On August 27, 2014, the Ninth Circuit Court of Appeals in California rejected FedEx’s argument that its drivers were independent contractors and concluded that they were in fact employees entitled to overtime pay and meal period benefits under California law. The Court ruled that a class of approximately 2,300 delivery drivers may proceed with their class claims and ordered the lower court to enter summary judgment for the plaintiffs on the question of employment status.
The controlling issue was whether the drivers were employees under California law which uses a “right-to-control” test to determine whether an individual is an employee or independent contractor. This can be outcome determinative in a claim is for unpaid overtime. The factors considered were the following:
(a) whether the one performing services is engaged in a distinct occupation or business; (b) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision; (c) the skill required in the particular occupation; (d) whether the principal or the worker supplies the instrumentalities, tools, and the place of work for the person doing the work; (e) the length of time for which the services are to be performed; (f) the method of payment, whether by the time or by the job; (g) whether or not the work is a part of the regular business of the principal; and (h) whether or not the parties believe they are creating the relationship of employer/employee.
Alexander v. FedEx Ground Package Sys., Inc., 12-17458, 2014 WL 4211107 (9th Cir. Aug. 27, 2014). The court relied on FedEx’s contracts which required the drivers to (1) wear FedEx uniforms; (2) drive FedEx-approved vehicles; (3) meet FedEx appearance standards; (4) deliver packages as directed by FedEx, including when, where and on what days; and (5) required Drivers to get FedEx’s consent to operate multiple delivery routes. In short, the drivers were “integrated into FedEx’s operation. The drivers look like FedEx employees, act like FedEx employees, [and] are paid like FedEx employees”.
In Illinois, Indiana and Wisconsin, when determining employment status the Seventh Circuit uses a similar test that looks at the following five factors:
- The amount of control the employer has over the employee, including supervision, direction, scheduling and performance;
- The nature of the work, and whether the required skills are learned on the job;
- Who is responsible for the costs of performing the work (like equipment, supplies, fees, etc.);
- How the employee is paid and whether he receives benefits; and
- The commitment and/or expectations of the job.
While Illinois Courts uses these five factors, the employer’s right to control the employee is the most important factor in making this determination.
Cases of misclassifying employees as independent contractors are on the rise and it is important to speak with an experienced lawyer to have your situation evaluated. If you believe that you may been misclassified as an independent contractor and are not receiving overtime when you work more than 40 hours a week you should contact the employment attorneys at Maduff & Maduff today.