FedX

FedExCourier said:

BTW, FedEx is a great company to work for and I'm a proud delivery driver who has worked for the company for 29 years. I'm still getting a pension which is more than I can say for most of the corporations out there. Also, my company will be providing my health insurance when I retire in Nov. for a much more reasonable rate than Obamacare. I work at a great station and there are many more happy employees out there. I appreciate my corporation and all it has provided for me.

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Just curious -- do you know if FedEx has a "tiered" system where new hires are getting a much worse deal than the old-timers? This is an increasingly common thing out there, and *if* that is the case, well, it would stand to reason that someone who is under the "old rules" would feel like they are getting a great deal and that it's a great place to work. (Again, I'm not saying this is the case, but wondering if it is. I know several workplaces like this where the overall compensation can be cut dramatically if you were hired in one day too late. In those shops, someone who has been there for X years may get $60K plus Cadillac health insurance and a DB pension, and someone who has been there for X-1 years doing essentially the same work may get $35K, watered down health insurance, less vacation time and a 401K.)

target2019 said:

The determination of whether contractor or employee is dependent on Behavioral, Financial and Type of Relationship factors. I know from my own experience that things can go awry for the large corp. employer when they avoid their fair share of social security and medicare tax. I'm surprised I don't see the IRS mentioned in these articles.

There are other facts missing from these stories. For instance, it seems the drivers must own or lease the truck. I'd like to see the truck and how it is configured. Is it supplied by Fedex? Do the independent contractors have just one customer? Is every driver for Fedex an independent contractor?

What is most interesting is how different the various courts interpret this lawsuit.

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It is my understanding that the contractor supplies a truck with specs dictated by FedX and paints it with their copyrighted logo & look.


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target2019 said:

The determination of whether contractor or employee is dependent on Behavioral, Financial and Type of Relationship factors. I know from my own experience that things can go awry for the large corp. employer when they avoid their fair share of social security and medicare tax. I'm surprised I don't see the IRS mentioned in these articles.

There are other facts missing from these stories. For instance, it seems the drivers must own or lease the truck. I'd like to see the truck and how it is configured. Is it supplied by Fedex? Do the independent contractors have just one customer? Is every driver for Fedex an independent contractor?

What is most interesting is how different the various courts interpret this lawsuit.

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The IRS and several states have gone after FDX for this contractor scam before.
This is not a new issue for FDX. They have spent big money in the courts and in fines.

FDX has been spending big money for years lobbying politicians to get their way.
It would appear that Fred Smiths lobbying luck has ended out west.

The FDX ground routes are owned by individuals who have 1 year renewable contracts who use drivers that FDX HR
hires. Most route owners own many routes and they service many customers in defined areas.
The route owners buy their trucks and pay all costs.

So the FDX ground driver who delivers a package to your house or business doesn't own anything. He wears a FDX uniform and works just like a FDX express driver but he is somehow labeled a "independent contractor". The FDX home delivery drivers have the same setup.

There is conflict at FDX ground now because the route owners that only own 1 or 2 routes are getting pushed out now by FDX.

ziggy29 said:

Just curious -- do you know if FedEx has a "tiered" system where new hires are getting a much worse deal than the old-timers? This is an increasingly common thing out there, and *if* that is the case, well, it would stand to reason that someone who is under the "old rules" would feel like they are getting a great deal and that it's a great place to work. (Again, I'm not saying this is the case, but wondering if it is. I know several workplaces like this where the overall compensation can be cut dramatically if you were hired in one day too late. In those shops, someone who has been there for X years may get $60K plus Cadillac health insurance and a DB pension, and someone who has been there for X-1 years doing essentially the same work may get $35K, watered down health insurance, less vacation time and a 401K.)

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Yes the new Express guys are getting screwed. Its the race to the bottom.

And if I am a FDX retiree I wouldn't count on FDX to keep their promises on retiree benefits.

Hate to be so negative but this is the Corporate America we now live in.

Great for investors. Bad for your neighbor who works for FDX.

Brat said:

It is my understanding that the contractor supplies a truck with specs dictated by FedX and paints it with their copyrighted logo & look.


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Just read the entire ruling.
http://www.leonardcarder.com/news/75-1 Opinion and Order.pdf
The contractor leases the truck with FedEx assistance. It's unlikely that someone would previously own such a truck outfitted with the exact specs that are mentioned in the opinion.
The opinion is well referenced, and was interesting to read. I'm aware of the issues because I was involved in something similar where the IRS went after a well known manufacturer for non payment of taxes. Wherever this gets debated or litigated, the outcome depends on employer control. That is pervasive in this matter, as best I can tell.

US DOL wage & hour obligations will be the least of their liabilities. IRS & state taxing authorities will be the largest IMHO.

FedX will doubtless appeal all the way to the top.


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Now that I have read the opinion FedX's overtime liability may in fact be substantial.. they worked between 9.5 and 11 hours a day. In California there is daily overtime.

Unwinding this just for the State of California will be costly.. even ignoring penalty provisions found in the various statutes.

The decision about the employment relationship was based on California law which is not dis-similar to many other state laws. FedX needs to negotiate a settlement.

If it walks like a duck and quacks like a duck.... sometimes it is a duck and no lawyer is good enough to change that...


They are fighting it because they do not want to pay taxes, workman's comp, unemployment and benefits.... I do bet overtime is also a big item... it is always interesting to see a company change their mind on how much someone should work really quick when they have to pay them by the hour and also overtime.... usually those 60 and 70 hours they insisted you put in becomes 40 without any exception or you will get into trouble...

Texas Proud said:

... it is always interesting to see a company change their mind on how much someone should work really quick when they have to pay them by the hour and also overtime.... usually those 60 and 70 hours they insisted you put in becomes 40 without any exception or you will get into trouble...

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Depends on the benefit structure. At Mega-Corp, the cost of benefits for hourly employees were pretty close to half their pay. So paying time-and-a-half was not much more expensive than straight time, as those benefits were fixed amounts. Compared to the extra effort of hiring/staffing more people, steady overtime was actually preferred.

-ERD50

Exactly which is why OT is no longer the incentive to hire employees. When the FLSA was passed fringe benefits were rare, it was wage controls during WWII where fringe benefits were exempt that brought about those packages.

The law is the law even if in many circumstances it doesn't operate as intended. What kills employers is an unfunded liability.


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A new hire gets the same health insurance as the old timers at the same price we all pay. All couriers are on a tiered system and yes it has changed since I began working for the company. We topped out at a much shorter window than the new hires but they will make a much higher salary than me when it comes time for them to retire. I guess I don't look at corporations as the evil empire.

This is not a matter of looking at corporations as the evil empire. This is a matter of holding corporations to the same statutory standard. The lawmakers and courts do not care, in the strict sense, whether or not the employment relationship or contract is 'fair'. They must look at the facts and apply the law.

As I look at the cases filed against FedX as they relate to delivery drivers many of them feel that FedX is violating Federal and various state laws. The 'government' did not initiate a 'shakedown'. Those statutes were not drafted recently, they are long standing. I am confident that FedX and their attorneys knew the knife edge they were walking. Shame on them if they haven't set aside sufficient reserves to address their liabilities, pity the poor stockholder if they haven't.

FedExCourier said:

A new hire gets the same health insurance as the old timers at the same price we all pay. All couriers are on a tiered system and yes it has changed since I began working for the company. We topped out at a much shorter window than the new hires but they will make a much higher salary than me when it comes time for them to retire. I guess I don't look at corporations as the evil empire.

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FDX has reduced pay and benefits and pension for all their Express drivers.

FDX ground is the real money maker at FDX now and the FDX Express division is much more expensive to operate.

With the contractor scam its no wonder that FDX ground is so profitable.