FedEx Says Its Drivers Are Classified Correctly

FedEx Corp. Chief Executive Frederick Smith he is confident the company’s FedEx Ground unit drivers are correctly classified and that the division remains “fundamentally strong” in the face of adverse court rulings.

“We continue to believe that FedEx Ground's owner-operators are properly classified, and the business remains fundamentally strong,” Smith said in a statement. “It is business as usual at FedEx Ground.”

The Internal Revenue Service recently assessed FedEx back taxes and penalties of $319 million for the year 2002 after an audit determined that company drivers should have been classified as employees.

In a Dec. 21 filing with the U.S. Securities and Exchange Commission, FedEx said it was also told by the IRS that “similar issues” are under audit for 2004, 2005 and 2006.

FedEx, ranked No. 2 on the Transport Topics 100 listing of U.S. and Canadian for-hire carriers, said it plans to appeal the ruling.