Dive Brief:
- FedEx has agreed to settle driver misclassification class action lawsuits for a total of $227 million, Indianapolis Business Journal reported.
- The drivers alleged under compensation as a result of being considered contractors instead of full-time workers, and the District Court for the Northern District of Indiana granted final approval of the settlements.
- Payouts to the 12,627 driver-plaintiffs residing in Indiana and 18 other states range from $250 to more than $116,000. In total, FedEx has now paid roughly $454 million to settle suits of a similar nature.
Dive Insight:
Lawsuits continue to mount as workers challenge classification rules for employees who claim they are misclassified as independent contractors. The costs of such suits are also rising, as the number of workers banding together in class action suits make for greater class-action financial outlays by the companies responsible.
Settlements are becoming more common in such proceedings than legal battles resolved in court, which can drag on for years and accumulate extensive court costs. Companies are also wary about plaintiff victory that could set a legal precedent, allowing for similar judgments in other outstanding cases.
What's needed is a reconsideration of employment laws, which haven't changed since the 1938 enactment of the Fair Labor Standards Act (FLSA). However, with the Trump Administration's focus now squarely on trade reform, an overhaul on protecting workers' rights is unlikely to find support at this time. However, with cases such as FedEx continuing to propagate, the Supreme Court may be ready to step in at an opportune time.
