Three states may sue FedEx for labor violations

Three U.S. states said on Tuesday they plan to sue FedEx Corp, accusing the second-largest U.S. package delivery company of violating labor laws by illegally classifying drivers as independent contractors rather than employees to save money. The attorneys general of New York, New Jersey and Montana intend to begin litigation against FedEx Ground Package System Inc after October 27, saying the unit of Memphis, Tennessee-based FedEx has caused a "serious injustice" to more than 1,000 drivers in the three states. According to a letter to FedEx Ground released by New York Attorney General Andrew Cuomo, the misclassification causes the drivers to be deprived of workers' compensation coverage and the protection of state anti-discrimination and labor laws. The states said this occurs though FedEx subjects the drivers to strict work rules, down to the colors of their socks, and to thousands of dollars of expenses to buy or lease trucks and use company uniforms and scanners. In addition, the states said FedEx's actions deprive them of tax payments and result in unfair competition.