Eight States' Attorneys General Eye FedEx Drivers
The attorneys general of eight states Thursday asked FedEx to work with them "in addressing changes in FedEx Ground's business model" regarding worker classification.
The eight -- from Iowa, Kentucky, Missouri, Montana, New Jersey, Ohio, Rhode Island and Vermont -- express "common concerns regarding the proper employment classification of FedEx Ground drivers" already under review in some parts of the country.
"We are happy to work with the attorneys general to answer any questions they may have," said FedEx spokesman Maury Lane. "The right of FedEx Ground independent contractors to own and operate their businesses has been repeatedly validated, most recently by the U.S. Court of Appeals for the D.C. Circuit. We are confident that our discussions with the AG's will be productive."
FedEx considers its drivers independent contractors, while some of the drivers and some states contend they are employees. As independent contractors, drivers aren't afforded some of the labor protections guaranteed to employees. A federal appellate court in May, referred to by Lane, overturned a ruling by the National Labor Relations Board that had found certain workers employees and not independent contractors.
In lawsuits across the country, FedEx has been accused of misclassifying pickup and delivery drivers as independent contractors and of taking improper deductions from their pay while failing to pay overtime. Many of those cases are now consolidated and are being heard by a federal judge in Indiana.
Plaintiffs, including some represented by law firms in Batesville, Miss., and Memphis, maintain that what workers do, not what they're called, should determine their classification.
"State and local governments in Ohio are being cheated out of hundreds of millions of dollars each year as a result of employee misclassification," said Atty. Gen. Richard Cordray of Ohio in a separate statement. "We are committed to aggressively pursuing these misclassification cases to level the playing field for businesses that play by the rules and to protect Ohio's workers."
On another labor front, the House of Representatives passed a bill earlier this year that would subject FedEx Express workers not directly involved with the company's aircraft to the jurisdiction of the National Labor Relations Act and its rules permitting labor union organizing at the local level. The Senate is expected to consider the issue by the end of this summer.
FedEx Express employees are currently under the jurisdiction of the Railway Labor Act, which requires unions to organize under national labor agreements. FedEx earlier this month unveiled a multi-million-dollar campaign to persuade the public -- and on-the-fence senators -- that the provision passed by the House is a "bailout" of its chief rival, Atlanta-based UPS, whose drivers are unionized.
The International Brotherhood of Teamsters is actively seeking to organize FedEx drivers, and its efforts would be simplified by a change in the law. FedEx maintains that Express employees belong under the Railway Labor Act and national labor agreements to prevent single union locals from striking and bringing the worldwide logistics giant to its knees. FedEx says the effort to make it easier to organize the drivers is aimed at stifling competition and harming overnight delivery of crucial items.
"FedEx can't hide from its responsibilities to its workers," Ken Hall, a Teamsters International vice president, said in a statement emailed to news organizations Thursday. "Federal and state agencies are taking action to make sure FedEx doesn't skirt the law and pays its fair share. Thanks to officials like these attorneys general, FedEx and CEO Fred Smith won't be allowed to profit from this scheme at the expense of its work force and the American taxpayers."
The eight attorneys general say in their letter to FedEx general counsel Christine P. Richards that their individual states' laws regarding workers compensation, unemployment insurance, wage and hour protections and civil rights protections are their responsibilities and are all connected to employment status. They say that in order to address the issues, they have formed a "working group" to represent their interests "when the company considers any changes to its current business practices."
"While employment laws are unique to each jurisdiction, each state is committed to ensuring proper employment classification for purposes of the state employment programs we administer," the letter says. It also says the eight want to work with FedEx to make their states "whole for past practices."
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