Federal Court Issues Decision in Appeal of Three Contractor Cases
August 27 2014 - 12:45PM
Business Wire
FedEx Ground continues to enhance its
successful business model in light of shifting legal and regulatory
developments in several states
FedEx Ground, a subsidiary of FedEx Corporation, (NYSE: FDX)
reports today that a decision by a three-judge panel of the United
States Court of Appeals for the Ninth Circuit reversed previous
rulings by the District Court for the Northern District of Indiana
in three class action cases involving mostly former independent
contractors for FedEx Ground. The court held that those independent
contractors operating in California from 2000-2007 and Oregon from
1999-2009 were employees according to the panel’s interpretation of
state laws. The model that the court reviewed is no longer in use.
Since 2011, FedEx Ground has only contracted with incorporated
businesses, which treat their drivers as their employees. FedEx
Ground will seek review of these decisions, including review by the
entire Ninth Circuit.
“We fundamentally disagree with these rulings, which run counter
to more than 100 state and federal findings – including the U.S.
Court of Appeals for the D.C. Circuit – upholding our contractual
relationships with thousands of independent businesses,” said FedEx
Ground Senior Vice President and General Counsel Cary Blancett.
“The operating agreement on which these rulings are based has been
significantly strengthened in recent years, and we look forward to
continuing to work with service providers across our network to
provide customers the industry’s most reliable service.”
In light of legal and regulatory developments in several states,
FedEx Ground, a leader in cost-effective, small-package ground
shipping, has taken a number of steps in recent years to enhance
its operating agreements with the independent businesses that
contract with the company to provide transportation services. As
the latest step in this ongoing effort, FedEx Ground will
transition to new independent service provider (ISP) agreements in
the states of California, Oregon, Washington, and Nevada.
Currently, FedEx Ground contracts with more than 550 businesses
that provide pickup and delivery service in California. Those
businesses averaged nearly $500,000 in revenue last year, with
nearly 50 of them topping $1 million or more in earnings. In
Oregon, more than 100 independent businesses provide services for
FedEx Ground. More than one-third of the businesses in these two
states are minority or female-owned.
“Small businesses are the foundation and growth engine of the
U.S. economy, and we are proud of our long-standing contractual
relationship with these service providers – each of which agrees to
treat their personnel as employees and to comply with all
applicable federal and state laws,” said FedEx Ground Vice
President of Contractor Relations Sean O’Connor. “We remain
committed to maintaining a business model that has been proven
successful for our customers, service providers, and
shareowners.”
About FedEx Ground’s Independent Business Network
FedEx Ground contracts for transportation, pickup and delivery
services with more than 8,200 service providers in the United
States and Canada whose operations employ more than 32,500 people
as drivers, managers, helpers and staff. Those businesses generate
more than $4 billion a year in revenue and average nearly $450,000
in annual revenue per business.
About FedEx Ground
FedEx Ground, a part of FedEx Corp. (NYSE: FDX), is a leader in
cost-effective, small-package ground shipping, offering dependable
service to businesses and residential customers throughout the U.S.
and Canada. FedEx Ground is faster to more locations than its
primary competitor and includes FedEx Home Delivery for residential
customers and FedEx SmartPost specializing in the delivery of
low-weight packages from businesses to residential customers
through a partnership with the U.S. Postal Service®.
About FedEx Corp.
FedEx Corp. (NYSE: FDX) provides customers and businesses
worldwide with a broad portfolio of transportation, e-commerce and
business services. With annual revenues of $46 billion, the company
offers integrated business applications through operating companies
competing collectively and managed collaboratively, under the
respected FedEx brand. Consistently ranked among the world's most
admired and trusted employers, FedEx inspires its more than 300,000
team members to remain "absolutely, positively" focused on safety,
the highest ethical and professional standards and the needs of
their customers and communities. For more information, visit
news.fedex.com.
FedExMelissa Charbonneau,
901-434-5950melissa.charbonneau@fedex.com
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