Seattle Court Backs Fedex in Not Paying Overtime to Drivers
Seattle Court Backs Fedex in Not Paying Overtime to Drivers
http://online.wsj.com/article/SB123863039800180655.html
APRIL 1, 2009, 10:24 P.M. ET
Verdict Backs FedEx in Labor Case
Seattle Jury Says Delivery Service Doesn't Owe Overtime to 320 Drivers
By ALEX ROTH
A Seattle jury ruled that FedEx Corp. didn't illegally deny overtime pay to 320 drivers the company deemed to be independent contractors, resolving the latest in a series of battles over whether thousands of current and former FedEx drivers should be reclassified as employees.
The King County Superior Court jury ruled Tuesday that the drivers for FedEx Ground were properly classified as independent contractors, and thus weren't entitled to overtime payments and reimbursement for other expenses.
The Memphis, Tenn., company still faces many other lawsuits across the country, including a nationwide class-action suit related to the classification issue. The outcome of those cases will determine whether FedEx could be forced to pay hundreds of millions of dollars more to cover such costs as operating expenses and pension and health-care benefits. Nationwide, roughly 13,000 current FedEx drivers are classified as independent contractors.
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FedEx faces other lawsuits over the classification of its drivers. A worker in Miami loading packages in December.
"Our position that the men and women who contract with FedEx are independent contractors and control their professional success clearly resounded loudly with that jury," FedEx spokesman Maury Lane said Wednesday.
The verdict comes less than four months after FedEx agreed to pay $26.8 million to settle a similar California lawsuit. A California Superior Court judge ruled that 203 current and former drivers were employees, not contractors. That ruling was upheld on appeal.
Lynn Faris, lead lawyer in the nationwide class-action case, which is pending before a federal judge in Indiana, said the Seattle verdict has no impact on that case, which is based on federal retirement law. In addition, the verdict won't affect 20 other class-action suits that are based on various state laws.
Nonetheless, Ms. Faris called the Seattle verdict "very disappointing. I think it does show that juries can be misled by contracts written by fancy tax lawyers for big corporations."
No trial date has been scheduled in the nationwide class-action case.
Write to Alex Roth at alex.roth@wsj.com