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Court deems FedEx drivers employees, not contractors

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FedEx Corp. drivers in Kansas are employees, not independent contractors, says an appeals court, after consulting with the Kansas Supreme Court on the issue.

Wednesday's ruling by the 7th U.S. Court of Appeals in Chicago in In re: FedEx Ground Package System Inc. Employment Practices Litigation Chicago overturns a 2010 ruling by the U.S District Court in South Bend, Indiana.

There are 479 Kansas class plaintiffs who allege that they were improperly classified as independent contractors under the Kansas law, and seek repayment of all costs and expenses that they expended on behalf of FedEx during their time as FedEx drivers, according to the Kansas Supreme Court ruling.

The appeals court had asked the Kansas Supreme Court to determine whether drivers for the Memphis, Tennessee-based firm are employees under the Kansas Wage Payment Act. The state high court ruled in October 2014 they were and, based on its opinion, a three-judge federal appeals court panel agreed.

The Kansas Supreme Court based its ruling on a 1989 decision in determining an employer-employee relationship existed, according to the appeals court ruling.

Following the October ruling, the federal appeals court had asked the parties in the case to submit briefs on the issue, before issuing its ruling agreeing the drivers were employees.

“FedEx's understanding of the Kansas Supreme Court's decision strays from reality,” said the appeals panel. “The Kansas court restated the 20-factor test for determining employment status under the (Kansas Wage Payment Act) by eliminating ambiguous or duplicative descriptions; it did not enunciate a new test that requires further development of the factual record,” said the ruling.

“The application of Kansas law to FedEx's relationship with its drivers has been authoritatively decided by the Kansas Supreme Court,” said the panel, in remanding the case to the District Court for further proceedings.