FedEx Ground continues to enhance its successful business model in light
of shifting legal and regulatory developments in several states
Company Website:
http://www.fedex.com
MEMPHIS, Tenn. -- (Business Wire)
FedEx Ground, a subsidiary of FedEx Corporation, (NYSE: FDX) reports
today that a decision by a three-judge panel of the United States Court
of Appeals for the Ninth Circuit reversed previous rulings by the
District Court for the Northern District of Indiana in three class
action cases involving mostly former independent contractors for FedEx
Ground. The court held that those independent contractors operating in
California from 2000-2007 and Oregon from 1999-2009 were employees
according to the panel’s interpretation of state laws. The model that
the court reviewed is no longer in use. Since 2011, FedEx Ground has
only contracted with incorporated businesses, which treat their drivers
as their employees. FedEx Ground will seek review of these decisions,
including review by the entire Ninth Circuit.
“We fundamentally disagree with these rulings, which run counter to more
than 100 state and federal findings – including the U.S. Court of
Appeals for the D.C. Circuit – upholding our contractual relationships
with thousands of independent businesses,” said FedEx Ground Senior Vice
President and General Counsel Cary Blancett. “The operating agreement on
which these rulings are based has been significantly strengthened in
recent years, and we look forward to continuing to work with service
providers across our network to provide customers the industry’s most
reliable service.”
In light of legal and regulatory developments in several states, FedEx
Ground, a leader in cost-effective, small-package ground shipping, has
taken a number of steps in recent years to enhance its operating
agreements with the independent businesses that contract with the
company to provide transportation services. As the latest step in this
ongoing effort, FedEx Ground will transition to new independent service
provider (ISP) agreements in the states of California, Oregon,
Washington, and Nevada.
Currently, FedEx Ground contracts with more than 550 businesses that
provide pickup and delivery service in California. Those businesses
averaged nearly $500,000 in revenue last year, with nearly 50 of them
topping $1 million or more in earnings. In Oregon, more than 100
independent businesses provide services for FedEx Ground. More than
one-third of the businesses in these two states are minority or
female-owned.
“Small businesses are the foundation and growth engine of the U.S.
economy, and we are proud of our long-standing contractual relationship
with these service providers – each of which agrees to treat their
personnel as employees and to comply with all applicable federal and
state laws,” said FedEx Ground Vice President of Contractor Relations
Sean O’Connor. “We remain committed to maintaining a business model that
has been proven successful for our customers, service providers, and
shareowners.”
About FedEx Ground’s Independent Business Network
FedEx Ground contracts for transportation, pickup and delivery services
with more than 8,200 service providers in the United States and Canada
whose operations employ more than 32,500 people as drivers, managers,
helpers and staff. Those businesses generate more than $4 billion a year
in revenue and average nearly $450,000 in annual revenue per business.
About FedEx Ground
FedEx Ground, a part of FedEx Corp. (NYSE: FDX), is a leader in
cost-effective, small-package ground shipping, offering dependable
service to businesses and residential customers throughout the U.S. and
Canada. FedEx Ground is faster to more locations than its primary
competitor and includes FedEx Home Delivery for residential customers
and FedEx SmartPost specializing in the delivery of low-weight packages
from businesses to residential customers through a partnership with the
U.S. Postal Service®.
About FedEx Corp.
FedEx Corp. (NYSE: FDX) provides customers and businesses worldwide with
a broad portfolio of transportation, e-commerce and business services.
With annual revenues of $46 billion, the company offers integrated
business applications through operating companies competing collectively
and managed collaboratively, under the respected FedEx brand.
Consistently ranked among the world's most admired and trusted
employers, FedEx inspires its more than 300,000 team members to remain
"absolutely, positively" focused on safety, the highest ethical and
professional standards and the needs of their customers and communities.
For more information, visit news.fedex.com.
Contacts:
FedEx
Melissa Charbonneau, 901-434-5950
melissa.charbonneau@fedex.com
Source: FedEx Corp.
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