FedEx Ground has settled a case with the Attorney General of Massachusetts for misclassifying its delivery drivers. FedEx Ground classifies its drivers as independent contractors, instead of employees, which results in substantial cost-savings to FedEx Ground because under such an arrangement its drivers bear FedEx Ground's overhead costs, among other things.
The media reported yesterday that the attorneys general for eight states informed FedEx Ground that it had formed a group to examine the company's classification of its drivers as "independent contractors," as opposed to "employees." The decision by the attorneys general is significant because FedEx Ground is currently defending multiple class action lawsuits filed by drivers across the country concerning the alleged misclassification of drivers as independent contractors. In fact, Gangemi Law Firm, P.C. represents a class composed of drivers working for FedEx Ground in New York State.
The United States Supreme Court recently ruled that a union could contract away a union member's rights to pursue a statutory discrimination claim in court. In 14 Penn Plaza L.L.C. v. Pyett, the Supreme Court considered whether a union member with an age discrimination claim under the Age Discrimination Employment Act ("ADEA") could be required to privately arbitrate the claim rather then pursue it in court. Surprisingly, a divided Supreme Court concluded that a union member could be mandated by a collective bargaining agreement ("CBA") to arbitrate a statutory discrimination claim.
In a case that will have a profound effect on the enforceability of agreements containing class action waivers, the United States Court of Appeals for the Second Circuit recently held in In re American Express Merchants' Litigation that, depending upon the circumstances, an agreement prohibiting merchants from filing a class action for claims under federal antitrust law would grant a defendant "de facto immunity from antitrust liability by removing plaintiffs' only reasonably feasible means of recovery." The United States Court of Appeals for the Second Circuit is the federal appellate court for New York, Vermont and Connecticut.
In Peters v. Gilead Securities Inc., the 7th Circuit sent out a warning to employers using employee handbooks, that their provisions may be held legally binding due to the contract liability theory of promissory estoppel. Specifically, the court ruled that although a company may not be subject to the Family Medical Leave Act they may still be liable if their Employee Handbook states employees are eligible for such a leave.
Many executive employment agreements provide that an executive can only be terminated “for cause.” In addition, those agreements sometimes provide that the executive can terminate the employment relationship for “good reason.” A resignation for “good reason” results in it being treated as a termination without cause by the employer. This is significant, because the employee will then be entitled to damages, i.e., whatever the employee would have received under the agreement had he or she either remained employed or terminated without cause.