http://www.bloomberg.com/apps/news?pid=20601109&sid=aKKEUospuNr4&refer=newsBy Laurence Viele Davidson and David Mildenberg
Aug. 7 (Bloomberg) -- FedEx Corp. is speeding toward a collision inside an Indiana federal courthouse where drivers at the company's ground-delivery unit are demanding full-time status.
The court is weighing suits filed by 150 independent contract drivers who say they are treated as full-time employees and should be paid as such. Limiting the FedEx ground delivery unit's use of contractors may wreck its chances of gaining on larger rival United Parcel Service Inc. The unit helped FedEx take as much as 19 percent of the ground delivery market while UPS has fallen from 82 percent to 70 percent in the last decade.
Losing the battle could flatten the company's model of using workers who are self-employed and don't get benefits or paid time off. FedEx may have to buy as many as 15,000 drivers' trucks for $45,000 apiece. That $630 million bill could jump even higher if health care, pension costs and back pay are added.
``Treating any particular class of workers as independent contractors is, in many ways, an all-or-nothing proposition,'' said Carey Bartell, a labor lawyer at Reed Smith in Chicago. ``If you're right, you avoid certain expense and hassle. If you're wrong, however, you can lose big.''
The FedEx cases are before a federal judge in South Bend, Indiana, who will decide after a hearing later this month whether the claims of contractors from 29 states should be combined in a single lawsuit. If the suit goes forward, the court will decide if the law allows for making the jobs full time.
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