FedEx Ground (Pittsburg, PA), the division FedEx created seven years ago, is battling a lawsuit brought by 14,000 drivers countrywide. The drivers� chief complaint is that they are treated like employees, yet they receive no benefits, like overtime pay, health insurance and workers� compensation. They also want to be reimbursed for back operating expenses and lost benefits.
If the drivers are successful, FedEx Ground could face an unprecedented increase in operating costs and a complete overhaul of its work force.
The drivers, as reported by the Associated Press, are suing because FedEx refuses to hire them as employees. The drivers fit the description of independent contractors in that they do own their own trucks and pay their own operating expenses. But, they claim FedEx controls just about everything they do: the hours they work, where and when they pick up or deliver packages, how they maintain their trucks, even how they dress. FedEx also prohibits drivers from using their trucks to carry non-FedEx shipments.
�They�re calling these drivers independent contractors, but they�re really employees,� says Christopher Gilreath, a lawyer for a group of Memphis drivers who filed suit against FedEx in federal court last month.
Gilreath said more than a dozen similar suits are planned or have been filed around the country. The lawsuits directly affect small groups of current or former drivers, and some plaintiffs have already sought class-action status that could expand the reach of court rulings.
Last year, a Los Angeles court decided that one category of contract drivers for FedEx Ground should be treated as company employees. FedEx has said it will appeal.
FedEx cranked up its competition with Atlanta-based UPS in 1998 when it bought several trucking operations, including RPS Inc. which later became FedEx Ground. RPS had relied on contract drivers since its creation in 1985. Drivers for UPS are company employees driving company-owned trucks.
The FedEx Ground unit�s operating income grew 16 percent to $604 million in fiscal 2005, accounting for almost $4.7 billion in revenue out of FedEx Corp.�s $29.4 billion total for the last fiscal year. |