The Federal Express Contractor Cluster-Covfefe…Am I Using That Word Right?

Anyone who has followed the shenanigans at FedEx Ground and Home Delivery has been led to believe that FedEx has changed their ways. Gone in most states is the original Independent Contractor (IC) model they used while building their brand…replaced by the new and improved Independent Service Provider (ISP) model they claim will solve the shortcomings of the IC program.

But what Fred Smith and FedEx have really done is hornswoggle enough judges, lawyers, and state and federal agencies into believing they’ve changed. And while some things have changed, the ISP model still retains the same underlying flaws that poisoned the Independent Contractor well; the FedEx-contractor relationship is one of exclusivity, and FedEx just doesn’t pay contracted businesses enough for them to pay their drivers overtime or provide any kind of health insurance or paid time-off benefits. And that much control makes FedEx the 800 pound gorilla in the room, and they don’t hesitate to throw their weight around fast and free.

FedEx has led many to believe that in their fancy new ISP model, they have eliminated doing business with contractors and now they contract only with businesses who have their own employees. What does that mean and how did they accomplish this changeover from contractors to businesses? First in 2011, they announced that all contractors must be, if they weren’t already, an “S” corporation (no LLC corporations either) if they wished to continue contracting with FedEx…and vwehla!…FedEx creates their new business partners from the ashes of their previous contractors. Same contractors, just labeled differently for tax purposes. FedEx also mandates that these businesses are not permitted to use their own contractors to make deliveries…no 1099’s allowed!…W-2 employees only.

As FedEx was legislating into existence these new business partners, they also just happened to announce the daily service requirements these businesses would be expected to provide prior to ISP implementation. Businesses would be obligated to agree to service a minimum of 500 stops per day, roughly 3-4 routes per day. It didn’t take a mathematician to see the wave that was about to crash on the heads of the single route contractors. Some would have to go…and the longer a contractor who was unable or unwilling to meet FedEx requirements waited, the less his route could be worth in a potential sale. To make matters worse, if a contractor was unable to make a deal for his route, he was simply finished. FedEx took back the route and re-assigned it to another service provider with no break-up fee provided to the now former contractor.

As part of the new ISP model, FedEx allows future business partners the opportunity to negotiate the rates of their service. Which is to say, FedEx contests every part of any potential agreement, forcing the future service provider to pick what elements of the agreement to actually negotiate since there is no possible scenario where FedEx compromises on ALL obligations stated in the contract. In addition, a business owner in the new ISP model would be required to sign a clause that prohibits them from suing FedEx for possible future disputes that might arise from the ISP agreement. Simply, they covered their asses…a lesson learned from the highly litigated IC model.

FedEx recently announced to their business partners that as of 2021, they will be required to own both the Ground and Home Delivery services in the zip codes they contract to service. Once again, FedEx is interfering in how their partners businesses are run, just as in the past IC model. They’re forcing another wave of route consolidations which will only drive further the current wedge that exists between Home Delivery and Ground service providers (and their drivers). This time the stakes are higher however, and a service provider who is unable to accommodate such changes has much more to lose than pre-ISP consolidations.

This whole FedEx cluster-covfefe leads to one last question; how much longer do FedEx Express employee drivers have before FedEx decides to hand the express package delivery service over to its Independent Service Provider businesses?…They’ve already changed the Uniform and truck colors of Ground and Home Delivery to match those of their FedEx Express service.

Wanna bet they’re at least talking about it?…

Red Rover, Red Rover, Send New Lawyers Over!

I would like to take this opportunity to thank the attorneys at Leonard Carder LLP in California. It appears you did a fantastic job getting a fair and equitable settlement for your fellow residents of California. Well done. Unfortunately when it came to We the 12,000 contractors in the multi-state settlement, we were left with whatever scraps you and FedEx decided to which we were entitled. It’s fortunate that they didn’t offer us free cafe lattes at Java World first, otherwise I get the feeling we would all be drinking coffee free for the next year.

If I come off as ungrateful it’s because I am. Please don’t delude yourselves into thinking it’s just me not appreciating your talents and hard work, the woods are filled with more just like me! Some, more than willing to protest this misbegotten settlement; some, the silent majority (?) who hate the deal but need the money more; and some who no longer have a stake in the game, tired of the Purple Promise and after having left long ago are ecstatic to be getting money they never expected to be awarded.

I don’t pretend to be a legal expert, but I’ve watched Suits and Boston Legal often enough, read enough John Grisham, even saw the movie Erin Brockovich, twice! This settlement has nothing to do with the differences between California employment law vs. the rest of the country; it simply represents the sell-out of We the 12,000 non-California contractors who performed all of the same duties, wore all the same clothing, bought and paid for all the same equipment, worked all of the same uncompensated overtime, delivered all of the same packages, and showered and groomed every bit as well as they did. So how in the name of Sam Hill could our west coast brothers be entitled to $150-$200 per week more than the rest of us? It’s outrageous, aggregious, and preposterous! Was anyone actually doing the math? At $41.13 /week, that breaks down to $8/day or 75 cents/hour. That doesn’t even put the half in time and a half. What legal team would agree to such ridiculous amounts? Possibly a legal team whose interest at this point is only the collection of their fees and who are no longer willing to fight the good fight? Convinced in their own minds that these settlements are fair to all involved.

So where does that leave We the 12,000? For now I would say we were, “attached to another object by an inclined plane, wrapped helically around an axis.” But we may surprise ourselves yet. Maybe we can unite and make our objections heard, long and loud enough that the legal system that binds us will see this proposed settlement for what it really is, a pathetic attempt at paying off the masses for their silence. And if the legal system agrees and orders the two sides back to the table with new counsel for We the 12,000, I suggest this should be our own Artificial legal dream team;

  • Lead Chair-Saul Goodman who the other lawyers will hate because of his second-rate education, but won’t hesitate to get in the mud when it’s needed.
  • Second Chair-Daniel Caffey can finally get that set of steak knives he lost on A Few Good Men. 
  • Third Chair-Jake Brigance can say to Fred Smith and his hatchet men, “Now imagine, you’re a contractor.” And the whole courtroom will weep for our pain.
  • Fourth Chair-Harvey Specter who lives by the rule, “The success of the client is a success of yours.” He would never settle for $41.13/week. Why should we?

It’s not over unless we say it’s over.
Artificial

An Open Letter to Judge Robert L. Miller, Jr.

re: Willis v. FedEx Class Action Lawsuit

Your Honor,

Please, do not approve the proposed settlement in the Willis v. Federal Express class action lawsuit! I can’t speak for all of the members of this class action, but to allow FedEx off the hook after years of mis-classifying employees as contractors is a terrible miscarriage of justice.

The proposed settlement comes nowhere near re-paying We the Mis-Classified Employees of FedEx Ground for years of paying FedEx’s expenses. New trucks and maintenance, FedEx uniforms, scanners, customer complaints and claims (not always investigated) and employer taxes were all paid by us when FedEx should have been covering them as part of their own business model. As part of their model, drivers were also not paid for stops requiring a customer signature that went un-delivered because the customer was not available. How many thousands of stops do you think this represents? Unpaid stops legitimately attempted by the driver, yet unpaid by FedEx. I understand that the settlement was reached with FedEx claiming they did nothing wrong, but if you owned a business, why would you pay out hundreds of millions of dollars to thousands of people who couldn’t afford their own attorney, if you truly believed you did nothing wrong? Please, do not approve this deal.

FedEx has also led the public to believe that their new business model has changed and that they only do business with companies who have their own employees. This may be among the biggest hoaxes they’ve floated to date. Many of these so-called companies are the same contractors they used in their flawed contractor model. Their employees? In many cases are former single route drivers who can no longer afford to fulfill the FedEx Purple Promise. FedEx has ruled that there will be no more single route drivers and that these businesses must own a larger number of stops per day, forcing some single route drivers to give up their route prior to the implementation of the new FedEx ISP model, unable to meet FedEx’s new standard. There are only so many stops per day to go around, and since they will now be requiring owners to have a minimum of 500 per day, someone will have to go. And if what FedEx has claimed is true, that these former route drivers were businesses, then their actions have also not only driven down the price that these distressed single route drivers could expect to receive trying to sell off a route, but it was a way of forcing them out of what they (not me) would call, business. Why would these new employee based businesses pay top dollar for a route when they know that the distressed route owner has to sell to get out? Or why not just wait, if the driver is unable to sell, FedEx can just assign the route to the business that makes the most geographical sense. Again, I ask you, please do not approve this settlement.

The system that the administrators and FedEx used for calculating payments is also extremely suspect. They have calculated that if you worked 35 or more hours per week then you are entitled to a settlement of $41.13 for each of those weeks. This after having sent documents stating the rate was $65.83 per week. What business or legal entity would send a letter so grossly wrong to 12,000 people? Their needs to be some investigation into this type of incompetence. Having done this job since July 2001, I can tell you, if you only worked 35 hours in a week you were lucky. We switched to larger trucks around 2004 which meant that our hours of service had to include time spent loading our trucks. It’s my opinion that drivers actually worked closer to 45-50 hours per week, and during the busier peak season 60-70 hours or more. I will also tell you that many drivers did not include these hours when logging onto scanners in the morning for fear of violating their hours of service limitations. And FedEx managers knew it. I won’t say they openly suggested it, but when they signed off on daily settlements, they knew what the drivers were doing and what they were signing. Ask me about the snowy morning they closed the doors, refusing to let drivers leave until one of their late trailers was unloaded. What is that? Kidnapping? False Imprisonment? Please, do not give into corporate greed and send them back to the table.

I also have questions about the resources used to calculate these settlements. I started with FedEx in July of 2001 with a signed operating agreement. I drove full time and was dispatched from a terminal in Pennsylvania, just as the settlement requires. I still am . Yet in conversations with other drivers, most are being paid more than me, sometimes up to $10,000 more. If I meet all of the requirements, have been there longer than any other driver, why would others be receiving more in the settlement? As stated previously, I have no faith in the ability of FedEx to properly determine the correct settlement for time served. Are they only using hours based on scanner information, if so, we didn’t even have scanners when we started at FedEx. Where are they pulling their information from?? Who knows??? There has been no communication on this issue. Do I have to lawyer-up and subpoena the information from FedEx? 

Federal Express has employees they call Contractor Relations. Require Federal Express to use these employees and the law suit administrators, to sit down with each distressed driver and go over their individual numbers. To many of us it’s too important to just throw our hands up and say, “We’ll take it.” For many of us, this is our pension, this is the money we will use to pay off those credit cards still filled with charges related to years of driving for FedEx. A chance to get out of debt. Debt that not one single FedEx employee has had to incur while they drove for FedEx. And tragically, after living life week to week, this may also be all of the money they have ever been able to save while driving a FedEx route.

Your Honor, just to let you know how much we drivers really cared for FedEx customers, I’ve imageincluded a photo showing you how one resourceful driver did everything possible to keep a FedEx customer package dry from the weather and safe from those who might want to steal it. And they left a door tag. And FedEx probably charged that driver $280 (depending on the actual date this was done) for leaving the package at an improper location. See how they are? And the photo at the top? The customer failed to sign their artwork, so the driver was not allowed to leave the package according to FedEx policy. We deserve better for that kind of adherence to their rules and our courteous and careful service in crappy weather.

Please your honor, do not approve this deal. Doing so would be a miscarriage of justice and only serve to allow FedEx to get away with their charade.
Careful