NJ Objectors Pan 25 Million FedEx Ground Settlement

njdriver

FedEx Browned
The following article is from the New Jersey Law Journal from November 17, 2016



"In a multidistrict litigation accusing FedEx Ground of misclassifying its drivers as independent contractors, all seven New Jersey class representatives in the case have expressed their opposition to a proposed $25 million settlement. The proposed settlement, on behalf of roughly 900 members of a New Jersey class, short-changes class members by $50 million because it fails to account for their claim under the New Jersey Consumer Fraud Act, according to the objectors. What's more, the settlement fails to consider plaintiffs' increased likelihood of success in the case under a 2015 New Jersey Supreme Court ruling in Hargrove v. Sleepy's, in which the court confirms that the "ABC" test applies to such situations, according to the objectors.


The suit, Tofaute v. FedEx Ground Package System, claims that the company fraudulently induced the plaintiffs to purchase their routes and delivery trucks in an illegal shift of the cost of doing business. The plaintiffs also claim they are "micromanaged" by FedEx to the point that they become defacto employees. The U.S. Judicial Panel on Multidistrict Litigation consolidated more than 70 similar cases before U.S. District Judge Robert Miller Jr. of the Northern District of Indiana in 2005. In 2015, the U.S. Court of Appeals for the Seventh Circuit ruled that FedEx drivers are employees and not contractors. That decision followed a 2014 ruling from the U.S. Court of Appeals for the Ninth Circuit that made a similar ruling in cases concerning workers in California and Oregon.


In early 2016, FedEx Ground began to make settlement offers for the 20 state plaintiff groups that remained in the MDL, said David DiSabato of DiSabato & Bouckenooghe in Mendham, who represents the class representatives along with Greg Kohn of Nagel Rice in Roseland. The offers were made from a $240 million settlement fund, he said. A handful of individual class members have objected to their settlement offers, said DiSabato, but he knows of no other case where an entire state delegation of class representatives have opposed the settlement.


The judge granted preliminary approval to the settlement in August, and the seven New Jersey class representatives filed their objection to final approval of the settlement in the New Jersey action on Wednesday. The judge in the case is expected to hold a fairness hearing on the settlement on Jan. 23, 2017. In their objection, the New Jersey class representatives note that the settlement offer to the North Carolina class does include treble damages and attorney fee-shifting, which are elements of the New Jersey Consumer Fraud Act but are excluded from the New Jersey settlement.


The Consumer Fraud Act applies in the present case because "defendants market the opportunity to become an 'independent contractor' to members of the public under what has been held to be a sophisticated nationwide ruse to avoid basic worker protection laws," the objectors said in court papers. DiSabato said the class representatives in the case, "if they believe they are acting in and putting forth the best interests of the class, do not have to represent the class representatives if the class representatives are urging a better settlement."


Robert Harwood of Harwood Feffer in New York and Susan Ellingstad of Lockridge Grindal Nauen in Minneapolis, who are plaintiffs' co-lead counsel, and Anthony Marchetti Jr. of Marchetti Law in Cherry Hill, who is plaintiffs' co-counsel, did not return calls seeking comment.
Alison Fox of Faegre Baker Daniels in South Bend, Indiana, represented FedEx Ground, and she did not return calls seeking comment."


From The National Law Review


"In a recent decision with significant implications for New Jersey employers, the New Jersey Supreme Court held in Hargrove v. Sleepy’s that the so-called “ABC” test governs the classification of employees and independent contractors under two key New Jersey employment statutes: the Wage Payment Law (“WPL”), which governs the timing and mode of payment of employee wages, and Wage and Hour Law (“WHL”), which obligates employers to pay minimum wages and overtime.

In its decision, which it issued on January 14, 2015, the Court declined to adopt the test used to determine employee-independent contractor classifications under the Fair Labor Standards Act (“FLSA”) – the arguably more nebulous “economic realities” test – on the basis that the ABC test provides greater predictability and income security for workers. As a result, employers must separately analyze whether to classify workers as employees or independent contractors under the WPL and WHL, on the one hand, and under the FLSA, on the other.

The ABC test begins with the presumption that a worker is an employee, thereby placing on the employer the burden of proving otherwise. In order to do so – i.e., in order to demonstrate that the worker is actually an independent contractor – the employer must satisfy all three prongs of the ABC test. Specifically, it must show that:

The worker “has been and will continue to be free from control or direction over the

performance” of the work he or she is responsible for;

Such work “is either outside the usual course of business for which [it] is performed, or that [it] is performed outside of all the places of business of the enterprise for which [it] is performed”; and

The worker “is customarily engaged in an independently established trade, occupation, profession or business...”


OK, a lot of stuff to read, but what does it all mean for you if you are or were a FedEx driver in the State of NJ?

It means quite simply that the 7 named plaintiffs representing the class in NJ feel the current settlement offer from FedEx is woefully insufficient, as it does not include any damages for the alleged violation of New Jersey's Consumer Fraud Act by FedEx. They want the Consumer Fraud Act portion of our original claim to be litigated to seek damages for those alleged violations. If successful, total damage awards would increase by reason of the application of the treble damages standard.

Additionally, under the practice of attorney fee-shifting, the losing party is responsible to pay the legal costs of the winning side.

I happen to know each of the 7 named plaintiffs in the NJ Class Action. They are some of the most determined, involved, and vocal advocates you can find, ANYWHERE! They have been slogging it out since late 2004 and are totally committed to getting the class members every penny they are entitled to.

I know many of you may not have followed this lawsuit closely, or at all, and are just happy to get any amount as soon as possible. I can understand that to some extent, especially in light of the poor state of our economy the last number of years, but ponder this;

Each of these men lost their livelihoods over their convictions in this matter, and as they scrambled looking for other work to keep the lights on and the bills paid, they spent countless hours in attorney's offices, giving depositions, travelling to various legal venues, and keeping you up-to-date on the suit's progress on this site and elsewhere. Each one of them understood and fully accepted the responsibility of being the Class Representatives, and are intent on seeing this all the way through, wherever that may lead. Every FedEx driver in NJ owes them a great deal of thanks and appreciation.

So, they and I are asking for your patience. Heck, it's only been 13 years; what's a few months or a year more going to hurt. Some of you are still driving for FedEx, and the recovery amounts for you will be much greater than any recovery they will receive, seeing as they all were terminated early in this struggle. The clock stopped ticking for them a long time ago, yet they carry on with the knowledge that they serve as worthy and formidable ambassadors.

I ask that each NJ driver sign the objection letter and send it.

OBJECTION TO PROPOSED SETTLEMENT

MICHAEL TOFAUTE, ET AL. v. FEDEX GROUND PACKAGE SYSTEM, INC.,
CIVIL NO. 3:05-CV-00595-RLM-MGG

TO:

Clerk of the Court
United States District Court
For The Northern District of Indiana 204 South Main Street
South Bend, IN 46601

Robert I. Harwood HARWOOD FEFFER, LLP 488 Madison Ave., 8th Floor New York, NY 10022

Scott Voelz, Esq. O’MELVENY & MYERS LLP 400 South Hope Street
18th Floor
Los Angeles, CA 90071


My name is ___________________________. I am a member of the New Jersey Class in the above matter. I reside at __________________________________, and my phone number is ______________.
I object to the proposed settlement of the New Jersey action because the settlement does not provide enough value to the Class Members. The original notice said that the average recovery would be over $71,000 per driver. Now the notice says that was wrong and the average recovery is only $19,000. I now object to that lower amount. Also, the notice now says that all seven of the New Jersey Class Representatives do not agree to the settlement. Those seven drivers are responsible for protecting the best interests of the New Jersey Class. If they do not agree to the settlement, I don’t agree either, and the settlement should not be approved.

Dated: _________________________________
[Name / Signature]


Copy and paste this objection letter into your word processor and mail a copy to each of the three addresses at the top of the letter. If you don't have a computer or a way to print the letter out, Private Message me (njdriver) or Yogus at www.fedexaminer.com. We will make sure you get what you need. Letters must be received to the Court by March 1, 2017. There will be a Fairness Hearing conducted by Judge Miller on March 14, 2017. He must approve the objection for this to move forward. If you are a NJ FedEx driver, former or current, or you know a driver, please instruct them to this site or print out copies of this letter and give it to them, or again, Private Message us. The more letters received by the Court, the greater our chances the Judge will allow this objection to move forward.

Now is your opportunity to make your voice heard. Now is your opportunity to do something that will, in the long run, be more economically rewarding for you and your families. Your objection letters will not be shared with FedEx, so you don't have to fear retaliation if you are a current driver.

DO IT! DO IT NOW!

On behalf of the Class Representatives and myself,

THANK YOU!!!
_________________
I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them - Thomas Jefferson
 

bacha29

Well-Known Member
Every named plaintiff in the other states involved with the settlement need to take notice of what NJ plaintiffs are doing become more proactive and look to see if there are any similar rulings in their states that would support an objection to the settlement proposal in their state.
 

dmac1

Well-Known Member
Thank you for posting NJ. I hope that going forward, the New Jersey objections become a model for plaintiffs in the other states to follow. I wish this had happened before the Oregon case was settled. All they were concerned with were the minor illegal wage deductions, and ignored the other claims.
 

njdriver

FedEx Browned
Thank you for posting NJ. I hope that going forward, the New Jersey objections become a model for plaintiffs in the other states to follow. I wish this had happened before the Oregon case was settled. All they were concerned with were the minor illegal wage deductions, and ignored the other claims.

Hey dmac,

It's been a long time, for sure.

Hopefully the judge will allow the objection to move forward, although it might take some oral argument. As has been the case, if the objection goes forward, FedEx will put up some bluster and then eventually settle out the claim. We believe the argument that the CFA was indeed violated is a just one, and it will be nice to see it actually litigated in court.

I'll be updating as I hear any new information.

Hope all is well with you and yours.

Regards, nj
 

njdriver

FedEx Browned
The key
Thank you for posting NJ. I hope that going forward, the New Jersey objections become a model for plaintiffs in the other states to follow. I wish this had happened before the Oregon case was settled. All they were concerned with were the minor illegal wage deductions, and ignored the other claims.

The key is for all of the named plaintiffs in any of the states that were remanded and part of the settlement to be of one mind. Not too sure at this point if all of them have to object or if a majority will be sufficient. To bolster that effort, it is important to get as many drivers in that state to fill out an objection as well. In our case, the legal team drafted a single objection form so that any driver could fill it out, sign it and mail it to the various addresses.

We'll see.
 

bacha29

Well-Known Member
The key


The key is for all of the named plaintiffs in any of the states that were remanded and part of the settlement to be of one mind. Not too sure at this point if all of them have to object or if a majority will be sufficient. To bolster that effort, it is important to get as many drivers in that state to fill out an objection as well. In our case, the legal team drafted a single objection form so that any driver could fill it out, sign it and mail it to the various addresses.

We'll see.
The other states need to sit up and take notice. Given that the average payout per contractor is small why not go all or nothing? That's not likely to happen. In my state the lead counsel Leonard Carder clearly wants to wash their hands of the matter but not before walking away with the maximum allowable fee.
 

OrioN

double tap o da horn dooshbag
So this affects only the Nj drivers, current and former? But, anyone can fill that out and mail it?
 

bacha29

Well-Known Member
This seems odd. @dvalleyjim was very pleased with his settlement. Why is X being cheap in NJ?
The CA settlement was widely reported to be 227 million but only 240 million for the entire 20 state East Coast MDL settlement. The outrage despite being late is beginning to build and that is what it will take. The judge won't care how mad you get if you don't speak up and have specific points upon which to base your objection.
 

OrioN

double tap o da horn dooshbag
So this affects only the Nj drivers, current and former? But, anyone can fill that out and mail it?

So I want to do my part, but this is just for the nj peeps?

Are u getting the word out thru Craig's list or other venues besides that old fedexaminer site?
 

bacha29

Well-Known Member
So I want to do my part, but this is just for the nj peeps?

Are u getting the word out thru Craig's list or other venues besides that old fedexaminer site?
It would appear that the "class" is limited to people who were signed on as " independent contractors" from the years 2001 through 2007 .
 

dmac1

Well-Known Member
The CA settlement was widely reported to be 227 million but only 240 million for the entire 20 state East Coast MDL settlement. The outrage despite being late is beginning to build and that is what it will take. The judge won't care how mad you get if you don't speak up and have specific points upon which to base your objection.

When the case was sent back to states, instead of remaining consolidated, state laws became what governed claims that could be made. I do know that California has some of the best legal protections for employees and that is a major reason they got a larger settlement.

And states where the case was originally filed assuming a common case settled in federal court may have not included claims they would have made if they had known it was going to be in state court. I know the ERISA claims are federal, so when settled in state court, those seem to have been dropped.

If the above situation happened, it may now be too late to amend the original claims to maximize state claims that could have been made 15 years ago. I know that I wanted all my wages to be subject to social security, increasing my retirement/disability earnings. I don't know if I can go back to 2001 and amend my tax return based on the state court finding that I was an employee. Over 30 or more years of retirement, an extra $100-$200 a month in Social Security income would add up.

Another problem is that any award is going to be taxable income for income tax purposes for most people, further reducing the real value of any settlement.

Maybe, if the settlement isn't determined to be fair in one state, new attorneys would be willing to take on a national case again.
 

bacha29

Well-Known Member
When the case was sent back to states, instead of remaining consolidated, state laws became what governed claims that could be made. I do know that California has some of the best legal protections for employees and that is a major reason they got a larger settlement.

And states where the case was originally filed assuming a common case settled in federal court may have not included claims they would have made if they had known it was going to be in state court. I know the ERISA claims are federal, so when settled in state court, those seem to have been dropped.

If the above situation happened, it may now be too late to amend the original claims to maximize state claims that could have been made 15 years ago. I know that I wanted all my wages to be subject to social security, increasing my retirement/disability earnings. I don't know if I can go back to 2001 and amend my tax return based on the state court finding that I was an employee. Over 30 or more years of retirement, an extra $100-$200 a month in Social Security income would add up.

Another problem is that any award is going to be taxable income for income tax purposes for most people, further reducing the real value of any settlement.

Maybe, if the settlement isn't determined to be fair in one state, new attorneys would be willing to take on a national case again.
Thank you. Indications are X will have succeeded in it's efforts to delay , motion and appeal this thing until it goes away at minimal cost. Sadly it will no doubt embolden them to take a more belligerent approach toward the contractors who remain. I've got a feeling that those of us who got out when we did are not going to miss much.
 

njdriver

FedEx Browned
Thank you. Indications are X will have succeeded in it's efforts to delay , motion and appeal this thing until it goes away at minimal cost. Sadly it will no doubt embolden them to take a more belligerent approach toward the contractors who remain. I've got a feeling that those of us who got out when we did are not going to miss much.

FedEx succeeding in delays or motions is an expected part of any litigation process which has this much at stake. Much of what eventually happens is partly based on how financially armed plaintiff's lawyers are. I would surmise, many, if not most of them have nowhere near the deep pockets FedEx has, and that is why many of these cases reach settlement instead of being litigated. Additionally, our legal agreement, and I'd gather most legal agreements, give lawyers the right to settle on behalf of plaintiffs if they felt any settlement offer was the best they could get.

That, in itself, brings with it another aspect.

Our fate, or any plaintiff's fate who signed agreements with similar wording, now hinges on other factors.

Is a settlement offer really the BEST we could do?

Does the legal team feel a bit overwhelmed fighting against such a major player?

Do they just want to settle to ensure certain money for the plaintiffs as well as themselves now as opposed to losing at trial?

This is where the metal meets the road. I would much rather risk any settlement award in exchange for litigating this in a NJ Court. Not only would a successful outcome result in more money paid out to class members, but more importantly, it now becomes part of the judicial record which could help others in similar circumstances, against any NJ employer down the road.

THAT would have a much greater impact shaping how other or future employers treat their workers, and that's something to be proud of long after the dust has settled here.

And, as dmac stated, the variability and strength of each states worker protection laws also has a major part to play. The class representatives in NJ are objecting because proving FedEx violated NJ's Consumer Fraud Act could dwarf the 25 million offer currently on the table. That was one of the grounds our lawyers included in the original filing, so we don't have to go through any further legal gymnastics to have that portion of our claim heard.

Although the objection will have to be approved by Judge Miller in March, we feel pretty confident he will allow the process to move forward.
 

bacha29

Well-Known Member
Thank you and I hope that all the plaintiffs named and otherwise in all affected states wake up to what's going on in NJ and take the same position. Roll the dice win or lose rather than crawling off like a dog that's been beat too much.
 

OrioN

double tap o da horn dooshbag
So I don't need to send out that letter?

Guess I'll just cross my fingers n hope for those seven NJeans ~ are they trying to delay it until those guys n gals are in a nursing home?
 

dmac1

Well-Known Member
I'd like you to win on the fraud issue, but I'd be concerned that most of the class wasn't defrauded in the same way as the representatives of the class. Where I worked, most of those coming in after 2002 or 2003 didn't get the same promises fedex was making earlier. In my terminal, most of the new contractors coming in either bought from existing contractors, or were former contractor's drivers if fedex expanded.

I'd look at whether the misclassification itself could be proven to be fraud. I know that the earlier recruitment meetings fedex held were nothing but lies however. If under NJ law, misclassification itself CAN be fraud, it might be worth going further, but if not, or if it would worth little unless intent, and damages due to misclassification, it might not be smart to go on.

I hope you guys can get some honest legal opinions that you can trust to answer these questions before getting railroaded. I know the nine original plaintiffs got totally screwed on multiple levels, and hope that your claims can be included in claims the rest of the class can make too. Attorneys told me(too late) that many of my claims weren't claims the rest of the class could make, and thus couldn't be considered.
 
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