| (Washington, D.C.) – 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. |
