Craig v. FedEx Ground Package System, Inc.
300 Kan. 788
| Kan. | 2014Background
- Consolidated class actions alleging FedEx Ground delivery drivers were misclassified as independent contractors; Seventh Circuit certified questions to the Kansas Supreme Court about classification under the Kansas Wage Payment Act (KWPA).
- Kansas class defined to include 479 drivers who drove a vehicle on a full‑time basis under a standard FedEx Operating Agreement (OA) between Feb 11, 1998 and Oct 15, 2007, dispatched from Kansas terminals.
- District Court granted summary judgment to FedEx; Seventh Circuit sought Kansas law guidance because Kansas precedent mixed and the right‑to‑control test needed clarification.
- Kansas Supreme Court adopted a 20‑factor test (based on Crawford/IRS guidance and economic‑realities concepts) with primary emphasis on the employer’s right to control the worker.
- The court reviewed undisputed facts about the OA and FedEx practices (uniform/vehicle specs, audits, customer service rides, training, route assignment, payment structure, hiring/approval of helpers, ability to sell routes subject to FedEx approval) and analyzed each factor.
- Holding: under the undisputed facts and for the certified class of full‑time drivers, FedEx drivers are employees under the KWPA; acquiring additional routes (where driver is not the active driver) does not change status for the assigned service area.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FedEx drivers are "employees" under the KWPA | Drivers contend the OA and FedEx practices show they are employees entitled to wage remedies and expense reimbursement | FedEx argues the OA labels drivers independent contractors and asserts it controls only results, not means; drivers are entrepreneurial | Held: Drivers (full‑time class members) are employees under the KWPA — substance over form, control and integration show employment |
| Which test governs employee status under the KWPA | N/A (courts applied various tests) | FedEx urged deference to contract and entrepreneurial indicia | Held: Kansas adopts an integrated 20‑factor test (right‑to‑control primary, incorporating economic‑realities factors) to determine status |
| Effect of OA language stating drivers are independent contractors | Plaintiffs: contractual label is not dispositive; courts should examine actual practices | FedEx: express contract language and some entrepreneurial features support independent contractor status | Held: Contractual labels do not control where actual practices and supervision demonstrate employer control and employment relationship |
| Whether acquiring additional routes (not personally driven) alters employment status | Plaintiffs: class limited to full‑time drivers; employment status applies to assigned service areas | FedEx: acquiring routes indicates entrepreneurial opportunity altering status | Held: No — for full‑time drivers in the certified class, acquiring routes for which they are not the active driver does not change the employer/employee relationship for the assigned service area |
Key Cases Cited
- Crawford v. Kansas Dept. of Human Resources, 17 Kan. App. 2d 707 (Kan. Ct. App. 1989) (source of multi‑factor analysis for employment status)
- Hartford Underwriters Ins. Co. v. Kansas Dept. of Human Resources, 272 Kan. 265 (Kan. 2001) (applied right‑to‑control factors in worker classification)
- Herr v. Heiman, 75 F.3d 1509 (10th Cir. 1996) (examined multiple factors with emphasis on right to control)
- Barlow v. C.R. England, Inc., 703 F.3d 497 (10th Cir. 2012) (economic‑realities test factors described)
- Baker v. Flint Engineering & Const. Co., 137 F.3d 1436 (10th Cir. 1998) (factors such as hiring/firing power and control over work conditions)
- Estrada v. FedEx Ground Package System, Inc., 154 Cal. App. 4th 1 (Cal. Ct. App. 2007) (found FedEx drivers to be employees under California law; contract language insufficient)
- FedEx Home Delivery v. N.L.R.B., 563 F.3d 492 (D.C. Cir. 2009) (concluded independent contractor status under common‑law agency test for NLRA context)
- Anfinson v. FedEx Ground, 174 Wash. 2d 851 (Wash. 2012) (adopted economic dependence test for delivery drivers under state law)