Are FedEx Drivers Employees?

Five days a week for 10 years, Agostino Scalercio left his house before 6 a.m., drove to a depot to pick up a truck, and worked a 10-hour shift delivering packages in San Diego. He first worked for Roadway Package System, a national delivery company whose founders included former United Parcel Service (UPS) managers, and continued driving trucks when FedEx (FDX) bought RPS in 1998. FedEx Ground assigned Scalercio a service area. The company, he says, had strict standards about delivery times, the drivers’ grooming, truck maintenance, and deadlines for handing in paperwork, and deducted money from his pay to cover the cost of his uniform, truck washings, and the scanner used to log shipments.FedEx Ground didn’t pay overtime or contribute to Scalercio’s Social Security benefits. That’s because since acquiring RPS and introducing its ground service, the FedEx unit has treated drivers as independent contractors, not employees. “The saying around the building was, ‘It’s their sandbox. We only get to play in it,’ ” says Scalercio, who no longer drives for FedEx Ground but is one of hundreds of current and former drivers suing the FedEx subsidiary, seeking back pay for overtime worked and for paycheck deductions. (The parent company is not a defendant.)Scalercio earned about $90,000 a year from FedEx, he says, but 40 percent to 60 percent of that was lost to deductions and truck expenses. Independent contractors have always been a part of FedEx’s ground business, and the company says that’s helped differentiate it from the competition. “The business model … has been highly successful and beneficial—to customers, contractors, and FedEx Ground,” the company said in a statement. (Drivers at UPS are employees and have a union.) But several recent court decisions have rejected FedEx Ground’s arguments that the drivers are contractors, which could stem a broader trend of U.S. companies treating more workers as contractors instead of employees.