Court Holds Oregon FedEx Ground Drivers are Employees Not Independent Contractors

Beginning in October 2007, a handful of drivers for FedEx Ground Packaging System, Inc. (“FedEx”) and their lawyers at Stoll Berne began prosecuting two class actions alleging that FedEx treated its drivers as employees, but called them independent contractors to avoid paying overtime and other benefits that employees are entitled to under Oregon law.

FedEx contended its drivers were independent contractors under Oregon law.

As a central part of its business, FedEx contracts with drivers to deliver packages to its customers. The drivers must wear FedEx uniforms, drive FedEx-approved vehicles, and groom themselves according to FedEx’s appearance standards. FedEx tells its drivers what packages to deliver, on what days, and at what times.

Today, the Ninth Circuit federal appellate court held that plaintiffs in both class actions are employees as a matter of law under Oregon’s right-to-control and economic-realities tests.

Since the cases were filed in 2007, plaintiffs have faced years of contentious litigation.  Cases were filed across the country against FedEx alleging similar violations of other states’ laws.  All those cases, including the Oregon one, were transferred by the Judicial Panel for Multi-District Litigation to the federal district court for the Northern District of Indiana (“the MDL Court”) in early 2008.  In late 2010, the MDL Court found that the drivers were independent contractors as a matter of law and granted summary judgment in favor of FedEx Ground.  The Oregon cases were remanded back to the District Court of Oregon for further proceedings, and the various rulings in the case were appealed to the Ninth Circuit.

On August 27, 2014, the Ninth Circuit reversed both the MDL Court’s grant of summary judgment to FedEx and its denial of plaintiffs’ motion for partial summary judgment, finding that as a matter of law, the FedEx drivers were employees.  The Ninth Circuit is remanding the case to the District of Oregon trial court with instructions to enter summary judgment for plaintiffs on the question of employment status.  The case will then proceed to trial to determine the damages recoverable by the Oregon drivers.

Click here for the Ninth Circuit Court’s opinion.

The drivers are represented by Steve Larson and Mark Friel at Stoll Berne.

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