Thousands of drivers for the home-delivery subsidiary of the FedEx Corporation do not have the right to join a union because they are independent contractors and not employees, a divided federal appeals court in Washington ruled on Tuesday. þþThe ruling was FedEx Home’s biggest victory in a series of disputes with the Teamsters union, class-action lawyers and state officials over whether it had misclassified its drivers as contractors rather than employees to deny them various benefits and the right to unionize.þþThe ruling overturned a decision by the National Labor Relations Board, which had held that these drivers were employees because they were an essential part of FedEx Home’s business. The labor board also said that the company “exercised substantial control” over the performance of the drivers’ functions, noting that they must dress the way the company wants, operate vehicles that meet the company’s specifications and must display the FedEx logo and colors. þþIn the 2-to-1 ruling, the United States Court of Appeals for the District of Columbia Circuit concluded that FedEx Home did not have to bargain with the Teamsters even though a majority of drivers at two terminals in Massachusetts had voted overwhelmingly to join that union. FedEx Home, with 4,000 drivers, is a division of FedEx Ground Packaging Systems and delivers packages up to 75 pounds, mainly to residential customers.þþThe court found that FedEx Home’s drivers have “entrepreneurial potential” and can operate multiple routes and sell routes as well as hire helpers and additional drivers, and therefore should be considered independent contractors.þþFedEx Home applauded the ruling. Maury Lane, a company spokesman, said the decision and a recent ruling in Washington State “confirm that FedEx Ground contractors are independent business owners who choose to own and operate their own enterprises as they like.”þþKen Hall, the director of the Teamsters’ package division, criticized the ruling. “We are confident that the decision will not survive review by the full court or by the U.S. Supreme Court,” he said. “We remain committed to those FedEx drivers who have sought the protection of a legitimate collective bargaining agreement to improve their lives.”þþIn the ruling, Judge Janice Rogers Brown, an appointee of George W. Bush, and Judge Stephen F. Williams, a senior judge appointed by Ronald Reagan, signed the majority opinion. Judge Merrick B. Garland, who was appointed by Bill Clinton, dissented, writing that the drivers should be considered employees.þþIn his dissent, Judge Garland wrote that the drivers had little “entrepreneurial opportunity,” rarely take advantage of it and stand to make little money from selling their trucks or routes. He also argued that for drivers to hire helpers is hardly entrepreneurial and noted that FedEx Home puts limits on drivers’ ability to sell routes and can freely change their routes.þþLawyers for the plaintiffs voiced concern that the ruling could affect a nationwide class-action suit involving 27,000 FedEx Ground drivers, who accuse the company of misclassifying them as contractors to deny them overtime and health, retirement and other benefits. þþLast December, the company agreed to pay $27 million to settle a misclassification lawsuit brought on behalf of 203 drivers in California. þþIn that suit, a state judge wrote that FedEx Ground had “close to absolute control” over the drivers, adding that the operating agreement they signed was “a brilliantly drafted contract creating the constraints of an employment relationship” disguised in the independent contractor model.þþ
Source: NY Times
