A federal judge had granted conditional approval to a $226.5 million settlement that would resolve claims that FedEx misclassified its drivers as independent contractors.
U.S. District Judge Edward M. Chen said his approval was only conditional because only about 77 percent of the 2,016 class members have filed claim forms, and because of disagreements about how to calculate attorneys’ fees. “[T]he Court at this juncture grants only conditional approval so that (1) it can consider the response rate after Plaintiffs make additional outreach to nonclaiming class members and (2) it can consider the supplemental brief related to fees,” Chen wrote (Alexander v. FedEx Ground Package Sys. Inc., No. 3:05-cv-00038 (N.D. Cal. April 12, 2016)).
In this collective action, FedEx drivers in California alleged that they were actually employees entitled to minimum wage and overtime payments under the Fair Labor Standards Act. The 9th U.S. Circuit Court of Appeals agreed, finding in 2014 that the drivers were employees because they must wear FedEx uniforms, drive FedEx-approved vehicles, and groom themselves according to FedEx’s appearance standards.
“FedEx tells its drivers what packages to deliver, on what days, and at what times. Although drivers may operate multiple delivery routes and hire third parties to help perform their work, they may do so only with FedEx’s consent,” the appellate court explained in Alexander v. FedEx Ground Package Sys. Inc., 765 F.3d 981 (9th Cir. Aug. 27, 2014).
The 9th Circuit simultaneously reached the same conclusion in a case involving Oregon drivers. See FedEx Misclassified Thousands of Drivers, 9th Circuit Holds and Earthquake in the Independent Contractor Field.