This lawsuit was originally filed in Los Angeles County Superior Court in 1999 with allegations that single-route FedEx Ground delivery drivers, Anthony Estrada, Jeffrey Morgan, Harvey Roberts among others, were incorrectly categorized as independent contractors with the company. The suit also alleged that the drivers were unfairly required to pay over a million dollars in out of pocket “operating expenses” to perform their job. Operating expenses for the drivers included all fuel, taxes, worker’s compensation insurance and regular maintenance of the delivery trucks as well as the cost of uniforms. Under the operating agreement, FedEx believed the drivers were independent contractors and not employees. The underlying issue of the case is that the FedEx drivers believed they should be properly classified as employees which would allow them to receive reimbursement for their expenses that FedEx would be required to provide. DECISION OF THE COURT
After initial filing in the court, this case was turned into a class action lawsuit. After several appeals by FedEx Ground Package Delivery System Inc., this case finally ended in 2007 with the Second District Court of Appeal in California affirming the lower court’s decision that current and former drivers were not independent contractors but employee’s. The court also issued a certification order and affirmed the plaintiffs' right to recover their attorneys’ fees. To determine the fee award the court reversed and remanded the case back to a lower court for reconsideration of the amount and method of determining those fees. After additional cross appeals, the employees were able to reverse two prior orders limiting the range of reimbursable expenses. The final award of the court effected over 27,000 FedEx drivers who were mislabeled as independent contractors. SIGNIFICANCE
Under this case the significance of the Courts...