U.S. Appeals Court Sides with Kansas Drivers in FedEx Employee Status Case

In early July, FedEx lost a round in employment practices litigation over whether or not its drivers are employees of the company under Kansas labor statutes.

On July 8, the U.S. Court of Appeals for the 7th Circuit agreed with the findings of the Kansas Supreme Court, which stated: “Given the undisputed facts presented to the district court in this case, the plaintiff drivers are employees of FedEx Ground Package System, Inc. as a matter of law under the Kansas Wage Payment Act, K.S.A. 44-313 et seq., and a plaintiff driver does not lose his or her employee status by acquiring another route for which that plaintiff is not the driver.”

Carlene M. Craig, et al. v. FedEx Ground Package System, Inc.is one of numerous class actions filed in various states by current and former FedEx drivers that were consolidated into multidistrict litigation and assigned to the U.S. District Court for the Northern District of Indiana. The Kansas class action was designated as the lead case.

In the suit filed in 2003, the Kansas drivers alleged they were employees, not independent contractors under both state and federal law. They are seeking to be reimbursed for business expenses, and back pay for overtime and other wages, according to court documents.

The company maintained the drivers were correctly classified as independent contractors.

The MDL court previously sided with FedEx in the Kansas case, focusing on the extent to which FedEx had a right to control its drivers, regardless of the actual control it exercised over them.

The 7th Circuit stated however that: “The Kansas Supreme Court’s decision necessitates the reversal of the MDL court’s grant of summary judgment in favor of FedEx and denial of the plaintiff drivers’ summary judgment motion.”

The appeals court reversed the MDL court’s decision and remanded it, instructing the MDL court to “to enter judgment for the plaintiff drivers that they are employees of FedEx for purposes of the KWPA and for further proceedings consistent with this opinion, which ultimately may require a remand of the case to the Kansas district court for a determination of damages.”

In June, FedEx settled a similar lawsuit brought by drivers in California over the independent contractor designation, which the Ninth Circuit court said was a case of employee misclassification, according to a Forbes report.

FedEx has denied that it ever misclassified employees but in 2011 moved away from the independent contractor operating model.

Other companies, such as Google and Uber are facing similar charges in disputes over the classification of drivers that work for them.