CWS 3.0: March 26, 2014

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FedEx Driver Case Not a ‘Slam-Dunk’

FedEx Ground has agreed to settle a claim made against it by 141 drivers who claim they were misclassified as independent contractors. The drivers sought compensation for unpaid overtime and unlawful paycheck deductions under Maine law.

U.S. District Court Judge D. Brock Hornby accepted the settlement over the objections of 13 members of the class action, most of whom believed FedEx should pay more. The $5.8 million settlement includes attorneys’ fees of $1.9 million. The plaintiffs will receive their portion based on length of service, with compensation ranging from about $55,000 to $214. Nearly half of the class will receive at least $25,000.

In explaining his acceptance of the settlement, Hornby conceded that should the case proceed to trial, it could result in more than $10 million judgment plus attorneys’ fees. However, he noted that the case “was never a slam-dunk win for the FXG drivers,” citing several similar cases nationwide that have been divided. Further, he pointed out that any victory by the drivers would be appealed, and that FedEx could challenge the class status. Because in such a situation, any payments to the plaintiffs would be “some years away,” Hornby believed the settlement, “which is clearly a compromise that discounts to some degree that drivers’ total claims, is nevertheless fair, reasonable and adequate.”