Developments in FedEx litigation over mis-classification of employees
There were two developments in the past week involving FedEx's controversial practice of calling it's drivers "independent contractors" and forcing them to pay their own unemployment insurance, Social Security, and other legal obligations of the employer. In Montana, FedEx paid $2.3 million dollars to settle the State's claims that FedEx Ground owed unemployment insurance for drivers. Only $100,000.00 of the settlement will go to drivers who paid their own unemployment insurance taxes, however, and FedEx is not required to classify the drivers and pay unemployment for them. The State Attorney General acknowledged that perhaps the only long-term achievement of the lawsuit was the loosening of control exercised by FedEx over the day-to-day activities of the drivers.
Meanwhile, New York's Attorney General filed suit this week to challenge the same "elaborately structured scheme." In Orwellian terms, FedEx Corp. described the attack on its abuse of employees as a "real assault on the American working class," as though its abusive practices of forcing employees to pay their own unemployment and work comp expenses, and denying them state labor law protections, were somehow in the employees' interest.
There are more than 30 class-action suits pending involving FedEx's mis-classification of "owner-drivers," and its denial of workers compensation, unemployment and other labor law obligations of the employer. UPS treats the same drivers honestly and meets its obligations to pay taxes and insurance as required under various state laws.