Labor & Employment Law Daily Lawsuit accuses FedEx of avoiding overtime obligations to drivers in New Mexico
Friday, October 16, 2020

Lawsuit accuses FedEx of avoiding overtime obligations to drivers in New Mexico

By Wayne D. Garris Jr., J.D.

The complaint accuses the delivery company of shifting from an independent contractor model to an “Independent Service Provider” model in order to continue to avoid its obligation under the state’s wage law.

On October 12, 2020, a New Mexico-based driver for FedEx filed a lawsuit accusing the delivery company of refusing to pay overtime wages to delivery drivers in the state. The proposed class action lawsuit seeks compensatory and liquidated damages for alleged violations of the New Mexico Minimum Wage Act.

“Independent Service Providers.” According to the complaint, FedEx previously hired drivers directly and classified them as independent contractors. However, after years of defending against misclassification claims, the company switched to an Independent Service Provider (”ISP”) model. Under the ISP model, the company employs its drivers through intermediary companies—a practice known as a “fissured workplace.”

Wage violations. FedEx is aware that its drivers work uncompensated overtime hours; however, the employee argues that the New Mexico law defines “employer” broadly and that FedEx cannot escape liability through the use of intermediaries.

Control. The complaint highlights FedEx’s significant control over its drivers, further illustrating its allegations that an employment relationship exists. Drivers deliver FedEx packages, wear FedEx uniforms, and drive vehicles with the FedEx logo affixed. Furthermore, drivers must adhere to the company’s procedures, as well as its strict pickup and delivery schedule.

Micromanagement. The complaint also alleges that the company micromanages drivers and that some of the micromanagement is carried out by FedEx managers. Drivers must have specific equipment in their trucks and must deliver packages at specified times. FedEx also monitors each driver’s performance and can dictate to its ISPs when to terminate a driver.

No overtime. Drivers regularly worked over 40 hours per week, according to the complaint; however, they were paid fixed day rates with no overtime compensation. The employee alleges that during the last three years of his employment, he worked an average of 12-18 hours per day and six days per week but was not paid overtime.

The case, Martinez v. FedEx Ground Package System, Inc., was filed in the United States District Court for the District of New Mexico. The case is No. 1:20-cv-01052.

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