Summary: Ninth Circuit remands back cases to lower courts after ruling FedEx drivers should be classified as employees and not as independent contractors.
On Wednesday, the U.S. Court of Appeals for the Ninth Circuit reversed a finding in a multidistrict litigation in Indiana and found that the close to 2,700 plaintiffs in two federal district court cases had been wrongly classified as independent contractors.
According to the court, FedEx drivers fulfilled the requirements of the “right to control” test applicable to both California and Oregon, and are to be treated as employees for the purposes of classifying them.
The three-judge panel also commented that FedEx drivers were employees both under the “right-to-control,” and “economic-realities” tests and the fact that FedEx termed them as “independent contractors” in an operating agreement did not change their real status as employees of the company.
The Ninth Circuit also found that one of the classes lacked Article III standing to seek prospective relief and the other class’s claims for prospective relief became moot before the Multidistrict Litigation Court certified the class.
The consolidated appeal to the Ninth Circuit by FedEx drivers, in essence, claimed that FedEx improperly classifies its drivers as independent contractors, thereby forcing them to incur business expenses and depriving them of benefits otherwise owed to employees.
Between 2003 and 2009, similar cases had been filed against FedEx in approximately forty states. The Judicial Panel on Multidistrict Litigation consolidated those cases for multidistrict litigation proceedings in the District Court for the Northern District of Indiana. The plaintiffs in all the MDL cases moved for partial summary judgment seeking to establish their status as a matter of law.
The MDL Court denied nearly all of such motions and granted almost all cross-motions made by FedEx. The plaintiffs appealed in time challenging the MDL Court’s denial of their partial motions and blanket grant of summary judgments to FedEx.
The Ninth Circuit has remanded the matters back to lower courts, after holding they erred in not treating FedEx drivers as employees.