Another Court Disagrees with FedEx Classification of Drivers as Independent Contractors

Posted by Jeanine Gagliardi on Mon, 02/23/2015 - 16:27

We previously wrote about a decision by a U.S. Court of Appeals holding that FedEx misclassified its California drivers as independent contractors rather than employees. The decision surprised some because, when they signed on with FedEx, the drivers agreed that they were independent contractors.

The Kansas Supreme Court recently reached the same conclusion in a similar case. Like the federal court, the Kansas court was considering drivers’ claims that, because it improperly treated them as independent contractors rather than employees, FedEx failed to meet wage and leave requirements.

The standard applied by both the federal court and Kansas courts is known as a right to control test. Pursuant to it, where a principal retains the right to control the worker, the relationship is employer-employee rather than principal-independent contractor. To assess the degree of control, the federal court and Kansas courts weigh multiple factors. Although there is some variance among jurisdictions, factors typically include which of the parties provide necessary equipment, how the worker is paid, when and where the work is performed, and whether there are requirements for the worker to report to the principal.

The recent decisions are good reminders that, in every case, it is the applicable legal or regulatory criteria, not the parties’ agreement or characterization, that determines whether a worker is an independent contractor. In Maryland, the determination should begin here. For purposes of federal law, the process would begin with this website.

Any business that treats its workers as independent contractors faces the risk that there is a later claim, even one filed by a previously agreeable worker, that the classification is improper. Getting the classification wrong is costly, and the tests are complicated. For advice specific to your circumstance, feel free to contact us.

Call Today (301) 657-8184

 Google+  View Edward Sharkey's profile on LinkedIn