NLRB "Operational Freedom" Guidelines 2019

Discussion in 'FedEx Discussions' started by bacha29, Feb 1, 2019.

  1. bacha29

    bacha29 Well-Known Member

    The NLRB has released a new set of guidelines that is designed to provide a more broader or narrower depending on how you look it definition of what is an "independent contractor" and is in the opinion of some directed more toward the package industries use of them than Class A owner operators. On the surface it looks like it might have the potential to become an unsettling new factor in the XG model.

    One can only read it and then see what XG has to say about it and what measures if any it plans to take in response .Whatever new powers and autonomy the new guidelines may afford XG contractors it appears unlikely that they are in any way positioned to use them to their advantage. Too much debt, too subservient to offer any resistance to anything XG decides to do them.... That much has never changed and likely never will.
  2. XEQaF

    XEQaF Member

  3. bacha29

    bacha29 Well-Known Member

    My take on it:
    It would appear that the ruling is directed at Bezos and his so called "Amazon Delivery Partners" con game and may require a complete revision of the model or drop it all together. One of the everyday impacts of the ruling I have heard is that the trucking company can no longer make you buy a truck that is entirely based on the company's specifications with the company logo on it and they can no longer order you to wear a company uniform. Didn't see where they couldn't pay you to wear one if agreement to do so is reached.

    As for XG here's what I see happening:
    1. A rapid conversion to ISP/CSP in those states that haven't already gone over possibly as little as a few weeks notice.
    2. The single routes who remain and haven't accepted the terms or were not a recognized class member in the multi state class action settlement might
    have grounds for a new round of class action lawsuits.

    3. It would appear that the days of this is when you start, this is when you stop, this is what you drive, this is what you wear, this is where you go, this
    is how you do it may be coming to an end along with any talk of turning Express over to route contractors.

    4. Outside of the book value of the trucks the only value the contractor holds is his proprietary rights an intangible asset and even that doesn't even offer
    protected territory and if it did it would only be for the life of the contract and that can be revised and amended in any way the company sees fit.
    Combined with the new ruling which may require a less captive arrangement may in turn result in the opening up of service territories to outside owner
    operators who have their own authority.

    5. With the potential for equity erosion given the ruling the time for a contractor to sell may never be better than it is right now.
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  4. XEQaF

    XEQaF Member

    It will definitely be an interesting time to see how this plays out. It may be tied up in the legal system for sometime before significant changes start to roll. You can bet that top execs are wheeling strategies to keep the cash cow lucrative for themselves.

    My thought was that X can not afford to give up that much control to other entities especially being tied to their brand. I could see your point on #4. I felt the best thing they could do is systematically try to merge all "ISP/CSPs" under one sole entity, then X would buy the controlling shares of that company. Perhaps a wild theory, I don't know. Or they would farm out the authority to operate under Canadian jurisdiction and maybe somehow that avoids NLRB rulings?? That's me being wildly speculative.
  5. bacha29

    bacha29 Well-Known Member

    The most impressive part of the ruling is the tongue lashing it gave X . Simply put this was a "give you an inch and you take a mile" from the standpoint of the 2014 ruling that gave X some leeway on how they applied the independent contractor model but they abused it so badly and took such liberties with it that it honked off the board so badly that they withdrew the 2014 ruling and went back to an older definition which would appear to reign in some of those abuses.

    The question is does the repeal of the 2014 ruling overturn the out of court class action settlement that was reached a couple of years afterward whereby X did not have to admit any liability or wrong doing.
  6. bacha29

    bacha29 Well-Known Member

    P.S. All i can say is:......get in the fast lane Grandma.....The bingo game is ready to roll!
  7. XEQaF

    XEQaF Member

    And won't that always be the scheme to take a little more by finding interesting wording in a contract or never ending addendums or pushing unwritten policies (changing rules on the fly) to skirt the rulings on the model and go back to their original intent.

    I don't think the 2014 ruling can be overturn but certainly could be reopened for examination once again. Get that dabber out Grandma!
  8. bbsam

    bbsam Moderator Staff Member

    Depending on what kind of teeth this has under our illustrious regulation hating president, if I were Mr. Smith, is quietly put in a call to Mr. Bezos.
  9. bacha29

    bacha29 Well-Known Member

    That's a good point. X made their money on their ability to maul the living crap out of the 2014 guidelines that by and large were written specifically with them in mind Now that 's been withdrawn they may have to sue the NLRB forcing a reinstatement of the 2014 guidelines. If they can't get them reinstated and the old guidelines remain in place then it's anybody's game and the labor law lawyers will be licking their chops.
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  10. dmac1

    dmac1 Active Member

    You seem to be mixing up the driver and the ISP. The ISP isn't required to wear uniforms, and the logos/uniforms/etc are 'optional' for the driver based on what the ISP tells them to do. And it may already be part of the contracts that ISPs have that fedex pays them to use fedex logos or uniforms, making it 'voluntary' on paper.

    Granted, any one who owns and drives may still be easily determined to be an employee, if you mean another ten years of litigation is easy. The ISP makes it more of a practical issue than a strictly leagal issue. There are so many fewer ISPs that it will be hard to get an attorney to even consider filing a lawsuit, considering the limited class number, the length of time a suit would take, and the limited damages.

    From a practical matter, fedex has made it safe for them to violate labor laws.

    The model will only fall apart if/when drivers hired by ISPs get disgruntled in large enough number to make a class action suit attractive to lawyers. It seems likely that any lawsuit against ISPs by drivers will include fedex as co-employers. I would bet that fedex has already paid claims against ISPs whose drivers may have caused injury or property damage.

    Amazon may have some issue hiring managers as contractors more openly. But Amazon is not actually in the delivery business like fedex is, so they have that going for them. But again, even with Amazon requiring purchase of Amazon vans, etc, and all the 'assistance' they give the ADP, there are so few ADPs that it makes a class action unlikely. If someone only invests $10,000 to get started, how much would potential damages be? Money is what moves 'justice' and I don't see enough money in it for the question to ever come up before the NLRB without a years long battle.

    Unless the teamsters get to actively trying to unionize both ADP drivers and ISP drivers, neither fedex nor Amazon need to be very worried. And both have plenty of money to slow things to a crawl, and to make it expensive to challenge them. And at this point, the ISP has too much to lose to put up any argument. After all, fedex doesn't 'sell' the business opportunity like Amazon does, even with the relatively low entry price for an ADP.
  11. bacha29

    bacha29 Well-Known Member

    All I can do is to tell you to go to the NLRB site and here's the case number.....16-RC-010963.
  12. XEQaF

    XEQaF Member

    When you factor the determinants laid out in the common law test or identifying if entrepreneurism exists in the model, X really straddles both sides. It goes further than wearing a uniform or displaying the logo. We all know the control X has on all aspects of what a contractor does, we all have the stories.
    In reality they aren't in the "delivery business". They are in the distribution business. The contractor is in the delivery business. They would really have to choose a Franchise model or simply buy the delivery business as a separate entity to avoid the inevitable years and years of litigation and cases that this will produce
  13. dmac1

    dmac1 Active Member

    But fedex IS in the delivery business. Ever since fedex was created, fedex has been delivering packages. Creating (or buying) a different division (Ground/RPS) doesn't eliminate that fact. Buying a company because it uses 'contractors' didn't eliminate express employees, and in fact, it was questioned whether even RPS 'contractors' should have been called employees.

    Fedex ground straddles both sides INTENTIONALLY knowing how long any litigation would take, and knowing that even if they eventually lose, they will have made more money by skirting the rules.

    As I said before, with fedex having the clear intent to make part of an ISP who MUST have multiple routes, it is really a moot point whether drivers are employees. We already know that drivers are employees under the ISP model, we know the ISP model is going to be national, and we know that fedex intends to prohibit ISPs from driving unless they create a corporate structure where even the ISP is an employee of the ISP corporation if he wants to drive. With fedex liberalizing sales of areas, there IS entrepreneurial opportunity for the ISP, at least on paper. The restrictions on an ISP possibly selling off all but one route, and driving it himself will be rare, and thus not even a case to consider. The NLRB might find that one driver to be an employee, but it would not apply across the board.

    The ONLY real issue in the future is whether fedex is a co-employer, which would help unionization, and whether the unions will target ISPs with enough drivers to make it worth a unionization drive.

    And the NLRB just reversed a decision or maybe just made it harder for a corporation to be named as a co-employer of their franchisees. Whether some decision would be made that an ISP is really a franchisee and subject to those rules, or is some other type of business relationship will maybe determine whether ISP drivers are employers or co-employers or maybe even if the ISP relationship is some form of employment.

    But there is NO question that the drivers are, or will very soon ALL be employees, so ANY rulings by the NLRB, or in court regarding what happened in the past are irrelevant in discussions on the future of fedex.
  14. oldrps

    oldrps Member

    FedEx could argue that FedEx Ground, which is a separate company in the FedEx portfolio, is a package sortation company. FedEx Ground does not have employees that transport packages that I have ever heard of. They have contractors that move them; from shippers to FedEx Facility, FedEx facility to customer, or from one FedEx facility to another. FedEx Services, another company in the FedEx portfolio, sells transportation services.
  15. dmac1

    dmac1 Active Member

    The only reason that it ever mattered if fedex was a delivery service or not was during the question of whether ground drivers were employees. It now doesn't matter if fedex ground is a delivery business or not because very soon all drivers WILL be employees. You and bacha are arguing a moot point.
  16. Star B

    Star B White Lightening

    That could be argued against considering Express employees are forced to handle Ground packages in dropboxes as all dropboxes are now marked "Accepts both Ground and Express packages"
  17. Old Man Jingles

    Old Man Jingles Rat out of a cage

  18. 59 Dano

    59 Dano I just want to make friends!

    It would be a dumb argument. Doesn't change that Ground (as explained by oldrps) sorts the packages and contractors deliver them. Express is paid by Ground for the Ground packages that are tendered to Express.
  19. bacha29

    bacha29 Well-Known Member

    Needless to say that the drivers of ISP/CSP contractors are already employees of the respective contractors. In the case of S-Corps the "president" is required to pay themselves a "reasonable" salary and therefore as a matter of law should not be prohibited from driving a route if they choose and some small scale contractors drive one on a daily basis because there other routes don't make enough for the contractor to live on despite XG's dislike for them doing so.

    So when you say that all drivers will be employees my question is: employees of who?
    With so many contractors today are "suits" absentee's just sitting back counting up the money there probably will be little action taken by them regarding the matter As long as they make money and never run out of low cost unsuspecting labor most won't bother or much less care about anything the NLRB does.
  20. dmac1

    dmac1 Active Member

    Doesn't matter who they are employed by. There won't be any big push by anyone to change the status quo. Only a big union seeking to spend many years and many millions could change anything. A few drivers of an ISP might try to organize, or maybe some of every ISP in a terminal and could be successful against some or all of the ISPs, but the ISP doesn't have any resources to pay union benefits of wages. So the ISP would either 1:hire scabs or 2:fail to service his routes, and lose his contract. Those drivers would be out of a job, and the current NLRB wouldn't step in to say fedex was a co-employer.

    The NLRB is going to deny a unions claim that the drivers are fedex employees, so the unions would need to organize each ISPs drivers separately. A union might even get more than half a terminals drivers voting to unionize but depending on how the vote is spread out, maybe only a small % ISPs actually face a loss to the union. Kind of like how Hillary won the general election but lost the presidency because of where the votes were.

    In the unlikely event that fedex stepped in directly and fired a ISP who had drivers trying to unionize, that ISP can't make much of a legal claim for damages. The ISP is going to lose his ability to service the contract sooner or later anyway when facing a unionization effort, so fedex has no reason to step in. Other contractor/ISPs won't step in to join any legal fight- they have too much invested at risk. And the ISP is partly designed to make it unattractive to the unions to try to organize drivers if they have to organize one ISP at a time. It could MAYBE be done, but very expensive and very long term.

    The unions would be more likely to target an Amazon ADP if they do end up with 30-60 routes requiring maybe 100 employees.

    There is no real point in talking about whether drivers are employees anymore. They ARE employees. Moot point, as I said, and who employs them is moot too. They have the same rights and legal protections that every employee has already. The NLRB won't be involved unless a unionization effort is somehow thwarted by fedex.

    Fedex will likely just go ahead and payoff any liability a driver might cause if the ISP is unable to pay to keep it out of the courts. For example- an employee of an ISP with a criminal background, or bad driving record slips through the system and kills a busload of kids in an accident, or forces his way into a customers home on a delivery and rapes a woman, fedex could and should be held liable. They will probably pay it off rather than fight to prove they shouldn't be liable. It's already been found in court that fedex has used this model to avoid liability and confuse the issue.

    Fedex saves so much now with this model, that an occasional payoff to protect it means little. Attorneys don't want to fight a class action just to prove some claim of employment status for ISPs. They learned their lesson with the last class actions that went on for for at least 12 years.