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Attorney General Jack Conway Slaps FedEx with Employee Misclassification Lawsuit

September 22, 2010

In yesterday's blog, our Santa Ana employment lawyers discussed the recent news that FedEx will pay over $3 million to the Attorney General of Massachusetts, who accused the shipping company of failing to properly classify their drivers--leading FedEx to make smaller state payments in payroll, unemployment assistance, and workers' compensation.

In other recent news, the Attorney General of Kentucky, Jack Conway, is also accusing the shipping company of employee misclassification, contending that FedEx misclassifies its drivers to dodge paying taxes. Conway alleges in the lawsuit that FedEx wrongly classifies drivers as independent contractors, instead of employees, and that this misclassification unfairly denies the workers protections from wage and hour violations, workers' compensation insurance, and unemployment insurance.

Attorney General Conway's lawsuit asks the court to force FedEx into reclassifying the drivers as employees and not independent contractors. The lawsuit also seeks penalties if FedEx violates Kentucky's consumer-protection and unemployment-compensation statues, and if FedEx fails to remit withholding taxes from the drivers' paid wages.

According to the Courier-Journal, FedEx's strategy for classifying drivers as independent contractors has led to in-depth criticism and legal action, claiming that FedEx's employment strategy saves money by denying drivers their legally entitled employee benefits. FedEx reportedly has around 500 drivers in the state of Kentucky, and this suit is seeking back payments of at least $10 million that would go back to 2000.

Conway was also one of eight attorney generals from different states throughout the country who supported sending a letter to FedEx in 2009, stating concerns about employee classification issues. The letter, signed by all eight attorneys general, also offered to help FedEx make sure that their drivers were protected under state employment laws, and that FedEx, and not the taxpayers, would provide the drivers' legally entitled employment benefits.

If you, or someone you know in Orange County, California has suffered employee misclassification in the workplace, contact Howard Law, PC today for a free consultation about your employment rights.

Jack Conway Sues FedEx Over How it Classifies Drivers, The Courier-Journal, September 2, 2010

Rewards for Entrepreneur's Hard Work Could Dissolve 'Overnight," Journal Enterprise, September 12, 2010

Judge Rules in Favor of FedEx on Driver Status in Kansas, Trucking Info, August 24, 2010

FedEx Ground Wins Latest Court Challenge, Transport Topic News, August 30, 2010

FedEx Ground Drivers Will Appeal Adverse Decision Finding Kansas Drivers to be Independent Contractors, and not Employees; MDL Court Also Sends All Non-Class Cases Back to Their Home Courts, Stand Your Ground: The Official Website of the FedEx Ground/Home Delivery Drivers Nationwide Class Action Lawsuit

Related Web Resources:

U.S. Department of Labor: Wage and Hour Division (WHD), Fair Labor Standards Act (FLSA)

California Department of Industrial Relations (DIR): The Division of Labor Standards Enforcement