The logistics industry could be turned upside down after a recent 9th U.S. Circuit Court of Appeals ruling. According to the panel of three judges, FedEx drivers in California and Oregon are employees — not independent contractors. The ruling affects 2,300 drivers who have been subjected to misclassification by the global delivery service.
While FedEx has already declared that it will ask the Circuit Court for a full panel review, this ruling has the potential to cost FedEx millions of dollars in benefits and back wages. Should the ruling stand, drivers would be able to claim those benefits and back wages.
Currently, the drivers in the lawsuit are not entitled to Family Leave and Medical time off nor are they protected by California and Oregon’s minimum wage laws. In addition, overtime pay is not guaranteed. FedEx drivers classified as independent contractors also must purchase their uniforms, pay for maintenance on their trucks and rent the scanners used for tracking packages.
The current classification model used by FedEx was discredited by the court, who ruled that the company has the “broad right to control the manner in which its drivers perform their work.” This is what led the judges to rule that the classification was incorrect.
For several years, workers at FedEx and other similar delivery services have challenged the model used by the industry to classify them as independent contractors. Up until this latest ruling, the courts had always ruled against the workers.
If you are working as an independent contractor and feel that you are also a victim of misclassification, you do have legal rights. One of those rights is pursue a lawsuit against your employer for a number of claims, including failure to pay overtime or minimum wage.
Source: Fortune, “Wage Watch: Court ruling could upen FedEx’s biz model” Claire Zillman, Aug. 29, 2014