FedEx Drivers Get Return Trip to Trial Court in Missouri

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FedEx Corp. drivers will have to start over in a fight over their employee status in Missouri.

A federal appeals court said Friday that a trial judge should have let a jury decide whether the drivers were independent contractors rather than deciding on his own that they weren’t.

A jury awarded thousands of dollars in back benefits to the drivers in April 2014, after the federal judge determined their status. The U.S. Court of Appeals in St. Louis sent the case back to the trial court without deciding whether the drivers are contractors or employees.

“That issue is not before us,” the appeals court said. “There remains a genuine dispute as to whether plaintiffs were employees or independent contractors. That issue should have been submitted to the jury.”

Drivers throughout the country have filed claims against the company, which have been consolidated in a federal case in Indiana, leaving the question of whether FedEx drivers are independent contractors or employees broadly unsettled.

A federal appeals court in San Francisco concluded the drivers are employees, while an appeals court in Washington ruled they’re independent contractors. The consolidated case in Indiana “has come to mixed results under the relevant laws of dozens of states,” according to Friday’s opinion.

Business Model

The ruling gives FedEx a chance to defend anew a core component of its business model. The decision comes as some drivers for ride-sharing services Uber Technologies Inc. and Lyft Inc. are also fighting in court to be treated as employees rather than contractors.

FedEx drivers typically enter into one or two-year contracts with the company, provide their own trucks and are free to sell their routes, the appeals court said.

A jury needed to make fact determinations, including how much control the company had over the drivers, the duration of the employment, the conditions under which the contract could be terminated, and who provided the equipment to the driver, the panel said.

FedEx was pleased with the ruling and “confident” it will win the case allowing it to continue to classify drivers as independent contractors, Perry Colosimo, a company spokesman, said in an e-mailed statement.

“We remain committed to protecting a business model that has consistently provided customers with exceptional service, while enabling thousands of independent business owners, in Missouri and across the country, to own their own business,” Colosimo said.

John Toma, a lawyer for the drivers, didn’t immediately respond to a call seeking comment on the ruling.

The trial case is Gray v. FedEx Ground Package System, Inc., 4:06-cv-00422, U.S. District Court, Eastern District of Missouri (St. Louis). The appeal case is Gray v. FedEx Ground Package System, 14-3232, U.S. Court of Appeals for the Eighth Circuit.