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Tuesday, September 9, 2014

Alexander v. FedEx Ground: Delivery Drivers Are Employees Under California Law "Right to Control" Test

In Alexander v. FedEx Ground Package System, Inc., ___ F. 3d. ___ (9th Cir. 8/27/14), individuals who drove delivery routes for FedEx Ground and FedEx Home (FedEx) in California sued for unpaid wages, reimbursement of business expenses, and violation of the Family and Medical Leave Act (FMLA), alleging that they were employees, rather than independent contractors. The case was consolidated with cases from a number of other states for multidistrict litigation (MDL) proceedings.

The MDL Court certified the expense reimbursement and unpaid wage claims, but not the FMLA claims. The parties then made cross-motions for summary judgment, asking the MDL Court to determine whether the drivers were employees or independent contractors as a matter of law. The MDL Court determined that the drivers were independent contractors as a matter of law in each state in which common-law agency principles govern employment status, including California.

The Ninth Circuit reversed, holding that the plaintiffs were employees as a matter of California law.

Under the test set forth in S.G. Borello & Sons, Inc. v. Department of Industrial Relations, 48 Cal.3d 341 (1989) (which the Court referred to as the "right to control test"), “The principal test of an employment relationship is whether the person to whom service is rendered has the right to control the manner and means of accomplishing the result desired.” Because FedEx exercised all "necessary control" over the drivers, including their appearance, the appearance of their vehicles, the timing of work and deliveries, the packages to be delivered and the service areas in which to deliver them, the right to control factor strongly favored deeming the plaintiffs to be employees. Slip op. at 14-26. The Court characterized this as "powerful evidence" of employee status.

The "secondary indicia" set forth in Borello did not strongly favor either employee or independent contractor status. Slip op. at 26-31.

The opinion is available here.

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