IBJNews

N.Y. attorney general sues FedEx over driver status

Back to TopCommentsE-mailPrintBookmark and Share

New York Attorney General Andrew Cuomo sued FedEx Corp. in state court Friday, saying the delivery company improperly classifies ground delivery drivers as independent contractors rather than employees.

In the suit, filed in New York’s Supreme Court, Cuomo said the company’s FedEx Home Delivery service classifying its drivers as contractors rather than employees fails “to provide its drivers the rights” afforded other employees and does not comply with the state’s labor laws.

The contractor model gives FedEx’s Ground unit a cost advantage of as much as 30 percent over rival United Parcel Service Inc., University of Pittsburgh business professor Marick Masters has estimated.

“FedEx has the power to control, and does in fact control, almost all aspects of its drivers’ work,” including “hours, job duties, routes, and even clothing,” Cuomo said in the filing. “The drivers are clearly perceived by the public to be employees.”

The Memphis, Tenn.-based company, which has a distribution hub in Indianapolis, says its contract-driver model is legal and was approved for tax purposes by the U.S. Internal Revenue Service in 1994.

Some FedEx drivers have filed private litigation. FedEx in June won partial dismissal of a class-action lawsuit filed in Indiana by contract drivers who contend they are entitled to full benefits because the company treats them as employees. them as employees.

A federal judge in South Bend, threw out some claims in the suit, saying the workers failed to exhaust out-of-court, administrative procedures that might help them get the medical, dental and retirement benefits they seek.

The company’s Home Delivery service has 701 contractors that, combined, employ 2,500 workers, said Maury Lane, a FedEx spokesman. The average contractor had revenue of $190,000, he said, with the 10 largest billing an average of $2.6 million in 2009.

“It is disappointing that in the midst of his campaign for governor Attorney General Cuomo would choose to destroy that many jobs in New York,” Lane said, commenting after reviewing a copy of the filing.

“Any suggestion that the Attorney General’s office handling of this case is improper is absurd,” John Milgrim, a spokesman for Cuomo, said in an e-mailed statement. “This office and a group of other states had been negotiating with FedEx for months. The case was filed, as was a similar case by Kentucky, when those discussions broke down,” Milgrim said.

ADVERTISEMENT

  • Don't work there
    The FedEx structure has been that way for a long time. I don't understand that if you don't like the structure going into the job don't work there. You can't go work somewhere knowing the rules and then cry foul after you start working there.

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. I am a Lyft driver who is a licensed CDL professional driver. ALL Lyft drivers take pride in providing quality service to the Indianapolis and surrounding areas, and we take the safety of our passengers and the public seriously.(passengers are required to put seat belts on when they get in our cars) We do go through background checks, driving records are checked as are the personal cars we drive, (these are OUR private cars we use) Unlike taxi cabs and their drivers Lyft (and yes Uber) provide passengers with a clean car inside and out, a friendly and courteous driver, and who is dressed appropriately and is groomed appropriately. I go so far as to offer mints, candy and/or small bottle of water to the my customers. It's a mutual respect between driver and passenger. With Best Regards

  2. to be the big fish in the little pond of IRL midwest racin' when yer up against Racin' Gardner

  3. In the first sentance "As a resident of one of these new Carmel Apartments the issue the local governments need to discuss are build quality & price." need a way to edit

  4. As a resident of one of these new Carmel Apartments the issue the local governments need to discuss is build quality & price. First none of these places is worth $1100 for a one bedroom. Downtown Carmel or Keystone at the Crossing in Indy. It doesn't matter. All require you to get in your car to get just about anywhere you need to go. I'm in one of the Carmel apartments now where after just 2.5 short years one of the kitchen cabinet doors is crooked and lawn and property maintenance seems to be lacking my old Indianapolis apartment which cost $300 less. This is one of the new star apartments. As they keep building throughout the area "deals" will start popping up creating shoppers. If your property is falling apart after year 3 what will it look like after year 5 or 10??? Why would one stay here if they could move to a new Broad Ripple in 2 to 3 years or another part of the Far Northside?? The complexes aren't going to let the "poor" move in without local permission so that's not that problem, but it the occupancy rate drops suddenly because the "Young" people moved back to Indy then look out.

  5. Why are you so concerned about Ace hardware? I don't understand why anyone goes there! Every time ive gone in the past, they don't have what I need and I end up going to the big box stores. I understand the service aspect and that they try to be helpful but if they are going to survive I think they might need to carry more specialty parts.

ADVERTISEMENT