Drivers for FedEx Unit Are Employees, NLRB Regional Director Determines

BNA Daily Labor Report
Rick Valliere

October 2, 2006. Drivers for FedEx Home Delivery are statutory employees of the company and not independent contractors, a National Labor Relations Board regional director ruled Sept. 20, ordering a union representation election sought by the Teamsters union at two Massachusetts locations (FedEx Home Delivery & Teamsters Local 24, NLRB Cases 1-RC-22034, 22035, 9/20/06).

The decision is the latest in a string of victories before various tribunals around the country by FedEx Home Delivery drivers contesting what they consider illegal misclassification as independent contractors.

It also is the fourth recent decision by an NLRB regional director concluding that FedEx Home Delivery drivers should be classified as employees.

"The facts adduced in this case are remarkably similar to those in the above cases, and, accordingly, do not warrant a departure from the results in those cases," wrote NLRB Region 1 Director Rosemary Pye.

The board has affirmed the findings by regional directors concerning drivers in New Jersey in 2004 and 2005 and in Northboro, Mass., in 2006.

FedEx Ground, the parent of FedEx Delivery, in a statement, said the decision "is not surprising or inconsistent" with Pye's earlier ruling, which the company is appealing. "Our contractors have shown us repeatedly that they do not want third-party representation as we currently have no unionized facilities," it added.

Galen Munroe, a spokesman for the International Brotherhood of Teamsters, said the election ordered in January in Northboro has been postponed indefinitely because of pending unfair labor practice charges. The Teamsters lost one of the New Jersey elections in a unit that included other workers in addition to drivers, while the other election involved an independent union, he said.

In addition to the NLRB rulings, advocates for FedEx drivers are pursuing a nationwide class action lawsuit, currently in the discovery stage, consolidating cases from around the country (In re FedEx Ground Package Sys. Inc., Employment Practices Litigation, N.D. Ind., No. 03:05-MD-527-RM, filed 8/10/05).

Other rulings upholding the employee status of drivers, according to attorneys for the drivers, include a recent court decision in California, Internal Revenue Service rulings in Wisconsin and Missouri, and unemployment agency rulings in various states, including a Massachusetts case in August (163 DLR A-4, 8/23/06 ).

FedEx Home Established in 1998

FedEx Home Delivery was established in 1998 when the parent company acquired Roadway Package Systems Inc. Almost all of the subsidiary's drivers are classified as independent contractors, while drivers for the parent company are classified as employees.

The units found appropriate by Pye are 24 drivers at a company terminal in Wilmington, Mass., and 16 drivers at a separate annex terminal, also in Wilmington.

In her decision, Pye noted that the company "exercises substantial control" over how drivers perform their jobs. Although drivers own their own trucks, the vehicles must display a company logo and drivers must wear a company uniform. The company "unilaterally establishes the rates of compensation," she found.

Factors cited by the company--drivers' responsibility for their vehicles, flexibility in scheduling, absence of fringe benefits, and lack of withholding by the company--are insufficient to demonstrate independent contractor status, she concluded.

By Rick Valliere

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