FedEx settles lawsuits from underpaid drivers for $224 million

FedEx has settled multiple lawsuits brought against it by 12,000 drivers who claim they have been underpaid. The courier company settled for $224 million in total.

The company was accused of undercompensating the drivers by classifying them as independent contractors rather than as full-time employees.

FedEx worked with independent contractors until 2011 as it allowed them to save on taxes and worker-related costs such as health care, pensions and fringe benefits.

The drivers, however, claimed that they were employees under US federal and state law as they were required to use company branded uniforms, vehicles and equipment.

The litigation was initiated in 2005 and a resolution might still have been years away without settlement.

The outcome of the case, which spanned 20 states, follows a similar settlement of $226 million made in California last year.

(Source: Reuters)