FedEx Ground Settles Overtime Case With Oregon Drivers for $15.45 Million
A judge has approved a settlement that requires FedEx Ground Package System Inc. to pay $15.45 million to a class of drivers that worked in Oregon and sued to receive unpaid overtime wages.
The deal, finalized Oct. 21, put an end to three class-action lawsuits filed 10 years ago in U.S. District Court in Portland, Oregon. The seven named plaintiffs in the cases alleged that FedEx Ground misclassified them and others as independent contractors instead of employees, resulting in illegal deductions from paychecks and unpaid overtime. The drivers initially lost in district court, but the 9th Circuit Court of Appeals ruled that they were employees, not independent contractors, and sent the case back to the lower court.
“The loss at the trial court level was painful, but we were very happy to be successful at the appellate level. Because of that, we were able to negotiate a settlement that the class members are very pleased about. We’ve received nothing but positive reviews about it from the drivers,” said Steve Larson, lead attorney for the plaintiffs.
The drivers alleged in the lawsuit that FedEx Ground illegally deducted business expenses, such as the scanners that they use to track packages, but couldn’t do so without the consent of the drivers since they were employees. He added that FedEx illegally withheld overtime pay for some of the drivers because of the misclassification.
The settlement covers full-time pickup-and-delivery drivers who entered into operating agreements with FedEx Ground or FedEx Home Delivery between July, 20, 1999, and Sept. 18, 2015, and worked at a terminal in Oregon. Drivers who worked more than 35 hours per week could receive about $128 per week for the illegal deductions. Drivers who drove vehicles smaller than 10,000 pounds and worked more than 40 hours per week would receive an additional $147 per week for overtime.
“This approval order is yet another procedural step toward resolving a matter related to a contract that has not been in use at FedEx Ground for some time. FedEx Ground has made enhancements to its business in anticipation of rapidly changing competitive, legal and regulatory conditions,” spokesman Perry Colosimo said.
The settlement covers 397 drivers or companies, of which 362 filed for claims with the court.
In June, FedEx Ground agreed to pay $240 million to settle a lawsuit in which 12,000 truck drivers in 20 states said they were misclassified as independent contractors rather than employees of the division of FedEx Corp. The Oregon case involved one of six states not covered under the earlier settlement.
FedEx ranks No. 2 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers.
