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Thursday, July 12, 2012

Ind. Decisions - 7th Circuit decides one Indiana case today

In Craig et al. v. FedEx (ND Ind., Miller), a 17-page per curiam opinion with multistate diversity issues, the Court writes:

FedEx Ground (“FedEx”) provides small package pick-up and delivery services through a network of pick-up and delivery drivers. The plaintiffs are current and former drivers for FedEx who allege that they were employees rather than independent contractors under the laws of the states in which they worked and under federal law. The Judicial Panel on Multidistrict Litigation consolidated these actions and transferred them to the District Court for the Northern District of Indiana. That court used the Carlene M. Craig, et al. case, which was based on the Employee Retirement Income Security Act (“ERISA”) and Kansas law, as its “lead” case. The court certified a nationwide class seeking relief under ERISA and certified statewide classes under Federal Rule of Civil Procedure Rule 23(b)(3).1 The Kansas class has 479 members. They allege that they were improperly classified as independent contractors rather than employees under the Kansas Wage Payment Act (“KWPA” or “Act”), Kan. Stat. Ann. §§ 44-313 et seq., and that as employees, they are entitled to repayment of all costs and expenses they paid during their time as FedEx employees. They also seek payment of overtime wages.

Cross summary judgment motions presented the question of whether the FedEx drivers are employees or independent contractors under the KWPA. The evidence presented through the competing motions essentially comprised a stipulated record revolving around a form Operating Agreement FedEx entered with each of the class members and certain FedEx work practices. * * *

Twenty-one cases are on appeal. They present substantially the same issue: whether the district court erred by deciding as a matter of law that the certified classes of plaintiffs were independent contractors and thus could not prevail on their claims. Each case, however, arises under a different state’s substantive law. The parties proposed that we begin with the Craig appeal and stay the remaining appeals, proceeding as the district court did. We suspended briefing in the other appeals pending further order and now address the Craig appeal. * * *

Although we are presented with a particular contract and specific facts and circumstances, this appeal requires an interpretation of the meaning of “employee” under the KWPA in light of the Kansas public policy of protecting workers’ rights to their wages and benefits. Under these circumstances, we believe that the Kansas Supreme Court is in a better position than we to say what Kansas law is and should have the first opportunity to address the issues before us. Certification would further the interests of cooperative federalism.

We respectfully request the Kansas Supreme Court, in an exercise of its sound discretion, to answer the following certified questions:

1. Given the undisputed facts presented to the district court in this case, are the plaintiff drivers employees of FedEx as a matter of law under the KWPA?

2. Drivers can acquire more than one service area from FedEx. See 734 F. Supp. 2d at 574. Is the answer to the preceding question different for plaintiff drivers who have more than one service area?

We invite reformulation of the questions presented, if necessary, and nothing in this certification should be read to limit the scope of the inquiry to be undertaken by the Kansas Supreme Court. Further proceedings in this court are stayed while this matter is under consideration by that court.

The clerk of this court shall transmit the briefs and appendices in this case as well as a copy of this opinion under official seal to the Kansas Supreme Court, and at that court’s request, will transmit the full record.

QUESTIONS CERTIFIED.

Posted by Marcia Oddi on July 12, 2012 11:21 AM
Posted to Ind. (7th Cir.) Decisions