Teamsters Applaud Attorneys General for Action on FedEx Ground's Illegal Driver Misclassification Scheme

Teamsters Applaud Attorneys General for Action on FedEx Ground's Illegal
Driver Misclassification Scheme

Hoffa: Time for FedEx to Stop Dodging State Taxes, Worker Protections

WASHINGTON, Oct. 20 /PRNewswire-USNewswire/ -- The Teamsters Union on Tuesday
praised attorneys general in New York, Montana and New Jersey for putting
FedEx Ground (NYSE: FDX) on notice that the company faces legal action for
violating labor laws, including shifting tax obligations onto residents
through an illegal driver misclassification scheme.

"FedEx Ground can't get away with being a bully anymore, hiding behind its
army of lobbyists to avoid responsibilities to workers and to American
taxpayers," said Teamsters General President Jim Hoffa. "This is an issue of
fairness. The laws of this country apply to everyone."

Attorneys General Andrew Cuomo of New York, Steve Bullock of Montana and Anne
Milgram of New Jersey sent a letter Tuesday to FedEx Ground warning the
company that it faces legal action, including restitution, damages, civil
penalties and other relief over its illegal misclassification of drivers.

"FedEx's illegal misclassification of its drivers has resulted in a serious
injustice to more than a thousand FedEx drivers in Montana, New Jersey and New
York," the letter said, also adding that "...besides hurting FedEx drivers,
FedEx's practices hurt the states of New Jersey, New York and Montana when
proper taxes are not paid. FedEx's practices also hurt other employers, which
face unfair competition as a result of FedEx's illegal cost-cutting measures."

The three states found that FedEx Ground drivers are illegally misclassified
as independent contractors, therefore denying them employment rights such as
workers' compensation benefits, anti-discrimination laws and wage and hour
protections. FedEx Ground drivers are required to spend thousands of dollars
for trucks, repairs, uniforms, fuel and other equipment. The company controls
the hours they work, how they dress and when they drive their own trucks.

"FedEx Ground has been cheating its workers and fleecing the taxpayers for too
long," said Ken Hall, Teamsters International Vice President and Director of
the Package Division. "Andrew Cuomo, Steve Bullock and Anne Milgram deserve
credit for standing up to a powerful multinational that pads its profits by
skirting state laws. Thanks to them, FedEx and its CEO Fred Smith won't be
allowed to profit from this scheme at the expense of its workforce and the
American taxpayers."

FedEx Ground is currently the subject of investigations by 30 other states
over its misclassification scheme. Also, more than 45 class-action lawsuits
have been filed against the company in state and federal courts over the
issue.

Misclassification of employees not only cheats workers, but leads to the loss
of federal income and employment tax revenue. It is estimated that more than
$4.7 billion in federal income is lost due to this practice. At the state
level, misclassifying 1 percent of workers results in an average of $198
million lost annually to state unemployment insurance funds.

Founded in 1903, the International Brotherhood of Teamsters represents 1.4
million hardworking men and women in the United States, Canada and Puerto
Rico.

SOURCE International Brotherhood of Teamsters

Leigh Strope of the International Brotherhood of Teamsters, +1-202-624-6911,
lstrope@teamster.org