A lawsuit against FedEx claims the company violated US anti-racketeering law, Reuters reported. A shipper seeking to be an employee rather than an independent contractor filed the suit, which appears to be the first case where a FedEx ground contractor has sued the firm under the Racketeer Influenced and Corrupt Organizations Act.
If successful, the case, filed by PYNQ Logistics Services, could threaten a restructuring through which FedEx has been shifting significant package volume from its employee-staffed Express unit to its Ground unit that relies on about 6,000 contractors to handle delivery and transportation services.
“We are aware of the allegations made in this complaint and will vigorously defend all of the claims in the lawsuit,” FedEx told SIA in an email.
Frank Botta, former in-house attorney for the company that FedEx bought and rebranded as its Ground business, said this is a twist of an attack on the independent contractor relationship, according to Reuters.
“They set this up as fraud claims to avoid arbitration,” said Botta, who now defends companies facing legal challenges involving contractors as a partner at Lynch Law Group in Pennsylvania, though he is not involved in this case.