FedEx Drivers are not Independent Contractors
For the purposes of reimbursement of work-related expenses, drivers working for FedEx were employees and not independent contractors, a California Court of Appeal recently affirmed.
FedEx hired the plaintiff class members as drivers. Upon being accepted for employment, the drivers executed agreements identifying each of them as an “independent contractor, and not as an employee … for any purpose.” FedEx required the drivers to provide their own trucks meeting FedEx specifications, to mark the truck with the FedEx logo, to pay for all costs of operating and maintaining the truck, to wear a FedEx uniform, and to lease a scanner from FedEx.
The court disregarded FedEx's contractual designation of the drivers as independent contractors, stating that the employer’s label will be “ignored if their actual conduct establishes a different relationship.” As has previously been the case, the court focused on the extent that the employer had the right to control the means by which the worker accomplished the work. In finding that the drivers were employees, as opposed to independent contractors, the court noted that FedEx exercised control “over every exquisite detail of the drivers’ performance, including the color or their socks and the style of their hair.” The court also found that the terminal managers were the drivers’ immediate supervisors and were able to reconfigure drivers’ routes without regard to any loss of income by the drivers. Finally, the court rejected FedEx’s argument that an entrepreneurial opportunity existed for the drivers.
The court’s ruling is yet another reminder of the difficulty businesses face in classifying workers as independent contractors and the consequences that can follow if the wrong classification is chosen. Please contact us directly to discuss any questions relating to the effect this ruling may have on your workplace.