HELENA - Attorney General Steve Bullock, along with attorneys general in New Jersey and New York, put FedEx on notice Tuesday that the states intend to sue the company if FedEx doesn't change the way it treats its truck drivers, who are classified as "contractors," not employees.
FedEx Ground truck drivers appear to be company employees "right down to their socks," Bullock said in an interview Tuesday. Yet the Memphis-based company classifies all FedEx Ground drivers as contractors, which means they are not covered by unemployment insurance, state wage and hour laws or company-paid worker's compensation insurance.
Some 300 FedEx Ground drivers are in Montana.
Bullock said the drivers are employees in everything but name - DASH- and benefits - DASH - only. They are required to buy their own trucks, which are emblazoned with FedEx logos; they are required to rent and wear a FedEx uniform, and they are generally treated like employees, not true independent contractors.
"These employees are denied basic protections," he said.
Maury Lane, a FedEx spokesman in Memphis, said the company has been talking with Bullock and his counter parts, New York Attorney General Andrew Cuomo and New Jersey Attorney General Anne Milgram, about the dispute.
"While we intend to continue with those discussions, we will vigorously defend the right of FedEx Ground independent contractors to own and operate their businesses, should the attorneys general pursue litigation," Lane said in a statement.
Bullock, Cuomo and Milgram sent letters to FedEx Tuesday threatening the lawsuit.
The move won praise from the International Brotherhood of Teamsters, a national union representing truck drivers.
According to the Teamsters, FedEx Ground drivers are responsible for their own trucks, maintenance, uniforms, fuel and equipment. Yet FedEx controls the drivers' hours, what they wear and where they drive.
"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.
Bullock said Tuesday's letter was the culmination of work that began almost a year ago. More than 15 other states are in a working group looking at FedEx Ground's "business model," he said. Those states sent FedEx a letter in June saying they were concerned with the company's classification of drivers.
Bullock said FedEx officials have been in Montana to discuss the issue with him.
"We will continue to talk to the company," he said Tuesday. But if those talks don't result in significant changes, he will sue.
There have been other lawsuits against the company in other states for the same issue, Bullock said.
State investigations in Montana, New Jersey and New York have determined FedEx Ground drivers are de facto employees, with the company controlling almost every aspect of their work day. They are also only allowed to deliver non-FedEx freight when FedEx is closed, even though they either buy or lease their own trucks. FedEx supervises their work. That, along with other features of FedEx Ground's relationship with their drivers, Bullock said, constitutes an "employee" under Montana law.
Because FedEx Ground does not consider its drivers employees, it also doesn't buy unemployment insurance, money that would have gone to the state of Montana, Bullock said.