Bloomberg News

Top Kansas Court Asked for Guidance in FedEx Drivers’ Case

July 12, 2012

A U.S. appeals court reviewing the first of 21 class-action cases by FedEx Corp. (FDX:US) drivers claiming they’re company employees and not independent contractors asked the Kansas Supreme Court how drivers are classified under that state’s law.

Current and former drivers sued the company’s FedEx Ground Package System Inc. unit alleging they were wrongly classified as contractors so the company could avoid paying costs and expenses they incurred. The drivers also seek payment of overtime wages.

A federal court in South Bend, Indiana, in August 2010 threw out the claims of drivers who were dispatched from Kansas. The lower court used its findings in that case to reach the same conclusion in related suits first filed in California, New York, New Jersey and other states.

“No absolute rule exists for determining whether a worker is an independent contractor or an employee,” under Kansas law, the Chicago-based appellate panel said in a ruling today asking that state’s high court for guidance.

Kansas courts have varied on whether drivers are employees or independent contractors, the judges said in the ruling, adding they’re “unsure” about the guiding principle for making such a determination.

Lead Case

“The question appears to be a close one. And the issue is of great importance not just to this case but to the structure of the American workplace,” they said.

The Kansas class-action suit has been treated as the lead case by both courts.

The appeals panel, composed of Chief Judge Frank Easterbrook and Judges Ilana Rovner and John Tinder, said it won’t rule on the appeal until it receives a response from the Kansas Supreme Court. The panel also has delayed ruling on the other cases until after it decides the Kansas drivers’ appeal.

George A. Barton and Peter J. Agostino, lawyers for the drivers, weren’t immediately available to comment on the appeals court request.

The nearly 9,000 business entities with which FedEx has contracts “are in fact independent contractors as ruled by the federal district court in Indiana,” Patrick Fitzgerald, vice president of communication for FedEx Ground, said in a telephone interview.

The case is Craig v. FedEx Ground Package System Inc., 10- 3115, U.S. Court of Appeals for the Seventh Circuit (Chicago)

To contact the reporters on this story: Andrew Harris in Chicago at aharris16@bloomberg.net; Emily Grannis in New York at egrannis@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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