March 31, 2008: A federal judge in Indiana March 25 certified 19 separate classes of current and former FedEx Ground delivery drivers in as many states who are claiming that the company misclassified them as independent contractors and denied them entitlements guaranteed to employees by the various state laws (In re FedEx Ground Package System Inc. Employment Practices Litigation, N.D. Ind., No. 05-527, 3/25/08).
Despite this certification, Judge Robert L. Miller of the U.S. District Court for the Northern District of Indiana denied class certification for drivers in nine other states.
The state class certification rulings came five months after the judge granted national class status to the drivers for claims under the Employee Retirement Income Security Act, as part of a consolidated class action involving as many as 24,000 drivers from around the country (200 PBD, 10/17/07; 34 BPR 2533, 10/23/07). The class claims going forward in the 19 states deal with a range of state-specific laws on wages and hours, independent contractors, fraud, and unjust enrichment.
Lynn Rossman Faris, an attorney with Leonard Carder in Oakland, Calif., representing the drivers, told BNA March 27 the ruling was an overwhelming victory for the drivers. Faris and other attorneys for the drivers still are reviewing the ruling and have not yet decided whether to appeal any of the denied certifications, she said.
In a statement, FedEx said the ruling was a procedural one, and that it did not determine the proper classification of contractors or have an impact on the company's contractor model.
"FedEx Ground is proud to be associated with nearly 15,000 owner-operator contractors, all of whom made the decision to be self-sufficient, to be their own boss and to control their professional success," FedEx Corp. spokesman Maury Lane said. "Their right to pursue independence and economic opportunity is now being threatened by efforts on behalf of a few that will jeopardize the future of the majority."
Court Used Kansas Ruling as Guide
In a 164-page order, Miller based his state-by-state class certification determinations on another portion of his October order, which granted 102 drivers in Kansas class status on their claims under state wage and hour laws and common law. Miller used his Kansas ruling as a basis to determine whether differences in issues raised in the other states were substantial enough to make class certification inappropriate.
Miller granted class certification for drivers in Alabama, Arkansas, California, Florida, Indiana, Kentucky, Maryland, Minnesota, New Hampshire, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Wisconsin, and West Virginia. He denied certification in Illinois, Iowa, Massachusetts, Michigan, Mississippi, Missouri, Montana, South Dakota, and Virginia.
In the states where he granted class certification, Miller generally said, as he did in the Kansas determination, that the right of FedEx to control the drivers through their operating agreement and the company's policies and procedures predominated over other questions or facts that may vary from driver to driver. Whether the drivers were employees or contractors could be determined by an examination of the operating agreement and company policies in those states, the court said.
Miller consistently rejected several arguments from FedEx in its opposition to each of the class certifications, including arguments that former drivers who were named plaintiffs did not have standing and could not represent the interests of current drivers, that drivers varied between single routes and multiple routes and lacked commonality, and that evidence beyond the operating agreement would be necessary to establish whether the drivers were employees.
Rebuttable Presumption in Some States
In several of the states for which Miller denied class certification, including Illinois, Massachusetts, and Michigan, the denial stemmed from state laws that give workers a rebuttable presumption that they are employees, and place the burden on an employer to demonstrate that a worker is not an employee.
In those states, Miller said FedEx had a right to present evidence and testimony in those state cases on a case-by-case, driver-by-driver basis before a court could determine whether the drivers were employees or contractors.
In several other states in which class certification was denied, Miller pointed to case law that required an examination of factors beyond the right of control that would exist in the operating agreement between FedEx and the drivers. In some of those states, such as Missouri and Virginia, the actual exercise of that control also had to be examined, he said.
Although the judge granted class certification for drivers in the California case, he separately rejected the plaintiffs' request for a national class certification on claims that FedEx interfered with their rights to benefits under the Family and Medical Leave Act. The FMLA claims were included in the case filed on behalf of California drivers. Miller said the individual questions that needed to be answered to determine whether FedEx interfered with FMLA rights predominated over the classwide issues. The individual questions of whether a driver was entitled to FMLA leave, whether a driver gave notice of intent to take leave, and whether FedEx denied the leave predominate over the questions of whether the operating agreement between drivers and the company created an employment relationship and whether FedEx Ground is covered by FMLA, he said.
Before entering his order, Miller addressed concerns from FedEx that once the classes were certified, the plaintiffs would shift their focus from the language of the operating agreements with the drivers to anecdotal evidence and the experience of individual drivers.
Miller said the court resolved the class certification motions with the assumption that the plaintiffs would not present evidence other than the operating agreements and FedEx policies during the summary judgment or trial stages. He said if that assumption was incorrect, the court's rulings must be reconsidered. Miller gave lawyers for the plaintiffs 20 days to inform the court if the assumption was mistaken.
Miller also admonished FedEx attorneys for the types of cases they cited to support their arguments.
"[I]n case after case in which these rulings are made, the court has marveled at the elasticity of the holdings in the cases FedEx Ground cited for various propositions," the order said. "Today's opinion sets forth several of the most remarkable examples. Based on this experience of reviewing 40 pages of FedEx Ground briefs in each of the 29 cases, the court urges whatever counsel signs future FedEx Ground briefs to carefully read both the authorities cited in those briefs and Rule 11 of the Federal Rules of Civil Procedure."
The full text of the opinion is at https://d3n8a8pro7vhmx.cloudfront.net/teamstersforademocraticunion/pages/6369/attachments/original/1434126184/305527.pdf?1434126184.
By Laura Mahoney