ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Thursday, August 28, 2014

FedEx Drivers Are Employees, Ninth Circuit Finds

"Fedexgroundtruck" by Coolcaesar at en.wikipedia - 

According to FedEx, the people who drive up to your house in FedEx trucks, wearing FedEx uniforms and delivering FedEx packages are not FedEx employees.  They are independent contractors.  In Alexander v. FedEx Ground Package System, Inc. , a Ninth Circuit panel applying California law unanimously held otherwise, reversing an earlier multi-district court decision and remanding for an entry of summary judgment in favor of plaintiffs on the question of their employment status.

A class of 2300 drivers brought claims against FedEx claiming entitlement to expenses and overtime under California law.  They also brought claims under the federal Family and Medical Leave Act.  Their entitlment to relief turns on their status as employees.  

The opinion is long and detailed, but it basically comes down to this.  The drivers sign an Operating Agreement (OA) which has language suggsting that the drivers enjoy the sort of independence ordinarily associated with independent contractors.  The Ninth Circuit found that, notwithstanding the OA, FedEx controls the terms and conditions of its drivers' work the way it would for an employee.  

Under California law, a person is an employee if the alleged employer has a right to control the purported employee's on-the-job conduct: “The principal test of an employment relationship is whether the person to whom service is rendered has the right to control the manner and means ofaccomplishing the result desired.”  In addition, the right to terminate at will and without cause is a strong indicator of an employment relationship.  The court lists a number of additional factors as well.  The court carefully examined the nature of the relationship and found that FedEx clearly exercised a right to control the conduct of its drivers.

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