FedEx Settles Suit by Drivers for $227 Million

OAKLAND, Calif. (CN) - FedEx reached a $227 million settlement in a labor dispute with more than 2,000 of its California delivery drivers, who claimed that the company misclassified them as independent contractors rather than employees.

The settlement comes nearly a year after the Ninth Circuit revived three separate class actions on behalf of 2,300 California-based drivers for FedEx Ground and FedEx Home Delivery and 363 in Oregon that were consolidated for multidistrict litigation with similar complaints from 40 states.

Finding that FedEx misclassified its drivers as independent contractors, the court noted that the delivery giant still controlled minute details of how its emloyees appeared and behaved, even though it had them purchase company-approved trucks, uniforms and other equipment.

Publicists for the drivers' attorneys at Leonard Carder noted that in some cases

Drivers who took sick time or vacation days also sometimes had to hire and pay the wages of individuals covering for them, according to the firm's statement.

The drivers also received no employment benefits like health care, workers' compensation and retirement, and their employment was "subject to the whims of FedEx management and FedEx Ground's decisions on staffing and routes left the employee drivers stuck with expensive long-term truck leases on FedEx branded trucks."

Leonard Carder attorney Beth Ross touted the deal as "one of the largest employment law settlements in recent memory."

It "sends a powerful a message to employers in California and elsewhere that the cost of independent contractor misclassification can be financially punishing, if not catastrophic, to a business," Ross said in the stament.

The firm's publicists say the $227 million fund is "comparable to what the United States Department of Labor has collected in back wages annually through nationwide enforcement of wage and hour law during at least the last seven years."

FedEx could not be reached for comment.

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