FedEx Ground and the IRS

[ATeam]

The lawsuits and IRS actions in the ongoing debate over the status of FedEx Ground drivers (are they contractors or employees?) is of some interest to expediters, as it has to do with independent contractor status, which most expediters are (or may not be, depending on one's point of view).

The issue has come up in the Open Forum a few times. Recent news about the dispute will be of interest to those who discussed the topic in the past.

Clearly, this is an unclear situation. (That insight is offered at no extra charge ). I guess the story was displaced by the election news. It seems strange that the IRS's withdrawl of a $319 million penalty was not widely reported and that so little information and discussion about was broadcast or published.

While the penalty withdrawl is positive for FedEx, it will be some time before the issue is resolved on the many levels in which it is in play. It could very well be resolved one way in one arena and conflicting way in a different arena. Time will tell.

 

[Crazynuff]

FedEX Ground has pretty much admitted single route owners are actually employees . It will no longer contract single routes . Single route owners have the choice of either buying additional routes or selling their route to another contractor . While doing research I saw an interesting business ad from central Florida with a 5 route FedEx Ground business for sale for $410,000 . I didn't know if it was permissible to put a link to the ad .
The IRS decision has no bearing on all the decisions made against FedEx Ground in several states . The contractors have a website that provides a lot of information .
FedEx Drivers Lawsuit

 

[ATeam]

Maybe that is how this issue will eventually be resolved in the future; the contractor/employee question will be answered by eliminating individual routes and requiring contractors to purchase and operate multiple routes. When someone is an employing or contracting with drivers to run multiple trucks, it would be hard to catagorize the truck owner as an employee, would it not?

Fines and penalties for any past bad acts the courts find can be paid and the company can move on. Cases where FedEx prevails against those seeking fines and penalties will end and the company can also move on.

Either way, I don't expect to see FedEx Ground go away. And in the long run, I don't expect to see FedEx Ground truck owners and drivers to become employees. I believe FedEx will adjust its practices to maintain an independent contractor relationship with FedEx Ground truck owners and drivers.

Any victories the union activists score in this dispute will be victories about past practices and have the effect not of converting FedEx Ground into an employee-driver company but changing it into a company where the contractor relationship is clear and established beyond the ability to contest.

It remains a total mystery to me why the IRS fine was withdrawn. I have seen no explaination from FedEx or the IRS.

Thank you, Crazynuff for the informative link.

 

[ericmoss37]

As a multi route owner at Fedex Home Delivery I can honestly say that solo's opperate in every state exception of California.

 

[ATeam]

To update this thread and keep the time line complete for readers who may refer to this thread in the future, here is the latest development:

"MEMPHIS, Tenn. – April 21, 2009 – FedEx Ground, a subsidiary of FedEx Corp., (NYSE: FDX), won a United States Court of Appeals for the D.C. Circuit decision today that said FedEx Ground independent contractors are independent business owners – not employees -- and are outside the jurisdiction of the National Labor Relations Board (NLRB). This decision validates the company’s long-standing position that FedEx Ground contractors are small business owners."

Full text of the FedEx statement

 

[OntarioVanMan]

I just wonder why no one has ever challenged the postal system and their contractors....schedules, must work 6 days a week perform tasks to a set standard, start at a certain time, finish by a certain time.....???