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Certifiable: FedEx Drivers Independent Contractors or Employees?

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By Robyn Hagan Cain on July 17, 2012 4:25 PM

FedEx Ground (FedEx) provides small package pick-up and delivery services through a network of pick-up and delivery drivers. The drivers claim that they are employees, entitled to the perks -- like overtime pay and reimbursement of costs -- that the employer-employee relationship offers. FedEx claims that the drivers are contractors.

Last week, the Seventh Circuit Court of Appeals declined to resolve that question, instead certifying the independent contractor question to the Kansas Supreme Court, reports Bloomberg BNA.

You might be thinking, "I'm not a legal scholar, but I know that Kansas is in the Tenth Circuit." And you would be right.

Here, plaintiffs -- current and former drivers for FedEx who allege that they were employees rather than independent contractors -- sued FedEx in multiple states. The Judicial Panel on Multidistrict Litigation consolidated the actions and transferred them to an Indiana district court. That court used the Carlene M. Craig, et al. case, which was based on the Employee Retirement Income Security Act (ERISA) and Kansas law, as its "lead" case.

Cross summary judgment motions raised the question of whether the FedEx drivers are employees or independent contractors under the Kansas Wage Payment Act (KWPA). The district court ruled that the drivers were independent contractors, granted FedEx summary judgment and denied the plaintiffs summary judgment.

Since this appeal required an interpretation of the meaning of "employee" under the KWPA, the Seventh Circuit Court of Appeals decided that the Kansas Supreme Court "is in a better position than we to say what Kansas law is and should have the first opportunity to address the issues before us." Certification, according to the appellate court, would further the interests of cooperative federalism. (And who doesn't enjoy a healthy dose of federalism?)

The Seventh Circuit is staying appeals in 20 other FedEx driver lawsuits while waiting for the Kansas Supreme Court's response.

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