Robert Gennell, Jr. et al.
FedEx Ground Package System, Inc. Opinion No. 2013 DNH 110
Susan E. Ellingstad, Esq.
Jordan M. Lewis, Esq.
Edward K. O’Brien, Esq.
Jozef Kopchick, Esq.
Kenneth Sansom, Esq.
Leann M. Walsh, Esq.
James C. Rehnquist, Esq.
Lucy J. Karl, Esq.
AMENDED MEMORANDUM AND ORDER
Paul Barbadoro, United States District Judge
This class action was filed against FedEx Ground Package System, Inc. (“FedEx”) by several FedEx drivers based in New Hampshire who claim that FedEx improperly treated them as independent contractors rather than employees. The action was centralized in a multidistrict litigation proceeding with other similar actions against FedEx. The transferee court later determined that the New Hampshire drivers could be treated as independent contractors under New Hampshire common law but that they qualified as employees under certain state statutes. It then remanded the action to this court.
Two class claims remain in dispute. Plaintiffs allege in their second cause of action (“Deduction Claim”) that FedEx made deductions from the drivers’ compensation that were prohibited by N.H. Rev. Stat. Ann. § 275:48. They allege in their eighth cause of action (“Reimbursement Claim”) that FedEx failed to reimburse the drivers for work-related expenses in violation of N.H. Rev. Stat. Ann. § 275:57. FedEx has filed a motion for summary judgment contending that both claims are preempted by the Federal Aviation Administration Authorization Act of 1994 (“FAAAA”). It also argues that the Reimbursement Claim is deficient even if it is not preempted. Plaintiffs have filed their own motion for partial summary judgment.
A. The Relationship between FedEx and Drivers
FedEx is a nationwide small package pick-up and delivery company. During the class period, the company conducted its business delivery operations under the name “FedEx Ground” (“FEG”) and its home delivery operations under the name “FedEx Home Delivery” (“FHD”). The class includes New Hampshire drivers from both FEG and FHD who worked for FedEx as independent contractors between April 27, 2002 and June 1, 2009. In re FedEx Ground Package Sys., Inc. Emp’t Practices Litig., 273 F.R.D. 424, 470–72 (N.D. Ind. 2008); Tr. 5.
FedEx entered into a standard-form “Operating Agreement” (“OA”) with each class member. See Doc. No. 53-3. The OA characterizes the drivers as independent contractors. Doc. No. 53-3 at 6 (“Both [FedEx] and Contractor intend that Contractor will provide these services strictly as an independent contractor, and not as an employee of [FedEx] for any purpose.”). The drivers, nevertheless, agreed to conduct their business in a manner that identified them as part of the FedEx system. The OA “set[s] forth the mutual business objectives of the two parties . . . but the manner and means of reaching [the] results are within the discretion of the Contractor.” Doc. No. 53-3 at 6.
The drivers agreed to render their services using a FedEx terminal in New Hampshire as their home base. See Id. at 21. They were required to fill out daily logs and inspection reports and file the originals with FedEx at the end of each business day. Id. at 9. The drivers also had to meet an “Agreed Standard of Service, ” which included cooperating with FedEx employees, maintaining the professional image and good reputation of FedEx, and conducting all business activities with integrity and honesty. Id. at 10–12. The OA restricted drivers from using their equipment for any other purpose while the equipment was in the service of FedEx. Id. at 8.
FedEx compensated the drivers through weekly settlement payments. The settlement payments were calculated using a compensation formula that took into account the volume of the drivers’ package deliveries, the number of stops they made, and the density of their delivery area, and deducted certain expenses FedEx incurred on behalf of the drivers. Id. at 18–20.
Deemed “independent contractors, ” the drivers were required to procure their own trucks and operate them at their own expense. Id. at 7 (requiring the drivers to bear all costs and expenses of operating the trucks, including maintenance, fuel, oil, tires, repairs, taxes, insurance, workers compensation assessments, licenses, vehicle registration fees, and tolls). The drivers were also required to mark their trucks and other equipment with FedEx colors, logos, numbers, marks, and insignia and wear a FedEx uniform. Id. at 8, 12. The drivers either paid for these expenses out-of-pocket or they were deducted from their weekly settlement payments. For instance, to facilitate the payment of licenses, taxes, and fees, the drivers authorized FedEx to pay the charges on the drivers’ behalf and then deduct the expenses from their weekly settlement payments. Id. at 7–8. Drivers could elect to participate in a business support package (“BSP”) through which FedEx provided the drivers with uniforms, communications equipment, Department of Transportation (“DOT”) inspections, equipment washing, and drug tests to meet DOT requirements. Most drivers participated in the BSP and the cost was deducted from their weekly settlement payments. Id. at 24. If a driver did not elect to acquire the communications equipment necessary to fulfill his obligations through the BSP, he was required to purchase or lease it. Id. at 12.
In addition to the BSP deduction, plaintiffs allege that FedEx deducted the cost of deadhead,  work accident insurance, and cargo insurance, as well as the postage fees associated with sending correspondence ...