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FedEx drivers were illegally misclassified as independent contractors for years despite being treated like employees of the company, the Kansas Supreme Court found on Friday. The ruling moves FedEx Ground employees around the country a few steps closer to collecting hundreds of millions of dollars in back pay.
From the late 1990s through the first decade of the 2000s, FedEx set contract agreements with delivery and pickup drivers in order to avoid the higher costs associated with making the drivers full employees. Independent contractors are not protected by the same labor laws as payroll employees. The contracts allowed FedEx to bill drivers for their uniforms and equipment and protected the company from having to pay overtime when drivers cracked the 40 hour weekly mark.