FedEx reaches $228 million “agreement in principle” with plaintiffs in California labour dispute

FedEx has announced that it has “reached an agreement in principle” with former and current workers in California with whom it has been engaged in a legal dispute over their employment status. The company classified the workers – who drove and handled package deliveries and collections for FedEx Ground Package Systems between 2000 and 2007 – as independent contractors. The workers, however, argued that they were employees, and therefore entitled to overtime payment and other benefits.

FedEx won the first round of the legal dispute but in August last year a federal appeals court found in favour of the drivers. FedEx initially plan to appeal the ruling, but then said on Friday (11 June) that it has agreed to settle for $228 million.

The company announced the news about settlement in a paragraph headed “Other Event”, tacked on to a statement which headlined its decision to “adopt mark-to-market pension accounting”.

In the statement the company noted: “FedEx Ground has reached an agreement in principle with the plaintiffs in the independent contractor litigation that is pending in the United States District Court for the Northern District of California to settle the matter for $228 million. The settlement is subject to court approval.”

The statement also quoted Christine P. Richards, executive vice president and general counsel of FedEx, as saying: “This settlement resolves claims dating back to 2000 that concern a model FedEx Ground no longer operates.”