Posted on 10/21/2009 2:47:30 AM PDT by iowamark
NEW YORK (Reuters) – Three U.S. states said on Tuesday they plan to sue FedEx Corp, accusing the second-largest U.S. package delivery company of violating labor laws by illegally classifying drivers as independent contractors rather than employees to save money.
The attorneys general of New York, New Jersey and Montana intend to begin litigation against FedEx Ground Package System Inc after October 27, saying the unit of Memphis, Tennessee-based FedEx has caused a "serious injustiice."...
Anne Milgram and Steve Bullock, the attorneys general of New Jersey and Montana, joined Cuomo in the litigation threat.
In a statement, FedEx said it plans to continue talks with the attorneys general about the matter, but will "vigorously defend the right of FedEx Ground independent contractors to own and operate their businesses" if a lawsuit is filed.
The company has long battled critics including the Teamsters labor union and has faced some lawsuits over its worker classification practices. It has said FedEx Ground drivers can run their own businesses as they wish.
FedEx Ground is based in Moon Township, Pennsylvania, near Pittsburgh.
The states said they intend to seek restitution, damages and civil penalties. They gave FedEx until October 27 to show why a lawsuit should not be filed.
FedEx shares rose $1.59, or 2 percent, to $81.58 on the New York Stock Exchange after hitting $81.83 -- the highest level since September 2008.
(Excerpt) Read more at news.yahoo.com ...
FedEx: Through the Looking Glass
Kevin L. Kearns
The United States Business and Industry Council
Wednesday, June 17, 2009
http://americaneconomicalert.org/view_art.asp?Prod_ID=3256
FedEx is in big “do-do.”
Over the years the government has consistently tightened the restrictions on claiming that an associate or worker is an independent contractor. I know, For many years I have fought this battle and watched each year begin with even more stringent hurdles to claim that a worker is an independent contractor.
For starters, go to IRS.gov and do a search on independent contractors. You will soon learn that it is almost impossible to claim that status if you have any control over them what-so-ever other than stipulating the job to be done and when it is to be completed. If you have any control other than that, that person is an employee.
Other rules apply such as the individual must be “at risk” and is 100% liable for any financial losses involved in his business. Another rule is that the individual must work for other clients. If they earn over 80% of their income from you...they are considered an employee.
Now, the worst part of the deal. If you supply tools, equipment, vehicles, supplies, and most of the other things that normally will be used in your business free of charge, the individual is an employee.
Furthermore, if you exhibit control of the individual’s daily work schedule or means of work, they are an employee.
There are many other things involved and each year the regulations tighten even more.
Do a search on the internet for the determination of an employee verses a contractor.
I’m no fan of unions but FedEx is wrong in this case.
If FedEx can call these guys independent contractors then just about any employee anywhere could be one also. Have to actually agree with the government on this one.
“Dem war on FedEx”
Well they do take business away from the UNITED STATES POSTAL SERVICE but that could not be a the root of this, could it?
violating labor laws by illegally classifying drivers as independent contractors rather than employees to save money
Around here the postal workers who deliever the mail to our mail box are all classifyed independent contractors they bid on routes its ok for the government to do it but not FedEx?
By the rules crafted by the government, the government may be right.
I’m certain that this government intervention will lead to better service at lower costs, though, like every other time the government intervenes.
Anne Milgram and Steve Bullock, the attorneys general of New Jersey and Montana, joined Cuomo in the litigation threat.
IANAL, nor am I a Constitutional scholar, however in my view this sounds like an illegal "compact" between the states of New York, New Jersey and Montana. Such compacts are prohibited by Article I of the Constitution:
"No State shall, without the Consent of Congress ... enter into any Agreement or Compact with another State..."
Constitution? What is a constitution? Do you think anyone in government cares whether we have one or not?
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