FedEx: They're Employees. No, They're Not - Business Week For years, shipping giant FedEx (FDX) has been at the center of this fracas because it treats 12,000 package deliverers in its FedEx Ground Div. as contractors. The company's current situation illustrates how murky the legal waters on this issue can get. On Oct. 20 the attorneys general of New York, New Jersey, and Montana threatened to sue FedEx if it doesn't reclassify the 12,000 delivery people as full-time employees. The states say they are owed millions in payroll taxes and that FedEx workers deserve fringe benefits befitting full-time employees. But just 10 days later the IRS announced that it was reversing a $319 million tax assessment against FedEx that had been based on the allegation that the company misclassified drivers as contractors. The IRS won't explain its action—and FedEx won't comment—but for federal tax purposes the drivers now appear to be independent contractors after all.