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Local Attorney Fixes FedEx


FedEx agrees to pay $27 million independent contractor judgement

by Sun Staff Reports   

Alameda Sun, 18 December 2008

FedEx Ground/Home Delivery has ended a nearly decade-long, landmark legal battle by agreeing to a $27 million court judgment that includes payment of $14.5 million to 203 California drivers whom the defendants in the case said the company misclassified as independent contractors.

FedEx Ground/Home Delivery has ended a nearly decade-long, landmark legal battle by agreeing to a $27 million court judgment that includes payment of $14.5 million to 203 California drivers whom the defendants in the case said the company misclassified as independent contractors.

In addition to the $14.5 million judgment, the court ordered FedEx to pay $12.5 million in attorney fees and most court costs of the case that was the first to challenge and eventually expose the shipping giant's independent contractor scheme. Final court approval of the stipulated judgment is expected soon.

The case of Estrada vs. FedEx Ground Package System, Inc. went to trial before now-retired California Superior Court Judge Howard Schwab in 2004. Schwab ruled that the drivers were legally employees and entitled to be reimbursed for all the expenses they were illegally required to pay by the company.

Fed Ex appealed Schwab's decision and in August 2007, the California Court of Appeals affirmed his judgment, agreeing that the drivers were employees and doubled the damages awarded to the drivers.

That decision sparked nationwide litigation against many large corporations that have misused the independent contractor concept to the detriment of American workers and the US Treasury, which has lost billions in unpaid payroll taxes. Approximately 27,000 FedEx drivers nationwide have a multi-district lawsuit against the company for misclassification pending in South Bend, Indiana. As in the California Estrada case, the drivers are asking the court to find that FedEx treats them like employees and rule that they are entitled to the same legal rights of employees.

Lynn Rossman Faris, Esq., of Leonard Carder, LLP, hailed the ruling. "FedEx has claimed for several years that it would eventually win on appeal. That fantasy is finally over," she said in a prepared statement. Faris served as lead counsel for the California drivers. She also co-led the nationwide class action lawsuit.

Faris' name should be familiar to Alamedans. She serves as president of the Alameda Civic Light Opera.

According to Faris, the 203 drivers will receive damages ranging from $2,000 up to $280,000, with an average recovery of about $70,000.

"If the 27,000 FedEx drivers in our nationwide case achieve similar results, FedEx could be facing a multi-billion dollar judgment, she said. Faris credited of the incredible strength and fortitude of drivers Tony Estrada and Jeff Morgan, who originally brought the suit. "They are the unsung American hard-working heroes who simply would not accept injustice and unfairness by this huge corporation," Faris said.