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36 Lab. & Emp. L. 1 (2007-2008)

handle is hein.journals/laboemplo36 and id is 1 raw text is: IOymfl t 'AL 2007 VOLUME 36,, NUMBER -1 Section of Labor and Emnployrsent Lain Amnerican BrAssociation LE L Thirty-six cases from across the country challenging FedEx's desig- ation of its drivers as independent ontractors were transferred to the Northern District of Indiana in Au- gust 2005 by the judicial panel on multidistrict litigation. In re FedEx Ground Package System, Inc., Em- ployment Practices Litigation, No. 93:05-MD-527 RM (MDL-1700). On the surface, at stake are in- dependent contractor agreements between FedEx and its package de- livery drivers. And the proceed- ings so far have focused on weed- ing out untenable claims and defenses, defining the proper scope of discovery, and, most re- cently, briefing the issue of class certification, issues that have their own interest for litigators. But it is the ultimate resolution of the litigation's merits that could have long-range consequences be- yond the package delivery industry because this and other cases in- volving FedEx challenge the ability of employers to carve some of their operations from the fabric of federal and state regulations governing employment rights. The FedEx operating model con- trasts with that of its competitors, including industry leader UPS, whose package delivery drivers are employees and, for the most part, union members. In FedEx's view, its model benefits FedEx drivers by allowing them to run their own businesses. In the plaintiffs' view, labeling them as independent con- tractors deprives them of an array of rights. Thus, claims in the multi- district litigation that depend on finding employee status arise under the Family and Medical Leave Act, the Employee Retirement Income Security Act, federal and state disability laws, state wage payment laws, and overtime laws. The multidistrict litigation is not the first skirmish in the FedEx legal battle. In fact, earlier successful challenges to the classification of package delivery drivers as inde- pendent contractors have been launched in National Labor Rela- tions Board (NLRB) proceedings by the Teamsters attempting to or- ganize the drivers of FedEx and its predecessor, Roadway Package Systems. See, e.g., Roadway Pack- age Sys., 292 NLRB 376 (1989), enf'd, 902 F.2d 34 (6th Cir. 1990). Independent contractors are ex- cluded from protections afforded employees under section 7 of the National Labor Relations Act, in- cluding the right to organize and engage in collective bargaining through a union representative. But the NLRB has determined in a series of representation proceed- ings that FedEx single-route drivers are employees, not independent contractors. The NLRB relied on indicia of AP PHOTO/JOHN RUSSELL employee status, including evi- dence that (1) the drivers' function is part of FedEx's core operations, (2) drivers do business in the name of FedEx, wear FedEx uni- forms, and drive trucks with FedEx colors and logo, (3) FedEx exercis- es substantial control over the drivers' work performance under take it or leave it agreements, and (4) the drivers' pay is based on a unilaterally established con- tractors' rate of compensation, with little opportunity for drivers to influence their income through their own efforts or ingenuity. In July 2007, the NLRB certified the results of a representation elec- tion in favor of the Teamsters at the FedEx terminal in Wilmington, continued on page 12 Contacto Staus f FeE× GoundDriers halAnge By Noa LoMate

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