8-KMaterial Agreements

FEDEX CORP 8-K Report, Material Agreement (Jul 8, 2015)

Filed July 8, 2015For Securities:FDX

Summary

FedEx Corporation, through its subsidiary FedEx Ground Package System, Inc., has entered into a $228 million class action settlement agreement to resolve a lawsuit concerning the classification of independent contractors. The lawsuit, Dean Alexander, et al. v. FedEx Ground Package System, Inc., involved approximately 2,300 individuals who contracted with FedEx Ground in California between November 17, 2000, and October 15, 2007. Plaintiffs alleged they were misclassified as independent contractors and sought recovery for various claims including business expenses, unpaid overtime, and penalties under California law. The settlement amount of $228 million will cover class member payments, attorneys' fees, and administrative costs, subject to final approval by the District Court. This agreement aims to release FedEx Ground from all claims asserted or that could have been asserted related to the contractor classification during the specified period. Investors should note that this is a significant expense that will impact the company's financial results for the period in which it is finalized.

Key Highlights

  • 1FedEx Ground reached a $228 million settlement to resolve a class action lawsuit regarding independent contractor classification.
  • 2The lawsuit involved approximately 2,300 former contractors in California who performed pick-up and delivery services between November 2000 and October 2007.
  • 3Plaintiffs alleged misclassification as independent contractors, seeking damages for unpaid wages, business expenses, and penalties under California labor laws.
  • 4The settlement amount will cover payments to class members, attorneys' fees, and claims administration costs.
  • 5The settlement is subject to preliminary and final approval by the United States District Court for the Northern District of California.
  • 6The settlement provides a release of claims related to the contractor classification for the period of November 17, 2000, through the date of preliminary court approval.

Frequently Asked Questions

This filing announces that FedEx Ground Package System, Inc., a subsidiary of FedEx Corporation, has entered into a $228 million settlement agreement to resolve a significant class action lawsuit concerning the alleged misclassification of independent contractors in California.

The lawsuit alleged that the plaintiffs, who acted as independent contractors for FedEx Ground between 2000 and 2007, were actually employees and were therefore entitled to compensation and benefits under California law. Claims included unpaid overtime wages, business expense reimbursements, penalties for late wage payments, and other damages.

The $228 million settlement fund is intended to cover payments to the approximately 2,300 class members, as well as attorneys' fees and the costs associated with administering the settlement, such as notifying class members and processing claims. These amounts are subject to court approval.

The settlement is contingent upon the preliminary and final approval of the United States District Court for the Northern District of California. Without final court approval, the settlement will not become effective, and FedEx Ground would not be released from the claims in the lawsuit.