FedEx To Finally Settle Decade-Old Employee Misclassification Lawsuits

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Back in 2005, FedEx drivers filed the first of many misclassification lawsuits by drivers for that company. Now, as a whole new generation of employers is being accused of misclassifying their workers, the delivery company has proposed a settlement with its former independent contractor drivers. The lawsuits were combined in a single case in Indiana, and involved 12,000 drivers from 20 states.

The drivers made similar claims to misclassification suits that you may have read about recently: they claimed that while the company hired and paid them as independent contractors, they were acting as employees. They were, for example, required to drive FedEx-branded trucks, wear uniforms, and use FedEx scanners.

Payroll is a lot simpler when hiring independent contractors, since workers must pay their own self-employment tax and don’t receive benefits like health insurance, or retirement, and they also aren’t owed expense reimbursement unless that’s spelled out in their contract.

The company switched from hiring drivers as independent contractors to signing contracts with outside firms that employ drivers in 2011. Drivers who worked before then time claim that they’re owed expenses that should have been covered as employees, like overtime pay and reimbursement of driving expenses.

Depending on how long they worked for the company, some drivers could receive up to tens of thousands of dollars from the settlement.

FedEx to settle driver lawsuits in 20 states for $240 million [Reuters]