Schwann et al v. Fedex Ground Package System, Inc.

Filing 65

Judge Richard G. Stearns: ORDER entered denying 56 Motion to Certify Class (RGS, law4)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
CIVIL ACTION NO. 11-11094-RGS
CLAYTON SCHWANN, THOMAS LEDUC, RAMON HELEODORO, JAMES
DUGGAN, ERIC VITALE, PHINNIAS MUCHIRAHONDO, TEMISTOCLES
SANTOS, LAWRENCE ADAMS, JEFF BAYLIES, AND ROBERT SANGSTER,
ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED
v.
FEDEX GROUND PACKAGE SYSTEM, INC.
MEMORANDUM AND ORDER ON
PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION
April 1, 2013
STEARNS, D.J.
The named plaintiffs in this case are former pick-up and delivery drivers for
FedEx Ground Package System, Inc. (FedEx), in Massachusetts. The drivers allege
that FedEx violated Massachusetts law by improperly classifying them as independent
contractors when they in fact worked as direct employees of FedEx. Before the court
is a motion to certify a litigating class to prosecute claims against FedEx arising under
Mass. Gen. Laws ch. 149, § 148B (the Independent Contractor Law) and Mass. Gen.
Laws ch. 149, §§ 148, 150 (the Wage Law).
BACKGROUND
Plaintiffs’ claims against FedEx have had a long shelf life. The proposed class

members are dissenters from a settlement involving a previous putative class action
filed in this court some eight years ago, Sheehan v. FedEx Ground Package Sys., Inc.,
No. 1:05-cv-10936-RGS (D. Mass. May 6, 2005). The plaintiffs in Sheehan made the
same improper classification claim and sought the same remedies under the Wage Law.
Shortly after the case was filed, it was transferred by the Multidistrict Litigation (MDL)
Panel to the Northern District of Indiana, where it was consolidated for pretrial
purposes with a number of largely identical cases brought against FedEx. The MDL
transferee judge, the Honorable Robert Miller, Jr., ultimately denied the Sheehan
plaintiffs’ motion for class certification.
After the case was returned to this court, the Sheehan plaintiffs entered into a
global settlement agreement with FedEx. As part of the agreement, FedEx provided
contact information for all of its Massachusetts drivers to a settlement administrator.
After being advised of the settlement terms, all but forty of FedEx’s drivers chose to
participate. This case was then brought on behalf of the drivers who did not settle –
either because they had rejected the terms of FedEx’s offer or because they had been
inadvertently omitted from or incorrectly identified on the list of drivers provided by
FedEx.
The necessary facts as they relate to the class certification motion are
straightforward and, for the most part, not in dispute. Each of the putative class
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members signed a standard FedEx Operating Agreement upon joining FedEx. Pursuant
to the Agreement, each driver acquired a transferable and exclusive interest in a
“Primary Service Area” in Massachusetts. Within his respective service areas, each
driver made daily package pick-ups and deliveries, while using a FedEx terminal as a
base of operations. The Agreement specified that the signatory driver was to work as
an independent contractor, and not as an employee of FedEx.
The drivers claim that despite being classified as independent contractors, FedEx
retained and exercised nearly complete control over their daily activities. As indicia
of FedEx’s iron sway, they point to provisions in the Operating Agreement that, among
other things: specify the vehicle the driver was to use and its appearance; require the
driver to wear a uniform with a prominent FedEx logo; establish the driver’s rate of
pay; and allow FedEx to determine the minimum number of packages the driver must
handle on a daily basis. The drivers also argue that because of the extent of their
obligations under the Operating Agreement, they had no option but to work exclusively
for FedEx.
DISCUSSION
To maintain a class action, plaintiffs must as an initial matter meet the
requirements of Federal Rule of Civil Procedure 23(a). They must demonstrate that:

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(1) the class is so numerous that joinder of all members is impracticable;
(2) there are questions of law or fact common to the class;
(3) the claims or defenses of the representative parties are typical of the
claims or defenses of the class; and
(4) the representative parties will fairly and adequately protect the
interests of the class.
Fed. R. Civ. P. 23(a). If these prerequisites are met, the drivers must then satisfy one
of the three requirements of Rule 23(b). Insofar as relevant to this case, they must
demonstrate that “questions of law or fact common to class members predominate over
any questions affecting only individual members, and that a class action is superior to
other available methods for fairly and efficiently adjudicating the controversy.” Fed.
R. Civ. P. 23(b)(3). Because this issue is conclusive, the court will begin and end its
analysis with the predominance requirement.
The success of plaintiffs’ claims hinges upon a finding that FedEx improperly
classified its drivers as independent contractors instead of employees, thereby depriving
them of employee benefits to which they were otherwise entitled (at no inconsiderable
saving to FedEx). Whether the appropriate showing can be made turns on the test
under Massachusetts law that defines the difference between an employee and an
independent contractor. Under Massachusetts law, a worker is deemed an employee
unless the putative employer can show:
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(1) the individual is free from control and direction in connection with the
performance of the service, both under his contract for the performance
of service and in fact; and
(2) the service is performed outside the usual course of the business of the
employer; and,
(3) the individual is customarily engaged in an independently established
trade, occupation, profession or business of the same nature as that
involved in the service performed.
Mass. Gen. Laws ch. 149, § 148B. “The employer bears the burden of proof, and,
because the conditions are conjunctive, its failure to demonstrate any one of the criteria
set forth in subsections [(1), (2), or (3)], suffices to establish that the services in
question constitute ‘employment’ within the meaning of [§148B].” Athol Daily News
v. Bd. of Div. of Employment and Training, 439 Mass. 171, 175 (2003).
Plaintiffs, for their part, argue that FedEx cannot show that the drivers’ services
were performed outside of the company’s usual course of business as the second prong
of the test requires. In this regard, they rely on the restrictive provisions of the
Operating Agreements as well as purported evidence about FedEx’s business model.
Because each driver signed an Operating Agreement as prelude to beginning work for
FedEx, plaintiffs contend that “common issues” predominate.
The problem with plaintiffs’ argument is that it assumes its own conclusion. The
first and third prongs of section 148B require individualized factual inquiries. With

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respect to prong one, FedEx can only show that a driver was an independent contractor
by proving that he or she was not only free from the company’s control under the
Operating Agreement, but was also free “in fact.” Prong three requires FedEx to
provide individualized evidence about each driver’s history of “customary” work apart
from his or her duties with FedEx. Plaintiffs’ position that one can shortcut the
statutory test by making the classification decision based solely on common evidence
directed to the second prong of section 148B, while it has the attraction of expedience,
effectively presumes that the drivers were employees of FedEx. Although plaintiffs’
conclusion may ultimately prove correct, it is premature to reach it now without
considering the test as a whole.1 See Amgen Inc. v. Connecticut Ret. Plans & Trust
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The court has considered De Giovanni v. Jani-King Int’l, Inc. 262 F.R.D. 71
(D. Mass. 2009), in which the district court certified a class of franchisees who alleged
violations of the Massachusetts Independent Contractor and Wage Laws based on their
classification as independent contractors by franchisor. Like MDL Transferee Judge
Miller, this court is not persuaded that the first and third prongs of section 148B may
be answered with reference to common facts, as the district court held in Jani-King.
Plaintiffs also cite cases from other jurisdictions certifying classes of pick-up and
delivery drivers. However, the employee classification laws in those states all employ
a variant of the common law “right to control test,” under which a determination of
employee status is permitted by a common evidence rule. In recognition of the
variances in state law, Judge Miller certified classes in the MDL action in cases
originating from Oregon, Pennsylvania, and California–the states in which the right to
control-common evidence test is applied. In doing so, he found that “whether and to
what extent FedEx [ ] has the right of control can be resolved by reference to the
Operating Agreement and FedEx [ ] policies.” In re FedEx Ground Package Sys., Inc.
Employment Practices Litig., 273 F.R.D. 424, 469 (N.D. Ind. 2008). Similarly, the
recent certification of FedEx drivers as a class in Scovil v. FedEx Ground Package
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Funds, 568 U.S. ___, ___ (2013), quoting Fed. R. Civ. P. 23 Advisory Committee’s
2003 note (“[A]n evaluation of the probable outcome on the merits is not properly part
of the certification decision.”) (internal quotation marks omitted); In re FedEx Ground
Package Sys., Inc., Employment Practices Litig., 273 F.R.D. 516, 523 (N.D. Ind.
2010) (“Even though the second prong of the [independent contractor] test can be
decided on common evidence, a determination that FedEx can’t rebut this prong of the
test, obviating the need to determine the other two elements, would be a decision on
the merits, which is improper at the class certification stage.”).
In determining whether common issues predominate, “it may be necessary for
the court to probe behind the pleadings,” and an analysis under Rule 23(b)(3), like Rule
23(a), “will frequently entail overlap with the merits of the plaintiff’s underlying claim.”
Comcast Corp v. Behrend, 569 U.S. ___, ___ (2013), quoting Wal-Mart Stores, Inc.
v. Dukes, 564 U.S. ___, ___ (2011) (internal quotation marks omitted). But this case
does not present disputed legal or factual premises requiring an examination of the
merits to “formulate some prediction as to how specific issues will play out.” In re

Sys., Inc., 886 F. Supp. 2d 45 (D. Me. 2012), was also premised on the right to control
test. See id. at 54 (“But Murray’s Case [a Maine Supreme Judicial Court decision]
makes the individualized actual control evidence of doubtful relevance: ‘[t]he test of
the relationship is the right to control. It is not the fact of actual interference with the
control, but the right to interfere, that makes the difference between an independent
contractor and a servant or agent.’”(quoting Murray’s Case, 130 Me. 181 (1931))).
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New Motor Vehicles Canadian Exp. Antitrust Litig., 522 F.3d 6, 17 (1st Cir. 2008)
(citation and internal quotation marks omitted). Such power to “test disputed premises
at the certification stage” is appropriate “if and when the class action would be proper
on one premise but not another.” Id. (citation and internal quotation marks omitted).
Here, there is no disagreement that the appropriateness of FedEx’s classification of
plaintiffs as independent contractors is the warp and woof of any eventual awarding of
class action status and that the correctness of that determination must ultimately be
made under the terms of section 148B. But plaintiffs in effect are asking the court to
make a preemptive strike by concluding from the outset that FedEx’s independent
contractor defense must inevitably fail. This would not be a probe of the merits, but
a brevis adjudication that is not permitted at the class certification stage of Rule 23
litigation.
ORDER
For the foregoing reasons, plaintiffs’ motion for class certification is DENIED.
SO ORDERED.
/s/ Richard G. Stearns
_______________________________
UNITED STATES DISTRICT JUDGE

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