FedEx Lawsuit

Given all of the controversy that surround the delivery drivers for Fedex Ground, it’s easy to forget that Fedex Ground is merely one portion of the overall corporate giant that is Fedex Corp.  However, all of these problems that center on the classification of Fedex Ground drivers as independent contractors could affect the company’s bottom line soon, even though Fedex Corp. recently reported a positive last quarter, according to the Wall Street Journal.

“We believe U.S. [gross domestic product] will grow less than 3%” for the rest of FedEx’s fiscal year, which ends May 30, said FedEx Chief Financial Officer Alan B. Graf Jr. He said the company lowered its profit guidance “almost entirely based on freight market” and economic forecasts.

The reduced outlook overshadowed FedEx’s results for the first quarter ended Aug. 31, which rose 4% from a year earlier. At 4 p.m. in New York Stock Exchange composite trading, shares of FedEx fell $2.88 to $104.63.

Wall Street had hoped for a lift for sluggish freight-industry volumes from the annual holiday shipping surge. The peak shipping season traditionally begins in late summer and builds into the fall as retailers and other businesses load boats, planes, trains and trucks with products ahead of the holiday shopping crush.”

While no mention of the Fedex Ground legal problem is made here, it’s obvious that hundreds of millions of dollars being spent on one issue will harm the company’s overall results.  If you have been wrongfully classified by Fedex Ground, contact the Fedex overtime attorneys at Pulaski & Middleman to schedule an initial consultation. 

In a somewhat stunning turn of events and after years of heated denials and refusals to agree with courts, the NLRB and labor unions, Fedex Ground announced that it will be abandoning its current independent contractor model in California.  The announcement was published on CNN Money, and comes on the heels of several negative results for Fedex Ground in California.

“The FedEx Corporation could pay between $26 million to $33 million in severance costs alone for abandoning its illegal contractor model in California, a change announced Thursday by company chief executive Fred Smith.

Smith said FedEx is offering special incentives to encourage single-route contractors to transform their operations into multiple route businesses or sell their routes to others. Information obtained by the Teamsters from FedEx drivers puts the incentives at $25,000 to $33,000 per contractor to leave their jobs at FedEx.

There are 1,055 such contractors as of March 2007, according to court filings. FedEx Ground commonly puts its total contractor workforce nationwide at 14,000 to 15,000.”

This obviously affects the claims that could be made going forward, but not yours if you were wrongfully classified.  Basically, this announcement could be seen as a tacit admission by Fedex Ground, but to find out how it applies to you, contact the Fedex overtime attorneys at Pulaski & Middleman today to schedule a free initial consultation.

As one would expect, Fedex Ground did not react favorably to the recent California Court of Appeals decision that held that Fedex Ground drivers should have been classified as full time employees as opposed to independent contractors at Fedex.  The brief story appeared recently in the Pittsburgh Tribune-Review, and the reaction appears below:

“FedEx Ground said it disagrees with the ruling and is “evaluating its legal options.” Only 33 of the drivers in the suit still are working for the company.”

It’s not clear at this time what Fedex Ground’s options could possibly be.  The company has been taking a beating in nearly every arena in which this controversy has been adjudicated, and if you would like to gain an understanding of how your rights may be affected by this situation, you need to contact the Fedex overtime attorneys at Pulaski & Middleman today to schedule an initial consultation.

Welcome to Pulaski & Middleman, LLC’s Fedex overtime lawsuit blog.  Recent events have led to a potential rolling tide of claims by Fedex delivery drivers, past and former, against the corporate giant that is Fedex based on a legal technicality that may seem rather tame on the surface, but whose result could have far-reaching ramifications for everyone involved.  Basically, the controversy surrounds whether or not Fedex drivers should be classified as employees or as independent contractors.  This blog will be updated regularly, and will generally contain the following information:

The difference between an employee and an independent contractor as defined by the federal tax code;

1.      The tax and benefits ramifications of being classified as either;

2.      Relevant laws, rules and regulations that apply to this situation;

3.      News and updates regarding this burgeoning Fedex issue.

We invite you to check back often, as this relatively new issue is beginning to gain momentum in terms of media coverage, and every news story and ruling could potentially have a profound effect on any claim that you, as a current or former Fedex driver, may have.  In the meantime, if you seek the help of a Fedex overtime lawsuit attorney, contact the law firm of Pulaski & Middleman, LLC for a free initial consultation.

The crux of the issue between Fedex and its drivers is the classification of their drivers as independent contractors as opposed to employees.  There are several important real-world issues that result from this seemingly insignificant classification, and they are detailed below:

1. Employees have taxes withheld from their paychecks, while independent contractors do not.
2. This lack of withholding generally greatly increases an independent contractor’s tax liability at the end of the year.
3. Independent contractors are responsible for their own benefits, such as health insurance and retirement plans. 
4. Independent contractors are not paid for vacation time.
5. Independent contractors are generally not protected by employment law statutes.

These are just five main differences.  If you would like to know more about your rights as they relate to the Fedex issue, contact a Fedex overtime attorney at Pulaski & Middleman to schedule a free initial consultation.