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FedEx to pay $3 million in misclassification

July 16, 2010

The Massachusetts Attorney General's office announced FedEx Ground agreed to pay the state $3 million to settle claims the company misclassified FedEx Ground drivers as independent contractors.

FedEx Ground's misclassification caused it to underpay on payroll taxes, workers' comp and unemployment insurance, according to the Massachusetts Attorney General's office.

In addition, the settlement includes a payment for 13 drivers named in the Massachusetts Attorney General's citation. The (Worcester MA) Telegram newspaper reported the workers would receive $15,000 each.

The company denied liability in the settlement.

FedEx Ground drivers in Massachusetts also have a lawsuit pending against FedEx Ground, and it is not affected by this settlement, according to the Massachusetts Attorney General's office.

In lawsuits not connected to the Massachusetts Attorney General's settlement, FedEx Ground litigation over alleged misclassification of drivers includes 63 cases in 40 states involving some 27,000 drivers, according to information from Leonard Carder LLP, a law firm representing plaintiffs in those cases.