FedEx Ground Says Its Drivers Aren't Employees. The Courts Will Decide

[Omaha Steve]

By Josh Eidelson

Five days a week for 10 years, Agostino Scalercio left his house before 6 a.m., drove to a depot to pick up a truck, and worked a 10-hour shift delivering packages in San Diego. He first worked for Roadway Package System, a national delivery company whose founders included former United Parcel Service (UPS) managers, and continued driving trucks when FedEx (FDX) bought RPS in 1998. FedEx Ground assigned Scalercio a service area. The company, he says, had strict standards about delivery times, the drivers’ grooming, truck maintenance, and deadlines for handing in paperwork, and deducted money from his pay to cover the cost of his uniform, truck washings, and the scanner used to log shipments.

FedEx Ground didn’t pay overtime or contribute to Scalercio’s Social Security benefits. That’s because since acquiring RPS and introducing its ground service, the FedEx unit has treated drivers as independent contractors, not employees. “The saying around the building was, ‘It’s their sandbox. We only get to play in it,’ ” says Scalercio, who no longer drives for FedEx Ground but is one of hundreds of current and former drivers suing the FedEx subsidiary, seeking back pay for overtime worked and for paycheck deductions. (The parent company is not a defendant.)Scalercio earned about $90,000 a year from FedEx, he says, but 40 percent to 60 percent of that was lost to deductions and truck expenses.

Independent contractors have always been a part of FedEx’s ground business, and the company says that’s helped differentiate it from the competition. “The business model … has been highly successful and beneficial—to customers, contractors, and FedEx Ground,” the company said in a statement. (Drivers at UPS are employees and have a union.) But several recent court decisions have rejected FedEx Ground’s arguments that the drivers are contractors, which could stem a broader trend of U.S. companies treating more workers as contractors instead of employees.

STORY: Can Uber Fire Drivers for Tweeting About Uber?

FedEx Ground has faced its drivers in court repeatedly over the past decade. In 2009 the D.C. Circuit Court of Appeals sided with FedEx, saying the drivers were independent contractors. In 2010 a federal district court in Indiana, which was assigned the task of coordinating 28 certified class-action lawsuits brought by drivers in dozens of states, also sided with the company, throwing out state claims. In recent months, FedEx Ground’s fortunes have shifted. In August the U.S. Ninth Circuit Court of Appeals in San Francisco, reviewing the Indiana decision, declared that drivers in California and Oregon were employees.

FULL story at link.



Photo Illustration by 731

[The Magistrate]

1. The 'Independent Contractor' Wheeze Ought To have Been Struck Down Long Ago, Sir

It is an obvious subterfuge.

Someone who 'contracts' out to only one company is not an independent contractor but an employee, whatever the paper-work may be.

[unblock]

4. there's a fairly straightforward test, one i'm sure fails in this case.

I don't think the irs can get rid of the independent contract concept entirely, because many so-called independent contractors really are independent.

in this case, it's hard to see them as independent.

i strongly suspect that behavior is controlled by fedex, and also the financials. i can't see each driver having a separate negotiation for compensation, i'd bet there's a standard pay scale. and obviously the truck is company-supplied and they have to wear a uniform!


http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Self-Employed-or-Employee

In determining whether the person providing service is an employee or an independent contractor, all information that provides evidence of the degree of control and independence must be considered.

Common Law Rules

Facts that provide evidence of the degree of control and independence fall into three categories:

1.Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?


2.Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)


3.Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?


Businesses must weigh all these factors when determining whether a worker is an employee or independent contractor. Some factors may indicate that the worker is an employee, while other factors indicate that the worker is an independent contractor. There is no “magic” or set number of factors that “makes” the worker an employee or an independent contractor, and no one factor stands alone in making this determination. Also, factors which are relevant in one situation may not be relevant in another.

The keys are to look at the entire relationship, consider the degree or extent of the right to direct and control, and finally, to document each of the factors used in coming up with the determination.

[valerief]

2. Holy shit. That's how the elite is killing social security? nt

[world wide wally]

3. No wonder the Republicans want to get rid of the Post Office...

And any other thing that keeps employers from treating employees like shit.