Teamsters Hail IRS Decision to Fine FedEx $319 Million

Years of Misclassifying Workers Catches Up to FedEx Ground

WASHINGTON, Dec. 21 /PRNewswire-USNewswire/ -- FedEx Corp. (NYSE: FDX) was
delivered a big lump of coal today by the Internal Revenue Service, which
slammed the company with a $319 million fine and penalties over its illegal
independent contractor model. The IRS determined that FedEx Ground workers
were indeed employees, a fact long asserted by the Teamsters Union.
"What a great Christmas gift to FedEx Ground workers who have suffered
under FedEx's illegal independent contractor scam," said Teamsters General
President Jim Hoffa. "It's a fundamental fact that FedEx has been skirting the
law, and the Teamsters welcome the IRS decision."
The news caps a difficult week for the anti-union company. On Wednesday,
the Massachusetts Attorney General cited FedEx Ground for intentionally
misclassifying pickup and delivery drivers as independent contractors rather
than employees. This follows a decision last month by the California Supreme
Court, which refused to review an appeals court ruling that single route
drivers in the state were misclassified. On Thursday, FedEx publicly
acknowledged that regulatory and legal challenges on misclassification could
hurt its stock price.
"It's game over for FedEx's independent contractor scam," Hoffa said.
Since the $319 million fine only covers 2002, FedEx could face additional
penalties totaling over a billion dollars after the IRS completes its
investigation into the company's illegal employment practices that continue to
this day.
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, +1-202-497-7766, lstrope@teamster.org