San Francisco, California (06/16/2015) – According to Forbes, FedEx has settled a class-action suit with their FedEx Ground and FedEx Home Delivery drivers in California, who sued FedEx for classifying them as independent contractors instead of employees. The settlement was announced by FedEx in an 8-K regulatory filing to the Securities and Exchange Commission (“SEC”), which was filed 06/12/15 for the period ending 06/08/15. The information regarding the settlement can be found in Section 8. Other Events as Item 8.1. Other Events, as follows:
On June 12, 2015, FedEx announced that FedEx Ground has reached an agreement in principle with the plaintiffs in the independent contractor litigation that is pending in the United States District Court for the Northern District of California to settle the matter for $228 million. The settlement is subject to court approval. As a consequence, a charge of $197 million ($133 million, net of tax, or $0.47 per diluted share for the fourth quarter and $0.46 per diluted share for fiscal 2015) was recorded in the fourth quarter of fiscal 2015 to increase the reserve for this matter to the amount of the settlement.
FedEx’s decision to settle was likely influenced by the Ninth Circuit Court’s ruling that agreed with the plaintiffs that the drivers were employees, not independent contractors (Alexander, et al. v. FedEx Ground Package System, Inc., et al., 765 F.3d 981 (9th Cir. 2014)) as per California Wage and Hour Laws.
The Opinion was argued and submitted March 6, 2014, and filed August 27, 2014. The Opinion, written by Judge W. Fletcher, with Concurrence by Judge Trott, is as follows:
W. FLETCHER, Circuit Judge:
As a central part of its business, FedEx Ground Package System, Inc. (“FedEx”), contracts with drivers to deliver packages to its customers. The drivers must wear FedEx uniforms, drive FedEx-approved vehicles, and groom themselves according to FedEx’s appearance standards. FedEx tells its drivers what packages to deliver, on what days, and at what times. Although drivers may operate multiple delivery routes and hire third parties to help perform their work, they may do so only with FedEx’s consent.
FedEx contends its drivers are independent contractors under California law. Plaintiffs, a class of FedEx drivers in California, contend they are employees. We agree with plaintiffs.
Affected are 2,300 California employees, who were employed from 2000 to 2007. The financial terms will cover employee plaintiff claims for expenses, back compensation and legal fees dating to 2000. FedEx has several similar employment lawsuits in other states around the country, but while this case may be cited and its outcome may affect their cases, this case does not have any jurisdiction over lawsuits brought by FedEx contractors in states other than California.