CHICAGO (CN) - FedEx owes drivers damages for withheld expenses and lost income, the Seventh Circuit ruled, finding that the shipping giant "strays from reality" in trying to avert wage claims.
Though FedEx classified drivers who signed contracts between 1998 and 2007 as independent contractors, it forced them to buy their own uniforms and equipment, while also controlling the minute details of their appearance and behavior, with specific guidelines for hygiene and body odor.
Current and former drivers cited these factors in lobbing FedEx with dozens of class actions across the country.
The judge in South Bend, Ind., presiding over multidistrict litigation involving more than 70 cases ultimately granted FedEx summary judgment, however, and remanded the member cases for separate proceedings.
Though a three-judge panel initially affirmed that judgment, the federal appeals court declined to intervene on the merits of the lead case, Craig v. FedEx, a year later, saying the ruling turns on application of Kansas law.
It certified certain questions to the Sunflower State's high court, and those justices unanimously sided with the Kansas drivers in 2014, ruling that FedEx misclassified them as independent contractors.
Though FedEx urged the Seventh Circuit to ignore the Kansas Supreme Court's guidance, the panel reversed for the drivers Wednesday.
"FedEx's understanding of the Kansas Supreme Court's decision strays from reality," the unsigned decision states.
Though FedEx may disagree with the Kansas Supreme Court's legal conclusions, the Seventh Circuit noted that other courts to have considered FedEx's relationship with its drivers "applied different legal rules than applied under Kansas law."
Finding the application of Kansas law to FedEx's relationship with its drivers now "authoritatively decided," the Seventh Circuit reversed summary judgment for the company.
"The Craig case is remanded to the MDL court with instructions to enter judgment for the plaintiff drivers that they are employees of FedEx for purposes of the KWPA and for further proceedings consistent with this opinion, which ultimately may require a remand of the case to the Kansas district court for a determination of damages," the judges wrote, abbreviating multidistrict litigation and the Kansas Wage Payment Act.
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