In re Fedex Ground Package System, Inc. Employment Practices Litigation

273 F.R.D. 516, 2010 WL 2038560
CourtDistrict Court, N.D. Indiana
DecidedMay 19, 2010
DocketCause No. 3:05-MD-527 RM; No. MDL-1700
StatusPublished
Cited by3 cases

This text of 273 F.R.D. 516 (In re Fedex Ground Package System, Inc. Employment Practices Litigation) is published on Counsel Stack Legal Research, covering District Court, N.D. Indiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Fedex Ground Package System, Inc. Employment Practices Litigation, 273 F.R.D. 516, 2010 WL 2038560 (N.D. Ind. 2010).

Opinion

OPINION AND ORDER

ROBERT L. MILLER, JR., District Judge.

The court, in its March 2010 order (doc. #2018), denied the Michigan plaintiffs’ motion to amend class certification order. The court examined the evidence submitted in support of the Michigan plaintiffs’ summary judgment motion and in light of that state’s emphasis on actual control, decided that the liability issues aren’t subject to class-wide proof, but instead require individualized and fact intensive determinations. The court instructed the parties that had filed briefs on motions to amend class certification on the ground addressed in the Michigan order to file a supplemental statement indicating how their position differs from the Michigan plaintiffs’ position. The plaintiffs and FedEx have filed their supplemental statements, and for the reasons stated below, the court denies the plaintiffs’ motions.

Illinois

The named Illinois plaintiffs have asserted claims for violations arising under the Illinois Wage Act, 820 Ill. Comp. Stat. 115/1, et seq., [521]*521the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 III. Comp. Stat. 505/1, et seq., and claims for rescission, declaratory judgment, and injunctive relief. The plaintiffs ask the court to reconsider its class certification denial based on arguments and evidence presented in their summary judgment motion. The plaintiffs contend the court can decide these claims by common evidence and that any individualized evidence offered by FedEx won’t change the court’s determination of employment status.

The Illinois plaintiffs’ claims relying on the state’s common law definition of employee require the court to determine not only right to control, but also actual exercise of control. “Common-law factors to consider in examining a worker’s potential status as an employee include ‘the amount of control and supervision, the right of discharge, the method of payment, the skill required in the work to be done, the source of tools, material or equipment, and the work schedule.’ Of these, control of the manner in which work is done is considered the most important.” Mitchell v. Department of Corr., 367 Ill. App.3d 807, 305 Ill.Dec. 788, 856 N.E.2d 593, 598 (2006) (internal citations omitted). This court found that Illinois law contemplates “that even when the ‘employment’ agreement vests enough control in the hiring party to create an employment relationship, the inquiry still must extend into the parties’ extra-contractual relationship.” Doe. # 1119, p. 142.

In the Michigan order denying reconsideration of class certification, the court held that a determination of FedEx’s actual exercise of control required the court to review individualized evidence, so questions of law or fact common to the members of the class don’t predominate over questions affecting only individual members. The plaintiffs acknowledge that the court’s Michigan order applies to their common law claims, and on that ground, Illinois plaintiffs’ position doesn’t differ materially from the Michigan plaintiffs’ position. For the reasons stated in the Michigan order, the court denies the plaintiffs’ request to reconsider class certification as to the Illinois plaintiffs’ common law claims.

As this court explained when denying class certification, the Illinois Wage Act contains its own definition of employee. Doc. # 1119, p. 139. That Act provides that “any individual permitted to work by an employer in an occupation” is an employee, and then creates an exemption to the Act’s coverage for any person who is free—both under the contract and in practice—from control and direction over the work’s performance, whose work is performed either outside the employer’s usual course of business or outside the employer’s places of business, and who is in an independently established business. 820 Ill. Comp. Stat. 115/2. This three-prong test is known as the “ABC test”. Each element of the exemption must be present for the service provider to be an independent contractor for purpose of the Wage Act. Novakovic v. Samutin, 354 Ill.App.3d 660, 289 Ill.Dec. 892, 820 N.E.2d 967, 973 (2004); Byung Moo Soh v. Target Mktg. Sys., Inc., 353 Ill.App.3d 126, 288 Ill.Dec. 455, 817 N.E.2d 1105,1109 (2004). Because the putative employer must demonstrate the exemption’s applicability, the Wage Act creates a near-presumption that a worker is an employee rather than an independent contractor. See Adams v. Catrambone, 359 F.3d 858, 864 (7th Cir.2004). This same three-part test is also found in the Illinois Unemployment Insurance Act, 820 III. Comp. Stat. 405/212. Illinois courts rely on interpretations of the test under the Unemployment Insurance Act to guide their application of the Wage Act exemption. See e.g., Novakovic v. Samutin, 289 Ill.Dec. 892, 820 N.E.2d at 974.

This court ruled that because the Wage Act places the burden on FedEx to establish that all three prongs of the ABC test are met, FedEx must be given a chance to rebut the presumption by presenting both common and individualized evidence. For example, to establish that its drivers are independent contractors, FedEx will be required to prove its drivers’ freedom from control, not only under the Operating Agreement, but also “in fact.” In addressing a similar test under Massachusetts law, the court noted that “FedEx Ground will need to prove freedom from control in practice, as well as freedom from [522]*522control under the Operating Agreement.” Doe. 1119, p. 60. The Massachusetts plaintiffs argued that freedom in fact need never be reached because FedEx won’t be able to carry its burden of showing freedom from control under the Operating Agreement, making the plaintiffs employees. The court responded, “Perhaps so, but this is not the time for decision on the merits.” Doc. # 1119, p. 60. This court further noted that the facts needed to rebut the presumption “include the nature of the hired party’s business or profession, which is unlikely to be determined by the contract itself.” Doc. # 1119, p. 143. Accordingly, the court ruled that Illinois law “poses questions upon which FedEx Ground must be allowed to present driver-by-driver evidence.” Doc. # 1119, p. 143.

The plaintiffs ask the court to reconsider its denial of class certification because the fully briefed Illinois summary judgment motion establishes that all three prongs of the ABC test can be determined by reference to common evidence. FedEx can’t meet the second prong of the test, the plaintiffs argue, because common evidence shows that the drivers’ work is a regular part of FedEx’s business and material parts of the drivers’ work occur within FedEx’s terminals and the geographic area in which FedEx conducts business. As to the third factor, the plaintiffs argue that common evidence shows the Illinois plaintiffs wouldn’t be able to operate a delivery business without dependency upon FedEx, so FedEx can’t show that the drivers have independently established businesses. The plaintiffs further contend that even if the court were to find it necessary to examine the first prong of the test, common evidence demonstrates that FedEx reserved the right to control the drivers’ work, making is unnecessary to examine actual control. Accordingly, the plaintiffs conclude that FedEx hasn’t offered any individualized evidence that can possibly rebut the presumption of employee status.

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Related

Bruger v. Olero, Inc.
N.D. Illinois, 2020
Reginald Gray v. FedEx Ground Package System
799 F.3d 995 (Eighth Circuit, 2015)
Costello v. Beavex Inc.
303 F.R.D. 295 (N.D. Illinois, 2014)

Cite This Page — Counsel Stack

Bluebook (online)
273 F.R.D. 516, 2010 WL 2038560, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-fedex-ground-package-system-inc-employment-practices-litigation-innd-2010.