FedEx Drivers — Employees or Independent Contractors?

Overview:  Are FedEx drivers independent contractors or employees, the latter with withholding and vacation and sick leave and overtime?  Does your answer change if you know all FedEx drivers sign contracts confirming their independent contractor status?   Read this weeks Law Review for the answer, the  federal court of appeals decision may surprise you.

We’re in a rut. Last week this column featured two federal cases looking into whether drivers for the ride‑hailing companies Lyft and Uber are employees or independent contractors. A potential nightmare ruling ahead for those hugely successful companies.

FedEx Drivers

Today we look at the same legal issue — only for FedEx drivers who, like Lyft and Uber drivers, sign contracts confirming their independent contractor status.

What’s the Difference?

As you students of the law know, employees are treated like most of us working stiffs, we get our weekly paychecks with withholding. We’re entitled to reimbursement of expenses, workers’ compensation if we’re injured, overtime pay, sick leave, vacation and the like. An independent contractor, like a painting contractor or consultant, is generally self‑insured and works for him or herself, and is not treated or paid as an employee.

Right‑to‑Control Test

California’s Right‑to‑Control Test requires courts to weigh a number of factors in determining whether a worker is an employee or an independent contractor, the most important test being whether the employer has the right to control the manner and means of accomplishing the result desired. In other words, does FedEx control the manner and means of how its drivers deliver packages?

Other lesser factors include whether the worker has his or her own company, how much skill is required, who owns the tools, is there a workplace, are there work hours, how is the worker paid and what kind of occupation is involved.

This is one of the hottest areas of civil law in the country right now with aggressive lawyers suing companies on behalf of workers treated as independent contractors claiming they are really employees.

If you are an employer hiring independent contractors, pay attention.

FedEx Class Action

Over 2,300 FedEx drivers sued in a class action claiming both FedEx Ground and FedEx Home and Delivery division’s drivers are employees, notwithstanding they all signed contracts reciting they are independent contractors. The Ninth Circuit Federal Court of Appeals looked at the facts.

According to the case, FedEx requires its drivers to provide their own vehicles (which surprised me). The vehicles are all painted a certain way and the drivers are uniformed and they must comply with personal‑appearance standards. Drivers must be “clean shaven, hair neat and trimmed, free of body odor.” That’s good to know, especially for the women drivers.

While FedEx does not mandate specific working hours, the company has a great deal of control over driver’s hours and how and when they deliver packages.

 Employees

The Court of Appeal seemingly had no problem ruling in favor of the drivers finding them to be true employees entitled to all the benefits of an employee. It will be interesting to see if FedEx appeals to the U.S. Supreme Court. I bet not.

Quacks Like a Duck

In a Concurring Opinion, Circuit Judge Trotter agreed with the two other judges with colorful language worth sharing.

“Abraham Lincoln reportedly asked, “If you call a dog’s tail a leg, how many legs does the dog have?” His answer was “Four. Calling a dog’s tail a leg does not make it a leg.””

Judge Trotter agreed FedEx drivers are employees: “An application of the looks like, walks like, swims like and quacks like a duck test.”

            Jim Porter is an attorney with Porter Simon licensed in California and Nevada, with offices in Truckee and Tahoe City, California, and Reno, Nevada. Jim’s practice areas include: real estate, development, construction, business, HOA’s, contracts, personal injury, mediation and other transactional matters. He may be reached at porter@portersimon.com or www.portersimon.com.  

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