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FedEx Home Delivery HR Model for Drivers

FedEx Home Delivery HR Model for Drivers. Wilmington, Mass, 32 contractors at 2 facilit. Recruitment Independent Contractors DOT driver requirements (e.g. license, drug screen) Operating Agreement - “take-it-or-leave it” drivers are ind. contractors

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FedEx Home Delivery HR Model for Drivers

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  1. FedEx Home Delivery HR Model for Drivers • Wilmington, Mass, 32 contractors at 2 facilit. • Recruitment • Independent Contractors • DOT driver requirements (e.g. license, drug screen) • Operating Agreement - “take-it-or-leave it” • drivers are ind. contractors • 14-Day FedEx Home Developed Training Prog. • FedEx Home may not determine breaks, hours, or routes taken • Must meet FedEx performance stds.

  2. Operating Agreement (cont.) • Wear Fed Ex Home Uniforms • Maintain personal appearance • Termination by driver or FedEx if business in area declines • Vehicles • Purchased (prices from $15-38,000) • Maintained by drivers • Normal operating maintenance and upkeep • DOT Standards for safety • FedEx Home standards for appearance and signage • Use • While delivering FedEx packages Tu-Sat as required), no other uses • May use vehicle for revenue when not on FedEx routes, 1 driver did so • Package Delivery • Service delivery area determined and may be changed by FedEx home • Must deliver all packages on truck scheduled for that day • Must permit FedEx Home management to ride with them from time to time • 2 all day service rides per year • Given packages but may deliver in order chosen • Deliveries based on customer contacts to FedEx Home, not drivers

  3. Operating Agreement (cont.) • Compensation 2005 – main elements • per stop • $1.29 regular • $6.50 per appointment • $2.75 evening • $.50 for signature • $.22 per package • $.20/mile between 201 and $400 • No fringe benefits • Bonuses based on meeting Fed Ex performance goals • Total Gross Revenue • Median and Mode $60-$90,000 • Range • High >$150,000 • Low $3500

  4. Operating Agreement (cont.) • Purchase scanners and Business Support Package • Insurance partially provided by drivers through a preferred vendor • Time off • purchase time off through program and FedEx Home will assign a “swing contractor” • Hire someone to drive route if approved by Fed Ex Home • Multiple route drivers must hire other drivers who must be approved by FedEx Home • 3 of 32 drivers • Routes may be sold • Buyers must be acceptable to FedEx Home • Only 1 route sold

  5. RD Analysis • 6 Cases all found drivers ees • 3 Roadway cases • 3 FedEX Home cases • Bases for finding of ee status • All do business in name of FedEx Home rather than their own names • uniforms • Logos • Vehicle specifications • FedEx Home training • Non-Fed Ex work • Not while delivering for Fed Ex • During off hours but no drivers do so • Due to constraints of relationship with Fed Ex-

  6. RD Bases for finding of ee status (cont). • FedEx maintains substantial control over performance • Determines and can change service area • Establishes Tu-Sat schedule • Determines day of delivery • Constrains control over daily schedule and breaks • “take-it-or-leave-it” agreement • Rates of compensation established by Fed Ex Home • Bonuses tied to compliance with guidelines • Business support for drivers

  7. FedEX Home Delivery v. NLRBCA DC, 2009 • Delivery drivers are independent contractors (IC’s) and therefore not covered by NLRA • Denies enforcement of NLRB finding of refusal to bargain • Reasoning • “Right of Control” test accepted since late 1960’s but definition of “control”is ambiguous • Criteria • Supervising performance? • Monitoring performance? • Improving performance? • Court looking for an objective, “bright line” test • Criteria for IC’s evolved • Significant entrepreneurial opportunity for gain or loss • May use trucks for own purposes if they mask FedEx logo • Fact that many contractors do not use trucks to earn income is less important than the fact that they may so use them • Other factors • May hire additional drivers • May operate multiple routes • May sell routes

  8. FedEX Home Delivery v. NLRBCA DC, 2009 • Dissent • No evolution to entrepreneurial opportunity as the major factor • One factor among many • FedEx Home-created obstacles to use of ent. opportunity • Multi-factor analysis • RD correct

  9. Restatement of Agency • In determining whether one acting for another is a servant or an independent contractor, the following matters of fact, among others, are considered: • (a) the extent of control which, by the agreement, the master may exercise over the details of the work; • (b) whether or not the one employed is engaged in a distinct occupation or business; • (c) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision; • (d) the skill required in the particular occupation; • (e) whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work; • (f) the length of time for which the person is employed; • (g) the method of payment, whether by the time or by the job; • (h) whether or not the work is a part of the regular business of the employer; • (i) whether or not the parties believe they are creating the relation of master and servant; and • (j) whether the principal is or is not in business.

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