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FedEx Home Delivery HR Model for Drivers. Wilmington, Mass, 32 contractors at 2 facilit. Recruitment Independent Contractors DOT driver requirements (e.g. license, drug screen) Operating Agreement - “take-it-or-leave it” drivers are ind. contractors

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FedEx Home Delivery HR Model for Drivers

  • Wilmington, Mass, 32 contractors at 2 facilit.

  • Recruitment

    • Independent Contractors

    • DOT driver requirements (e.g. license, drug screen)

  • Operating Agreement - “take-it-or-leave it”

    • drivers are ind. contractors

    • 14-Day FedEx Home Developed Training Prog.

    • FedEx Home may not determine breaks, hours, or routes taken

    • Must meet FedEx performance stds.


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Operating Agreement (cont.)

  • Wear Fed Ex Home Uniforms

  • Maintain personal appearance

  • Termination by driver or FedEx if business in area declines

  • Vehicles

    • Purchased (prices from $15-38,000)

    • Maintained by drivers

      • Normal operating maintenance and upkeep

      • DOT Standards for safety

      • FedEx Home standards for appearance and signage

    • Use

      • While delivering FedEx packages Tu-Sat as required), no other uses

      • May use vehicle for revenue when not on FedEx routes, 1 driver did so

  • Package Delivery

    • Service delivery area determined and may be changed by FedEx home

    • Must deliver all packages on truck scheduled for that day

    • Must permit FedEx Home management to ride with them from time to time

      • 2 all day service rides per year

      • Given packages but may deliver in order chosen

      • Deliveries based on customer contacts to FedEx Home, not drivers


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Operating Agreement (cont.)

  • Compensation 2005 – main elements

    • per stop

      • $1.29 regular

      • $6.50 per appointment

      • $2.75 evening

      • $.50 for signature

    • $.22 per package

    • $.20/mile between 201 and $400

    • No fringe benefits

    • Bonuses based on meeting Fed Ex performance goals

    • Total Gross Revenue

      • Median and Mode $60-$90,000

      • Range

        • High >$150,000

        • Low $3500


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Operating Agreement (cont.)

  • Purchase scanners and Business Support Package

  • Insurance partially provided by drivers through a preferred vendor

  • Time off

    • purchase time off through program and FedEx Home will assign a “swing contractor”

    • Hire someone to drive route if approved by Fed Ex Home

  • Multiple route drivers must hire other drivers who must be approved by FedEx Home

    • 3 of 32 drivers

  • Routes may be sold

    • Buyers must be acceptable to FedEx Home

    • Only 1 route sold


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RD Analysis

  • 6 Cases all found drivers ees

    • 3 Roadway cases

    • 3 FedEX Home cases

  • Bases for finding of ee status

    • All do business in name of FedEx Home rather than their own names

      • uniforms

      • Logos

      • Vehicle specifications

      • FedEx Home training

    • Non-Fed Ex work

      • Not while delivering for Fed Ex

      • During off hours but no drivers do so

        • Due to constraints of relationship with Fed Ex-


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RD Bases for finding of ee status (cont).

  • FedEx maintains substantial control over performance

    • Determines and can change service area

    • Establishes Tu-Sat schedule

    • Determines day of delivery

      • Constrains control over daily schedule and breaks

    • “take-it-or-leave-it” agreement

    • Rates of compensation established by Fed Ex Home

    • Bonuses tied to compliance with guidelines

    • Business support for drivers


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FedEX Home Delivery v. NLRBCA DC, 2009

  • Delivery drivers are independent contractors (IC’s) and therefore not covered by NLRA

    • Denies enforcement of NLRB finding of refusal to bargain

  • Reasoning

    • “Right of Control” test accepted since late 1960’s but definition of “control”is ambiguous

      • Criteria

        • Supervising performance?

        • Monitoring performance?

        • Improving performance?

      • Court looking for an objective, “bright line” test

    • Criteria for IC’s evolved

      • Significant entrepreneurial opportunity for gain or loss

      • May use trucks for own purposes if they mask FedEx logo

      • Fact that many contractors do not use trucks to earn income is less important than the fact that they may so use them

    • Other factors

      • May hire additional drivers

      • May operate multiple routes

      • May sell routes


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FedEX Home Delivery v. NLRBCA DC, 2009

  • Dissent

    • No evolution to entrepreneurial opportunity as the major factor

      • One factor among many

    • FedEx Home-created obstacles to use of ent. opportunity

    • Multi-factor analysis

    • RD correct


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Restatement of Agency

  • In determining whether one acting for another is a servant or an independent contractor, the following matters of fact, among others, are considered:

  • (a) the extent of control which, by the agreement, the master may exercise over the details of the work;

  • (b) whether or not the one employed is engaged in a distinct occupation or business;

  • (c) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision;

  • (d) the skill required in the particular occupation;

  • (e) whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work;

  • (f) the length of time for which the person is employed;

  • (g) the method of payment, whether by the time or by the job;

  • (h) whether or not the work is a part of the regular business of the employer;

  • (i) whether or not the parties believe they are creating the relation of master and servant; and

  • (j) whether the principal is or is not in business.


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