Cuomo files suit against FedEx

By Jessica M. Karmasek | Oct 26, 2010


ALBANY, N.Y. (Legal Newsline) - New York Attorney General and Democratic gubernatorial candidate Andrew Cuomo is suing Federal Express' ground package delivery unit, alleging it is violating state labor laws.

The lawsuit, filed Friday, contends the company's classification of drivers as "independent contractors" illegally deprives them of legal protections workers enjoy. Similar allegations recently led to a $2.3 million settlement between FedEx and Montana Attorney General Steve Bullock.

FedEx claims its drivers are independent contractors, who cannot organize under federal labor laws and also do not receive medical, pension and other benefits from employers.

However, FedEx Ground drivers have challenged their contractor status in several courts, and attorneys general in other states also have challenged the company over the issue.

Cuomo's suit accuses FedEx Ground Package System of devising "an elaborately structured scheme" to make it appear as though its driver employees are independent contractors, according to court documents.

Maury Lane, a spokesman for Memphis, Tenn.-based FedEx Corp., told The Associated Press that numerous federal and state courts -- and the Internal Revenue Service -- have upheld its current contractor system.

Lane told the AP the lawsuit is without merit and "a real assault on the American working class."

Cuomo's lawsuit contends, "Drivers have little or no opportunity to negotiate with FedEx over their rates of pay or other terms of their employment, and are severely limited in their ability to earn outside income because of restrictions imposed by FedEx."

The attorney general's suit seeks an injunction, unspecified restitution and damages.

In August, FedEx Corp. sued Cuomo, seeking to stop an investigation of the air and ground delivery services company over allegations of civil fraud.

The company argued that Cuomo's office has exceeded its authority.

A lawsuit filed in Manhattan federal court asked a judge to block the investigation of FedEx prices, routes and services following a June 8 subpoena from the attorney general.

The FedEx complaint said that "although the Attorney General possesses this authority under state law, he has no power, or jurisdiction to investigate or file suit against a federally certified air carrier premised upon New York Executive Law."

From Legal Newsline: Reach Jessica Karmasek by e-mail at jessica@legalnewsline.com.

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