Appeals Court Finds FedEx Ground Misclassified Kansas Drivers

TruckingSurv

Seasoned Expediter
From Land Line — August/September 2015

http://browndigital.bpc.com/display_article.php?id=2226020&id_issue=266759 (looks like you need a login to view this article), the summary is this: The Seventh Circuit Court of Appeals ruled recently that nearly 500 drivers in Kansas were misidentified as independent contractors when they should have been classified as employees, according to a ruling issued by the court on July 8.

Since almost all expedite companies consider drivers independent contractors does this ruling have further reaching implications?

From the article: "Since 2011, FedEx Ground has contracted only with incorporated businesses, which treat their drivers as their employees."

Will expedite carriers be moving toward only contracting with incorporated businesses?
 

davekc

Senior Moderator
Staff member
Fleet Owner
If they make a big stink about it, it would be a logical progression. Then there is no IC to worry about it.
 

beachbum

Veteran Expediter
Owner/Operator
One of the problems most companies have when it comes to IC's is the IRS and there definition of what's a employee and what's a business.

The FMCSA has their rules for contractors and the IRS has their rules and it seems that the IRS is winning out on their definition. FedEx has lost a couple of cases in the last year or so. Also with the WalMart ruling in Ca. about driver pay while doing other things then driving, there might be big changes coming as more and more IC'S (leased driver) file with the labor board and IRS. With company drivers it will be about u payed labor.
 

jjtdrv4u

Expert Expediter
when it comes down to the nitty gritty of the law, all owner operators in this business can be or could be considered w2 employees instead of 1099 independent contractors...courts have ruled this way in many cases over the years...including against ups and panther...

it all has the way you have to do this job...you have follow the rules and regulations, and policies and procedures of the company that you are leased on with....like an employee, instead of doing it your own way like an independent contractor...most are not going to take their bosses to court about it tho...
 

OntarioVanMan

Retired Expediter
Owner/Operator
when it comes down to the nitty gritty of the law, all owner operators in this business can be or could be considered w2 employees instead of 1099 independent contractors...courts have ruled this way in many cases over the years...including against ups and panther...

it all has the way you have to do this job...you have follow the rules and regulations, and policies and procedures of the company that you are leased on with....like an employee, instead of doing it your own way like an independent contractor...most are not going to take their bosses to court about it tho...
and yet the Post office has so many conditions to be followed to the contractor agreement...I figure as long as it is written out in contract and its part of the deal and both parties agree...
 

Deville

Not a Member
The expedite side of FEDEX is such an unpredictable model that it's doubtful that owner ops could be classified as employees. Ground guys basically punch a clock at the same time every day 5 to 6 days a week.
 
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OntarioVanMan

Retired Expediter
Owner/Operator
The expedite side of FEDEX is such an unpredictable model that it's doubtful that owner ops could be classified as employees. Ground guys basically punch a clock at the same time every day 5 to 6 days a week.
So do contractors for the PO and no one seems to take the PO to court....???
 

beachbum

Veteran Expediter
Owner/Operator
The expedite side of FEDEX is such an unpredictable model that it's doubtful that owner ops could be classified as employees. Ground guys basically punch a clock at the same time every day 5 to 6 days a week.

You could be wrong, does Fedex make your appointments, does Fedex require you to wear uniforms, does Fedex require you to take safety classes. You see all of those things can make you an employee if the IRS or adept. Of Labor wants to take them to court.

But when it comes down to all truckload carriers then 90 percent or more their lease drivers would be employees not I/C'd
 

OntarioVanMan

Retired Expediter
Owner/Operator
actually the wearing of a uniform is part of the "terms of contract" you want the contract, you accept the terms and sign off...your truck will be at dock # 211 every morning at 5am and you will do specific duties to load said truck. as described in said contract.
 

Deville

Not a Member
You could be wrong, does Fedex make your appointments, does Fedex require you to wear uniforms, does Fedex require you to take safety classes. You see all of those things can make you an employee if the IRS or adept. Of Labor wants to take them to court.

But when it comes down to all truckload carriers then 90 percent or more their lease drivers would be employees not I/C'd
No to all of the above.
I haven't been back to Green since orientation in 2004. No one in Green ever tried to mirco manage me either.



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Deville

Not a Member
actually the wearing of a uniform is part of the "terms of contract" you want the contract, you accept the terms and sign off...your truck will be at dock # 211 every morning at 5am and you will do specific duties to load said truck. as described in said contract.
Oddly enough loading the truck is NOT in the ground contract. It's FEDEX'S responsibility to hire loaders to load the trucks during a preload. However, no one wants the job so it falls on the contractor to load the truck himself for NO compansation, and there lies the issue that ground is having. One of many that just adds to the entire problem.

Me personally I would have loved to become a ground fleet owner, but at this stage I won't do it until certain things are ironed out and prices for routes collapse.

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beachbum

Veteran Expediter
Owner/Operator
actually the wearing of a uniform is part of the "terms of contract" you want the contract, you accept the terms and sign off...your truck will be at dock # 211 every morning at 5am and you will do specific duties to load said truck. as described in said contract.

And that is what could make you an employee and not independent contractor. Under IRS rules the company cannot tell you what to do period.

Independent Contractor Defined

Independent Contractor (Self-Employed) or Employee?
 
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Knvsmom

New Recruit
Driver
I have always wondered how FedEx C C gets by with having contractors and subcontractors, instead of employees myself?
We wear their uniforms, get our dispatches, messages, etc, from them, follow their rules, use their paperwork, wear their badges with our FedEx ID on it, have to follow their safety guidelines, and when we get called for random drug screens, it is through FedEx, not the O/Os company we work for. To me that sounds like they have the best of both worlds.
I'm new at this and haven't learned the business side of expediting though, so I will just look into it more I guess.
 

beachbum

Veteran Expediter
Owner/Operator
Doesn't FedEx require the O/O's to be incorporated since 2011. That's why they can get away with it.
 

Knvsmom

New Recruit
Driver
As I said Beachbum, I'm new at this, just a driver, so as to what kind of agreement or contract the owners of this truck have with FedEx, I don't have a clue?
Have pity on a rookie if you could and explain what it is to be incorporated please.
 

davekc

Senior Moderator
Staff member
Fleet Owner
As I said Beachbum, I'm new at this, just a driver, so as to what kind of agreement or contract the owners of this truck have with FedEx, I don't have a clue?
Have pity on a rookie if you could and explain what it is to be incorporated please.

If you are incorporated you in effect become a business. So, in this case, FedEx would be doing business directly with another business rather than a individual.
 
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Deville

Not a Member
I was incorporated before I signed on with FDCC. IT was required by my lender to be approved for credit. Being incorporated is good for the business we are in. To many liabilities to be taken on by an individual. The Expediter model is different from ground. I am not white glove so I can't say for certain if they are required to wear uniforms.
 
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