FedEx has agreed to pay approximately $240 million to settle class actions by delivery drivers in 20 states. These drivers said they were misclassified as independent contractors and cheated on wages. As you may recall, there was a $226.5 million settlement last year by California drivers. Plaintiffs from states including New York, Pennsylvania and Indiana filed individual memoranda supporting their motions for settlements. Beth Ross, a lawyer for the Plaintiffs, told Law360 that roughly 12,000 class members were involved in the settlements.
Drivers accused FedEx Ground Package System Inc. of violating various state laws by deducting company business expenses from their pay. Plaintiffs further accused FedEx of engaging in unjust enrichment by virtue of classifying the workers as independent contractors and violating consumer fraud laws.
The cases were part of a number of lawsuits filed by FedEx drivers in about 40 states across the U.S. The suits, which were eventually consolidated in multidistrict litigation (MDL) and certified as class actions, alleged FedEx’s improper classification of its employees had cost them important benefits. The 20 instant cases were litigated in an Indiana federal court between 2005 and 2010, and the Seventh Circuit between 2011 and the present. In July 2015, the Seventh Circuit ruled in one of the class actions. finding that FedEx drivers were employees under Kansas state law.
After incorporating answers it received from its certified questions to the Kansas Supreme Court, the appellate panel ruled that the Indiana federal court overseeing the MDL was incorrect to grant FedEx summary judgment that the drivers were independent contractors under the Kansas Wage Payment Act. The recent settlements all arose from cases that went to the Seventh Circuit.
The Plaintiffs are represented by Beth Ross at Leonard Carder LLP, Robert Harwood at Harwood Feffer LLP and Susan Ellingstad at Lockridge Grindal Nauen PLLP. The case is In re: FedEx Ground Package System Inc. Employment Practices Litigation in the U.S. District Court for the Northern District of Indiana.