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ATLANTA—A
unit of FedEx Corp., the second-largest
US
package-shipping company, was fined $190,000 by the
Massachusetts Attorney General for misclassifying 13
drivers as contractors and not full-time employees.
The
company, which is fighting the classification of
contractors in courts around the US, violated the
state’s independent contractor law, Attorney General
Martha Coakley said Wednesday in a statement.
Misclassification unfairly denies the workers retirement
and health benefits, she said.
“The
practice of misclassification does great harm, not only
to misclassified workers and to the commonwealth in the
form of lost revenues, but also by putting law-abiding
businesses at a disadvantage,” Coakley said in the
statement.
The
FedEx Ground unit faces class-action lawsuits in federal
court in Indiana on the same issue. Contract drivers in
those cases claim they are supervised and controlled as
if they are full-time employees. The company maintains
the drivers work for themselves, not FedEx.
FedEx
spokesman
Maury Lane
said the Memphis, Tennessee-based company was
disappointed in Coakley’s action.
“This
decision will have a chilling effect on thousands of
contractors who want to work that way,” Lane said in a
phone interview. “It’s not against the law to work for
yourself.”
Contractors make $85,000 a year before taxes and
business expenses, Lane said. FedEx has cooperated with
the attorney general since 2005 and was never warned
that the company’s business model was problematic until
Wednesday, he said.
Lane
said the 13 drivers involved in the investigation come
from stations where the Teamsters union is trying to
organize workers. The home-delivery drivers in
Wilmington, Massachusetts, voted to join the union,
according to the Teamsters.
“FedEx
Ground has for too long passed unnoticed as it calls its
drivers ‘independent’ but illegally controls them like
employees,” Teamsters President James Hoffa said in a
statement. “This action in Massachusetts is another nail
in the coffin of FedEx’s illegal business model.”
Coakley
said there are about 400 FedEx ground unit drivers in
the state and her investigation is continuing.
FedEx
Ground is the company’s second-biggest business by
sales, behind its Express Air unit, with about 17
percent of 2007 revenue.
FedEx
fell $2.13 to $94.63 in New York Stock Exchange
composite trading. The stock has fallen 13 percent this
year. United Parcel Service Inc., based in Atlanta, is
the world’s biggest package-shipping company.
(Bloomberg) |
