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FedEx loses appeal on driver classification 14 July 2015

Findings could have consequences for other suits currently pending

A State Supreme Court ruling that drivers are employees, not contractors, has been upheld, after FedEx lost a legal dispute with nearly 500 drivers in Kansas. The Company had formerly classified some delivery drivers in the US as independent contractors

It stopped using an independent-contractor business model in 2011 and has since switched to using only incorporated businesses that employ its ground delivery drivers. The Kansas drivers sued FedEx Ground in 2003 to recoup retroactive costs and expenses, as well as overtime wages. FedEx has already made provisions in case of a loss.

The Seventh Circuit Court of Appeals stated that members of a Kansas class-action suit are employees, not independent contractors, a finding in line with the 2014 opinion of the Kansas Supreme Court.

This latest finding could also have consequences for 19 other class-action suits against FedEx currently pending, though FedEx has requested that these cases be decided separately, due to differences in state laws. In June, FedEx announced a settlement with California drivers, paying US$228.0 million after a Ninth Circuit Court of Appeals judgement against the Company.