This particular case analysis looks into a case study involving the Estrada and the FedEx Ground systems. In this case, the court had sought to determine if the drivers working for Federal Express were really independent contractors or employees. The central legal issue raised in the case is whether the federal express drivers’ are employees of the company or they are independent contractors.
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The relevant facts that define the problem and bear upon the decision are based on the operating agreement issued before working for FedEx. After being accepted as a driver, the pickup and delivery operating agreement is usually nonnegotiable (Vogel, 2007). The drivers operate under the system of FedEx system.
On the basis of the existing operating agreement, the driver in question is not an employee of the company, but an independent contractor. It also states that the drivers cannot be imposed any terms or condition although there is a clause that allows the termination of a contract. The agreement also allows the driver to increase the working area and cooperate with FedEx customers and employees.
The agreement that follows requires the driver to keep the FedEx professional image, wear the FedEx uniforms, be presentable, have reports inspected by the FedEx and adhere to the expected standards of the company among others.
There are several facts and issues in regard to the case of FedEx and Estrada. The drivers of FedEx are allowed to agree to the operating agreement that has various guidelines. Some of the issues raised in the case include right to control that was used but the trial court to rule that the drivers were employees of FedEx Inc. This according to FedEx was insupportable inferences of fact that the court used.
However, based on the facts that FedEx had control through offering uniforms, socks, trucks, paying of their bills, supervision, timetables and schedules, this makes them employees of the company. It is worth noting that independent contractors do not work under supervision of the contracting company and that no company related assets and paraphernalia are used.
The court ruled that indeed the drivers in the trail were FedEx employees and that they were not independent contractors and no indemnifications on expenses were filed. The court based its ruling on section 2802 of the labor code subdivision (a) where law test of employment is applied. It also states that FedEx has no authority in imposition any condition or term. The substantial evidenced in the FedEx case is the control they have on.
The fact that their logo is used, truck, repairs are all done by FedEx makes them employees. Important facts are that FedEx went contrary to its words in the operating agreement and imposed terms and conditions on the drivers. The least important issue is the argument of FedEx that trial court misapplied the test by interpreting ‘right to control part in erroneous manner.
This is because the facts spoke for themselves and negligence cost them. The arguments were that the conduct of FedEx spoke louder than its words. It was also argued that there was tangible evidence than implicated FedEx for having broken the operating agreement.
These include wearing of socks, uniforms, reporting to the supervisors among others which were contradictory. Options available were that FedEx follows the operating agreement and no lawsuits are filed or what it did and faced the axe of the law.
In future, the human resource department shall be obligated to review the operating agreement to avoid legal battles like the one FedEx is faced with. It will also have to implement rules regarding wearing of uniforms by drivers, wearing socks and other items related to FedEx systems that can be used against them in a court of law.
The last implication is to adopt the strategies used by its competitors and have the drivers as employees so as to avoid future lawsuits. Words can “un-do” conduct if they are followed by a given organization.
For example, FedEx operating agreement states that it has’ no authority to impose any term or condition’ and yet it disobeys these words. The company could however undo the conduct of imposing terms and conditions to its drivers. Words can override conduct if the company words go contrary to the conduct.
As a legal counsel of FedEx I would counsel that the intention of “right to control” was not meant to posses the drivers but to ensure uniformity and the image of the company. It was also meant to protect the company and its clients. I would also counsel that during the signing of the operating agreement the drivers agreed with it and none had problem with its provisions on conduct, what to wear, whom to report to, and other issues raised.
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A manager would response in a positive way through setting up a management strategy that would revise the raised operational issues. This would reduce chances of lawsuits in near future. The manager may indulge the organizational lawyer in rephrasing the operating agreement to better the two sides.
Vogel, J. (2007). The Regulation of the Employment Regulations. Estrada v. FedEx Ground Package Systems, In. 58-59.