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FedEx agrees to settle 19 outstanding IC misclassification class actions

March 21, 2016

FedEx Corp. agreed to settle 19 outstanding cases where FedEx Ground drivers claimed they were misclassified as independent contractors. The settlements still need court approval, but the company recognized a liability of $204 million for the expected loss from these and other independent contractor-related cases in its fiscal third ended Feb. 29.

“These disputes involve a contractor model which FedEx Ground has not operated since 2011,” FedEx CFO Alan Graf said in a conference call with analysts on Wednesday. “This is good news because assuming the necessary court approvals are obtained, it resolves all of the remaining multi-district litigation cases.”

FedEx continues to litigate other contractor models that are not part of the multi-district litigation, but the company does not expect a material loss in the other cases.

Separately, the company last June reached an agreement to settle a class action involving California drivers for $228 million. A hearing for approval of that settlement is coming up next month.

The complex multi-district litigation began years ago and at one time 28 cases were certified as class actions across multiple sates.