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FedEx lawsuit could cost $630 million

August 8, 2007

A federal judge in South Bend this month will weigh whether lawsuits filed by independent contractors against FedEx Corp. in two dozen states should be combined.

About 150 independent contract drivers, designated by FedEx as part-time employees, seek to be classified as full-time workers, according to Bloomberg. That would entitle them to benefits and paid time off.

FedEx also could be forced to buy up to 15,000 trucks used by the drivers, at $45,000 apiece. According to some estimates, a favorable ruling for contract drivers could cost the Memphis-based company $630 million.

FedEx has been nipping at the heels of larger United Parcel Service, grabbing nearly 20 percent of the ground-delivery market, while UPS has shrunk to 70 percent from 82 percent over the past decade.

The Teamsters union, which represents UPS drivers, is behind the flurry of lawsuits, according to FedEx. It filed as evidence with the court copies of emails between the union and attorneys representing the independent drivers.

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