According to court documents associated with the Oregon Labor class action, the drivers took FedEx to task for, in their view, improperly classifying them as independent contractors. As such, FedEx was found to underpay them for overtime, as well as undertaking various deductions from drivers that were alleged to have been illegal, assuming drivers were properly classified as employees.
Employers appear to be using independent contractors increasingly, in an effort to hold down costs in areas such as overtime and coverage for health benefits. As an independent contractor, a driver would have agreed-to tasks to perform on behalf of the client, but remains fairly autonomous given that the drivers are not direct employees.
Plaintiffs in the Oregon Labor Law class action against FedEx asserted that the level of supervision and protocol utilized over drivers was representative of an employer- employee relationship, and not an employer-independent contractor association. Drivers did not feel, truly independent.
An appellate court had previously determined that FedEx drivers were, indeed employees of the firm. Thus, the alleged withholding of overtime pay and various deductions were deemed to be illegal. Specifically, FedEx was alleged to have withheld funds from the pay packets of certain drivers for the electronic scanners necessary to track items out for delivery.
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Prior to the Oregon employment labor settlement, FedEx had settled a significant unpaid overtime lawsuit that involved some 12,000 plaintiffs across 22 states. That settlement was worth $240 million.
FedEx was not required to admit to any wrongdoing in agreeing to the $15.45 Million settlement. Be that as it may, FedEx responded to the settlement by altering its employment practices to comply with state and federal laws.
Case information was not available.