FedEx Accused of Scheme to Circumvent Labor Laws

Contract work is at the heart of a lawsuit filed by New York attorney general Andrew Cuomo against FedEx. If it proceeds, the lawsuit will raise many of issues associated with untraditional work arrangements, ranging from temporary to part time.

Cuomo alleges that "FedEx uses an 'elaborately constructed scheme' to classify its drivers as independent contractors to circumvent New York labor law." FedEx denies the charges. This conflict occurs at a time in the history of labor in America when employers seek cost efficiency and staffing flexibility by legally defining workers as not permanent full time, entitled to benefits.

The contract arrangement began to become standard in the early 1980s when U.S. business, once top dog in the international marketplace, became impacted by competition because of globalization. Corporate leaders such as then chief executive officer of GE Jack Welch eliminated hundreds of thousands of traditional positions, replacing them with a just-in-time ones with no benefits. Some trend watchers, ranging from Charles Handy to Daniel Pink, see this development as the way of the future.

For those who adjust, they will find that benefits and other services usually available through employment can be purchased for discount fees through outside organizations focused on their professional needs.