FedEx Agrees to $2.1 Million Settlement in NY Underpayment Suit

On December 20, 2018, FedEx Corporation (“FedEx”) agreed to a $2.1 million settlement in a 2010 suit brought by the New York attorney general alleging that hundreds of FedEx workers were underpaid as a result of being misclassified as independent contractors.

As independent contractors, approximately 500 delivery drivers were denied overtime pay and had illegal deductions taken from their paychecks. According to Attorney General Barbara Underwood (“Underwood”), “Companies cannot misclassify employees in order to dodge their legal obligations – period…We will continue to hold accountable employers who fail to pay workers the wages they’re owed under the law.”

FedEx was also accused of violating New York state law in failing to pay workers extra for working long or split shifts, and neglecting to comply with New York wage statement and recordkeeping policies.

A FedEx representative commented that company is “pleased to put behind us a matter involving a contract that has not been in use for many years. FedEx continues to strengthen its contractual relationships with thousands of independent businesses provided outstanding service to customers.” The settlement does not require the shipping company to admit to wrongdoing.

The settlement fund will be distributed among workers who were denied overtime and who had illegal deductions taken from their paychecks. The overtime class consists of current and former fulltime FedEx Ground and Home drivers who contracted after August 2005 and worked before September 2016. The deduction class is comprised of current and former FedEx employees who contracted between October 2007 and September 2009 and worked for FedEx Ground before September 2016.

As per the agreement, class members will be paid according to the “dates and duration” of their contracts, the amount of hours and weeks they worked, and other relevant factors. All “deduction” class members will receive at least $250.

The legal team at Shepherd, Finkelman, Miller & Shah, LLP (“SFMS”) has significant experience litigating class action and employment matters.  If you have any questions regarding this subject or this posting, please contact Nick Lussier or Chiharu Sekino.  We can also be reached toll-free at (866) 540-5505.

SFMS is a nationwide law firm with offices in California, Connecticut, Florida, New Jersey, New York, and Pennsylvania.  SFMS is an active member of Integrated Advisory Group (www.iaginternational.org), which provides us with the ability to provide our clients with access to excellent legal and accounting resources throughout the globe.  For more information contact us online.