FedEx Lawsuit

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.