FedEx threatened by three State Attorneys General over employee violations
For years, FedEx Ground has enjoyed a competitive advantage and reaped huge profits by falsely treating its employees as if they were "independent contractors." Individual drivers are required to purchase their own trucks, for example, and denied all of the employment rights which have been guaranteed by state and federal law. The Attorneys General of New York, New Jersey and Montana accused the company of "blatantly misclassifying" its 13,000 drivers as "small business owners," and these AGs are not alone.
Last year, FedEx paid $26.8 million to settle a California claim after an appellate court ruled that 200 employees were falsely characterized as "small business owners." The Internal Revenue Service has fined FedEx Corporation $14 million dollars in penalties after an audit of FedEx's characterization of employees. Currently 30 states are investigating FedEx Ground, and there are 45 class action suits pending, charging the company with aggressive, illegal mistreatment of employees.
Next time you are wondering whether to use FedEx or a competitor, take into account how you want your money to be used: do you want it to support excess profits and to be spent on FedEx advertising of professional golf, or do you want your dollar to underwrite normal employee benefits in compliance with state and federal law? If you want your money going to the latter purpose, send your package with someone other than FedEx.