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States consider suing FedEx Ground over driver policies

Thu, Oct 22nd 2009 12:00 am
New York, New Jersey and Montana plan to sue FedEx Ground Package System Inc. over what they say is misclassification of "more than 1,000" delivery drivers in those states as independent drivers, not employees.

The states filed their complaint under the letterhead of New York Attorney General Andrew Cuomo Tuesday. The letter was addressed to attorney William Conley, managing director of FedEx Ground's legal department.

The two-page letter was signed by New Jersey's labor commissioner, David Socolow, the New York Labor Bureau's deputy bureau chief, Patricia Kakalec, and Montana Assistant Attorney General Jennifer Anders.

The complaint laid out arguments as to why FedEx delivery drivers should be reclassified, including FedEx's control of their work schedules, their inability to bargain over the terms of their operating agreement and the way in which FedEx tightly monitors the delivery process, down to mandating uniforms and when drivers can drive their own FedEx truck.

The states claim that the misclassification has resulted in "serious injustice" to drivers in those states by not allowing them to not receive worker's compensation and not protecting them with anti-discrimination laws, labor-relations laws "and other important laws that protect our states' workers."

The misclassification also hurts the states in the collection of proper taxes and hurts other employers due to unfair competition, according to the letter.

The states have given FedEx until Oct. 27 to reply and show why they should not proceed with litigation.

FedEx spokesman Maury Lane said the company has been in discussions with the attorneys general of all three states "to address the questions that they may have regarding this issue."

"While we intend to continue with these discussions, we will vigorously defend the right of FedEx Ground independent contractors to own and operate their businesses, should the AGs pursue litigation," Lane said.

Earlier this year, a Pennsylvania appeals court ruled that FedEx Ground drivers are independent contractors and therefore not eligible to bargain with the union as company employees.

The U.S. Court of Appeals has also previously found that drivers met the description of independent contractors or small businesses, and not employees.

FedEx Ground, a division of Memphis-based FedEx Corp., is based in Moon Township, Pa.