Ninth Circuit Decisions in California and Oregon
September 5, 2014
The Ninth Circuit recently issued opinions deeming FedEx contractors to be employees as a matter of law for purposes of various California and Oregon wage and hour laws. These decisions come on the heel of and mirror the conclusion the Ninth Circuit recently reached in a similar case involving last-mile home delivery contractors in California, Ruiz v. Affinity Logistics Corporation.
These decisions deal at least a temporary blow to what should represent a sound independent contractor model. This is evident given that the Ninth Circuit rejected the import of evidence demonstrating the contractors in all three cases could (and did) hire multiple drivers and helpers to perform the work the contractors agreed to complete.
These decisions overturn the conclusions reached by the district court in the multidistrict litigation pending against FedEx as to the California and Oregon classes of FedEx contractors. In each instance, the court applied the multi-factor common law “right of control” test. Almost entirely relying on analysis of the control factor alone, the court found the independent contractor operating agreement the contractors entered and various FedEx policies and procedures “unambiguously allow FedEx to exercise a great deal of control over the manner in which its drivers do their jobs.”
In reaching this conclusion, the Ninth Circuit ignored scores of controlling and persuasive precedent deeming evidence of “control” stemming from third-party demands and/or safety concerns largely irrelevant to a determination of independent contractor status. The Ninth Circuit also found it persuasive that FedEx (not contractors) negotiates directly with its customers with respect to delivery windows and pricing. Finally, as noted above, the court took little interest in the fact that the contractors at issue operated multiple routes and could (and in many cases did) hire replacement and additional drivers to perform the work the contractors agreed to complete.
The court also made short work of the remaining factors, consistently coming back to the conclusion the “control” the operating agreement allowed FedEx to exercise over “significant aspects of the drivers’ day-to-day jobs” rendered any evidence favoring independent contractor status “to be of minute consequence.”
CLICK HERE to view Alexander v. FedEx Ground Package System Inc., Nos. 12-17458, 12-17509 (9th Cir. Aug 27, 2014)
CLICK HERE to view Slayman v. FedEx Ground Package System Inc., Nos. 12-35525, 12-35559 (9th Cir. Aug. 27, 2014)