Appeals Court Backs Kansas Ruling That FedEx Ground Drivers Are Employees
The decision by the 7th Circuit Court of Appeals followed a month after FedEx agreed to settle another worker status, in which the company maintained that workers were independent contractors. In the California case, FedEx agreed to pay $228 million to more than 2,000 drivers. Last week, a federal judge in Massachusetts ruled that drivers at Xpressman, a courier service, were contractors rather than employees.
The Appellate Court’s decision in an appeal from FedEx said that the state’s Supreme Court “authoritatively decided” that drivers were employees under state law.
The Kansas case, like the California matter, extends back before 2000, to the status of drivers between 1998 and 2007.
“The [Kansas] decision applies to those contractors operating in Kansas from 1998 to 2007 under a model that no longer is in use,” said Meredith Heighington Miller, a FedEx Ground spokeswoman. "We fundamentally disagree with this ruling and are exploring our legal options.”
FedEx changed its approach to contractor status at the Ground unit in 2011, requiring that the company make contracts with Ground operators that treat drivers as employees.
In addition to upholding the Kansas Supreme Court, the 7th Circuit also said it was reversing a multidistrict litigation panel ruling in 2010 that favored FedEx and denied drivers’ claims that they were employees.
The so-called Craig case in Kansas, which was the lead case in the multidistrict litigation, was sent back to that court with instructions to consider the Kansas drivers as employees. That status could send the case to still another jurisdiction — the Kansas District Court — to determine damages, the 7th Circuit ruling said.
“We remain committed to protecting a business model that has consistently provided customers with outstanding service while enabling thousands of independent business owners, in Florida and across the country, to own their own business,” she said.
The Ground spokeswoman also noted that an 11th Circuit ruling in late May affirmed some of FedEx’s claims in another contractor case regarding Florida drivers.
“As with the 2008 finding by a Washington state jury that service providers for FedEx Ground are properly classified, we are confident that the same conclusion will be reached in this case,” she said.
