Alexander v. Fedex Ground Package System, Inc

Facts

Ps represent a class of 2300 individuals who were full-time delivery drivers for D in California between 2000 and 2007. Ps worked for D's two operating divisions, FedEx Ground and FedEx Home Delivery. FedEx Ground deals primarily with business-to-business deliveries, while FedEx Home Delivery deals primarily with residential deliveries. D claims its drivers as independent contractors. Ps and D have an Operating Agreement that defines their relationship. It states that the manner and means of reaching the desired results are within the discretion of the driver and that no officer or employee of D … shall have the authority to impose any term or condition on the driver … which is contrary to this understanding. No officer, agent or employee of FedEx … shall have the authority to prescribe hours of work, whether or when the [driver] is to take breaks, what route the [driver] is to follow, or other details of performance. Each P is assigned a Primary Service Area. Packages assigned for delivery to that area must be delivered that day. After each delivery, drivers must use an electronic scanner to send data about the delivery to D. D does not require drivers to follow specific delivery routes. D tells its managers to design and recommend to its drivers routes that will “reduce travel time” and “minimize expenses and maximize earnings and service.” D structures drivers' workloads to ensure that they work between 9.5 and 11 hours every working day. If a driver's manager determines that the driver has more work than he or she “can reasonably be expected to handle” in a 9.5 to 11-hour day, the manager may reassign part of the driver's workload to other drivers. Drivers are paid per-day and per-stop. They are not supposed to leave the terminal until all of their packages are available for pick-up. D managers make sure that drivers properly fill out their paperwork and prepare their packages for delivery. If drivers want their trucks loaded by D's package-handlers, they must leave their trucks at the terminal overnight. D has the authority to “reconfigure” a driver's service area upon five days' written notice. Should a driver's service area be reconfigured in such a way that P gains customers, D may reduce that driver's pay to compensate other drivers who lost customers in the reconfiguration. The agreement requires drivers to conduct themselves “with integrity and honesty, in a professional manner, and with proper decorum at all times.” D's managers may conduct up to four ride-along performance evaluations each year. Drivers to operate more than one vehicle and route, but only “with the consent of D” and only if “consistent with the capacity of the [driver's] terminal.” Third-party helpers must be “fully trained” and must “conform fully” with the agreement. Vehicles used must bear the markings of D. Drivers must provide maintenance at their own expense and must “bear all costs and expenses incidental to operation” of the vehicle. Drivers authorize D to pay for vehicle licensing, taxes, and fees, and to deduct these costs from the drivers' pay. Vehicles “in the service of D,” must be used “exclusively for the carriage of the goods of D … and for no other purpose.” Drivers may use their vehicles “for other commercial or personal purposes when [they are] not in the service of FedEx,” but only if all “identifying numbers, marks, logos, and insignia” are removed or covered up. Drivers have specific uniforms, scanners, and other necessary equipment that is required. D deducts the cost of the equipment from drivers' pay. There is no second source for the scanners used by D. Drivers must be “clean-shaven, hair neat and trimmed, free of body odor.” Managers may refuse to let drivers work if they are improperly dressed or groomed. Ps claim they are employees of D. Such cases were filed against D in approximately forty states. Ps moved for partial summary judgment, seeking to establish their status as employees as a matter of law. Almost all the courts involved held that Ps were independent contractors as a matter of law in each state where employment status is governed by common-law agency principles. Ps appealed. 

Issues

Rule of Law

Holding and Decision

Legal Analysis

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