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FedEx Freight | FedEx to settle driver lawsuits in 20 states for $240 million

To my knowledge FedEx expected everyone to go out and start a corporation if they wanted to keep their jobs. FedEx does not own the trucks and no longer issues the plates for them as part of the policy change in 2011. FedEx only provides the equipment necessary for the contract carrier to perform the duties as stated in the contract.

Yes, FedEx was forced to recognize the IC's as employees. But they weren't forced to buy out the equipment in the process. A courier isn't much good without a van to drive, and FedEx Ground doesn't own any. They lease their equipment, as well as their drivers, through incorporated businesses. So the misclassified drivers were given a choice: register a business and replate the truck, giving up on employee status to become self-employed, or sell to an existing business contracted with FedEx Ground and be an employee of that business.
 
FedEx in 2011 stopped working directly with independent contractors and now contracts with other businesses that employ drivers.
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There's more than one way to skin a cat, as they say (no animals were harmed in the making of that adage). I think that whole contractor thing is a scam myself. They guys do what the company tells them to do when they are told to do it. That should make them employees eligible for worker's comp, 1/2 of their SS paid, etc. Should that one have gone the whole race it would have spelled big losses for FedEx...OT, ex post facto comp claims and probably some things that I can't think of.
 
ABFer said:
There's more than one way to skin a cat, as they say (no animals were harmed in the making of that adage). I think that whole contractor thing is a scam myself. They guys do what the company tells them to do when they are told to do it. That should make them employees eligible for worker's comp, 1/2 of their SS paid, etc. Should that one have gone the whole race it would have spelled big losses for FedEx...OT, ex post facto comp claims and probably some things that I can't think of.
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Who decides what ground charges customers for services rendered? If it's fed ex then contractors should be viewed as employees of fed ex. If the contractor controls pricing then it's all good
 
LTLIndentured said:
Who decides what ground charges customers for services rendered? If it's fed ex then contractors should be viewed as employees of fed ex. If the contractor controls pricing then it's all good
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Your theory is flawed....if a contractor comes to your house and gives you an estimate for services rendered, do you just accept that price or do you negotiate a lower price?
With Ground, they negotiate both sides.
 
LTLIndentured said:
Who decides what ground charges customers for services rendered? If it's fed ex then contractors should be viewed as employees of fed ex. If the contractor controls pricing then it's all good
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So is an owner operator leased to a company or working for a broker an employee? The company sets the price and dictates it.
 
Ground sets the price, and they are hardly the only courier service that uses contractors. But they are definitely the largest.

A lot of you guys don't seem to understand how the contractor model works, so I'll explain it on a scale that makes it easier to understand. All of us here are familiar with UPS Freight. They are a unionized LTL carrier. Here in Canada, however, UPS Freight (and Overnite before them) contracts their services to a Canadian non-union carrier called Canada Cartage. UPS sets the prices to the customer, but they pay Canada Cartage to be their representative in the market. Canada Cartage, in turn, paints the trucks dedicated to the contract UPS brown, complete with logos, and the trailers are similarly UPS gray if they are not UPS' own trailers. Canada Cartage employees doing pickups and deliveries is these UPS-look trucks likewise wear a UPSF uniform.

Why is that done this way? Because UPS has no interest in the expensive process of expanding into the Canadian market and hiring employees. It's cheaper to contract the operation out to a local carrier willing to represent them. As part of the contract, UPS expects the contractor to represent UPS to the customer. As far as the customer is concerned, the truck that picks up the freight is a UPS truck, and the branding is important to UPS.

This does not make the Canada Cartage employees who represent UPS employees of UPS. They are paid by Canada Cartage, not UPS. And they are made fully aware that their job is to represent UPS to UPS' customers. The case is exactly the same with FedEx Ground after 2011, just on a smaller scale.
 
Canadian Flyer said:
Ground sets the price, and they are hardly the only courier service that uses contractors. But they are definitely the largest.

A lot of you guys don't seem to understand how the contractor model works, so I'll explain it on a scale that makes it easier to understand. All of us here are familiar with UPS Freight. They are a unionized LTL carrier. Here in Canada, however, UPS Freight (and Overnite before them) contracts their services to a Canadian non-union carrier called Canada Cartage. UPS sets the prices to the customer, but they pay Canada Cartage to be their representative in the market. Canada Cartage, in turn, paints the trucks dedicated to the contract UPS brown, complete with logos, and the trailers are similarly UPS gray if they are not UPS' own trailers. Canada Cartage employees doing pickups and deliveries is these UPS-look trucks likewise wear a UPSF uniform.

Why is that done this way? Because UPS has no interest in the expensive process of expanding into the Canadian market and hiring employees. It's cheaper to contract the operation out to a local carrier willing to represent them. As part of the contract, UPS expects the contractor to represent UPS to the customer. As far as the customer is concerned, the truck that picks up the freight is a UPS truck, and the branding is important to UPS.

This does not make the Canada Cartage employees who represent UPS employees of UPS. They are paid by Canada Cartage, not UPS. And they are made fully aware that their job is to represent UPS to UPS' customers. The case is exactly the same with FedEx Ground after 2011, just on a smaller scale.
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That isn't the same thing. A big company is contracting UPS freights freight. It is an independent company hiring drivers to haul freight. FedEx package is renting or selling package trucks and making contracts that are not negotiable. Wearing company uniforms and using company scanning machines and electronic signature devices. an employee disguised as a contractor. That's why FedEx keeps losing the suits in the United States
 
SAC75 said:
That isn't the same thing. A big company is contracting UPS freights freight. It is an independent company hiring drivers to haul freight. FedEx package is renting or selling package trucks and making contracts that are not negotiable. Wearing company uniforms and using company scanning machines and electronic signature devices. an employee disguised as a contractor. That's why FedEx keeps losing the suits in the United States
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With all due respect it is the same thing, the old ground model (which I always thought was a crappy deal) is gone. Ground contracts with companies to deliver their packages just like UPSF does the only real difference is UPSF contracts with one company and Ground contracts with many. The people delivering for Ground are employees of their respective companies, and their company has a contract with Fedex. The law suits Fedex lost were over the independent contractor model which they abandoned.
 
johndeere4020 said:
With all due respect it is the same thing, the old ground model (which I always thought was a crappy deal) is gone. Ground contracts with companies to deliver their packages just like UPSF does the only real difference is UPSF contracts with one company and Ground contracts with many. The people delivering for Ground are employees of their respective companies, and their company has a contract with Fedex. The law suits Fedex lost were over the independent contractor model which they abandoned.
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I agree with that. When i first started I almost bought one of those box trucks from them. Then I seen how little they actually made and decided against it.
 
SAC75 said:
That isn't the same thing. A big company is contracting UPS freights freight. It is an independent company hiring drivers to haul freight. FedEx package is renting or selling package trucks and making contracts that are not negotiable. Wearing company uniforms and using company scanning machines and electronic signature devices. an employee disguised as a contractor. That's why FedEx keeps losing the suits in the United States
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No. You're not getting it. The lawsuits predate a change in FedEx's policies regarding contracts. Before 2011, which is when the first lawsuit was filed, FedEx Ground allowed contracting with INDIVIDUALS who owned package cars. FedEx leased the vehicles and licenced them. This made the individual an employee who had a lease agreement with FedEx under the terms of the lawsuit.

As a result of the lawsuits, FedEx Ground CHANGED this policy and stopped signing contracts with individuals. They now only contract with incorporated businesses. Incorporated businesses are NOT individuals and are not covered by the lawsuits.

The incorporated business agrees to represent FedEx Ground via contract and supplies the vehicles and personnel. FedEx supplies uniforms and tracking technology, but do not own or license the vehicles and do not employ the drivers. It is literally EXACTLY THE SAME as the situation I described above. The size of the incorporated business is completely irrelevant to the discussion. ABC Corporation could be a one man operation with a single package car, but it doesn't matter because the contract is from one business to another business. As the owner/operator of the package car, you are the sole representative of your business. That makes you SELF-EMPLOYED, not an employee of FedEx Ground.

How do I know all of this? I was a contractor with FedEx Freight Canada, I was considering moving to Ground and know their contract structure, and I am STILL self-employed where I am now.
 
johndeere4020 said:
With all due respect it is the same thing, the old ground model (which I always thought was a crappy deal) is gone. Ground contracts with companies to deliver their packages just like UPSF does the only real difference is UPSF contracts with one company and Ground contracts with many. The people delivering for Ground are employees of their respective companies, and their company has a contract with Fedex. The law suits Fedex lost were over the independent contractor model which they abandoned.
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You beat me to it!
 
Canadian Flyer said:
No. You're not getting it. The lawsuits predate a change in FedEx's policies regarding contracts. Before 2011, which is when the first lawsuit was filed, FedEx Ground allowed contracting with INDIVIDUALS who owned package cars. FedEx leased the vehicles and licenced them. This made the individual an employee who had a lease agreement with FedEx under the terms of the lawsuit.

As a result of the lawsuits, FedEx Ground CHANGED this policy and stopped signing contracts with individuals. They now only contract with incorporated businesses. Incorporated businesses are NOT individuals and are not covered by the lawsuits.

The incorporated business agrees to represent FedEx Ground via contract and supplies the vehicles and personnel. FedEx supplies uniforms and tracking technology, but do not own or license the vehicles and do not employ the drivers. It is literally EXACTLY THE SAME as the situation I described above. The size of the incorporated business is completely irrelevant to the discussion. ABC Corporation could be a one man operation with a single package car, but it doesn't matter because the contract is from one business to another business. As the owner/operator of the package car, you are the sole representative of your business. That makes you SELF-EMPLOYED, not an employee of FedEx Ground.

How do I know all of this? I was a contractor with FedEx Freight Canada, I was considering moving to Ground and know their contract structure, and I am STILL self-employed where I am now.
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Ups freight still contracts individual owner-operators. There is a difference between what UPS freight was doing and what Fedex ground is doing or was doing. That's what I was getting at. I'm not saying that FedEx is still doing it wrong.
http://ltl.upsfreight.com/owneroperator/Qualifications.aspx
If it was illegal they (UPS)would not be doing it
 
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Canadian Flyer said:
No. You're not getting it. The lawsuits predate a change in FedEx's policies regarding contracts. Before 2011, which is when the first lawsuit was filed, FedEx Ground allowed contracting with INDIVIDUALS who owned package cars. FedEx leased the vehicles and licenced them. This made the individual an employee who had a lease agreement with FedEx under the terms of the lawsuit.
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I expect that it's just a shell game, a game of semantics. I wouldn't be the least bit surprised if a man in one of those trucks didn't own that truck and it be the only truck he owned. This is just another case of the working man getting the shaft. Does FedEx Ground own any of their own equipment?
 
ABFer said:
I expect that it's just a shell game, a game of semantics. I wouldn't be the least bit surprised if a man in one of those trucks didn't own that truck and it be the only truck he owned. This is just another case of the working man getting the shaft. Does FedEx Ground own any of their own equipment?
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All the trailers and dollies belong to Fedex if I'm not mistaken.
 
ABFer said:
I expect that it's just a shell game, a game of semantics. I wouldn't be the least bit surprised if a man in one of those trucks didn't own that truck and it be the only truck he owned. This is just another case of the working man getting the shaft. Does FedEx Ground own any of their own equipment?
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The trailers and dollies, yes. But they aren't driven, so they don't really count in this game of semantics.
 
SAC75 said:
Ups freight still contracts individual owner-operators. There is a difference between what UPS freight was doing and what Fedex ground is doing or was doing. That's what I was getting at. I'm not saying that FedEx is still doing it wrong.
http://ltl.upsfreight.com/owneroperator/Qualifications.aspx
If it was illegal they (UPS)would not be doing it
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You are correct. There is a difference between owner/operators and the way FXG was doing things. Owner/operators function many ways, and all involve business to business contracts.

The most common way is for the owner/operator's business to lease a tractor (and occasionally a trailer) to the carrier, with the understanding that the owner/operator's business operates the equipment on behalf of the carrier. This is convenient for both parties because it allows the carrier to shoulder responsibility for insurance, licenses and operating rights while the owner/driver handles mechanical and running costs. FedEx aimed for this with their original model, but didn't require the package car operators to have a business. This is what the lawsuit is about, the difference between a person and a business.

On the extreme opposite end is a completely independent carrier. This is a one man trucking company, where the owner covers all costs on their own. This model is where you own your truck 100%, and your only contract is for hauling freight. Only the law can tell you what to do here. FedEx's current model is closer to this, but not entirely this. FedEx expects their contract carrier to represent them in exchange for money and running rights. The package cars do not require running rights, so it's just representation for money. If you don't want to represent FedEx, they see no point in contracting with you because they want the customer to see the FedEx logo.
 
SAC75 said:
That isn't the same thing. A big company is contracting UPS freights freight. It is an independent company hiring drivers to haul freight. FedEx package is renting or selling package trucks and making contracts that are not negotiable. Wearing company uniforms and using company scanning machines and electronic signature devices. an employee disguised as a contractor. That's why FedEx keeps losing the suits in the United States
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Freddy has changed the way he disguises his indentured servitude model, you now have to be incorporated, therefore you are an employee of said corp.
 
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