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March 13, 2017 1:45 AM, EDT
Appeals Court Rules FedEx Drivers in Conn. Are Independent Contractors, Not Employees
John Taggart/Bloomberg News

This story appears in the March 13 print edition of Transport Topics.

An appeals court has ruled that FedEx Ground Package System drivers working out of a terminal in Hartford, Connecticut, are independent contractors and not employees of the package carrier.

In a decision earlier this month, the U.S. Court of Appeals for the District of Columbia Circuit vacated a decision by the National Labor Relations Board that the FedEx drivers in Hartford were “statutorily protected employees.”

But the appeals court referenced an earlier ruling that FedEx drivers working out of Wilmington, Massachusetts, are independent contractors as defined in the National Labor Relations Act.

“Both cannot be right,” the D.C. appeals court said. “Having already answered this same legal question involving the same parties and functionally the same factual record in FedEx I, we give the same answer here. The Hartford single-route FedEx drivers are independent contractors to whom the National Labor Relations Act’s protections for collective action do not apply.”

The appeals court said that the jurisdiction of the NLRB extends only to the relationship between an employer and its employees but does not encompass the relationship between a company and its independent contractors.

The court said the NLRB must provide a “nonexhaustive” list of 10 factors, ranging from the extent of control the employer has over the driver to whether the worker is paid by the time or by the job, to determine contractor or employee status.

The NLRB argued that the “pervasive control” FedEx exerted over the “essential details” of its drivers day-to-day work and the “core nature” of the drivers’ work to FedEx’s business operations made the drivers employees.

“This case is the poster child for our law-of-the-circuit doctrine, which ensures stability, consistency and evenhandedness in circuit law,” the appeals court said.

Richard Pianka, deputy general counsel for American Trucking Associations, said that because courts are bound by their own prior decisions, they can’t change their minds when the facts are indistinguishable from earlier decisions, as in the Connecticut case.

“So the NLRB was having to deal with a very clear, controlling precedent that D.C. circuit was bound to follow,” he said.

ATA filed a Friend of the Court brief in the case in support of FedEx.

“The owner-operator model is an important part of the trucking industry, and always has been,” Pianka said. “It allows carriers to deal with fluctuations in demand, and it allows enterprising drivers to be their own small businesses and start their businesses with a moderately small investment in their equipment,” he added.