Appeals court finds FedEx Ground misclassified Kansas drivers

By Greg Grisolano, staff writer

FedEx Ground lost another long-running legal dispute with misclassified drivers, this time at the federal appellate court level.

The Seventh Circuit Court of Appeals ruled recently that nearly 500 drivers in Kansas were misidentified as independent contractors when they should have been classified as employees, according to a ruling issued by the court on July 8.

The Kansas drivers sued FedEx Ground in 2003 to recoup retroactive costs and expenses, as well as overtime wages. The company controlled nearly every aspect of their businesses, and the drivers also claimed they made far less than employee drivers who worked for FedEx. They did not receive important employee benefits like health care, workers’ compensation, paid sick leave, vacation and retirement.

The Appeals court asked the Kansas Supreme Court to weigh in on whether the drivers were employees of FedEx under the Kansas Wage Payment Act. The state supreme court issued a ruling last year stating that the FedEx drivers met the qualifications of a 20-factor legal standard used in Kansas to determine whether an employer-employee relationship exists.

“The application of Kansas law to FedEx’s relationship with its drivers has been authoritatively decided by the Kansas Supreme Court: ‘Under the undisputed facts presented, the FedEx delivery drivers are employees for purposes of the KWPA,’” the appeals court stated.

In a related case, FedEx announced in June it had reached “an agreement in principle” to settle with more than 2,300 misclassified drivers in California for $228 million.

A statement by FedEx after the ruling states that the company “fundamentally disagrees” with the court’s decision, and that it is “exploring its legal options.”

Since 2011, FedEx Ground has contracted only with incorporated businesses, which treat their drivers as their employees. LL

Contributing Writer Clarissa Hawes contributed to this report.