employees – which the drivers claimed in their lawsuit – or independent contractors, running their own little businesses.
The court says because FedEx controlled so much of the drivers’ actions, they are employees.
“The drivers must wear FedEx uniforms, drive FedEx-approved vehicles, and groom themselves according to FedEx’s appearance standards. FedEx tells its drivers what packages to deliver, on what days, and at what times. Although drivers may operate multiple delivery routes and hire third parties to help perform their work, they may do so only with FedEx’s consent,” the court decision notes.
FedEx begs to differ.
“The model that the court reviewed is no longer in use,” the company says. “Since 2011, FedEx Ground has only contracted with incorporated businesses, which treat their drivers as their employees. FedEx Ground will seek review of these decisions, including review by the entire Ninth Circuit.”
The company says it contracts with more than 550 businesses that provide pickup and delivery service in California. “Those businesses averaged nearly $500,000 in revenue last year, with nearly 50 of them topping $1 million or more in earnings,” it says.