FedEx drivers get tentative $13.3M ERISA settlement

A proposed workplace-benefits settlement of more than $13.3 million for Federal Express drivers who were wrongly classified as contractors rather than employees has been approved by an Indiana federal judge overseeing a nationwide docket of employment suits against the delivery service.

Indiana Northern District Judge Robert L. Miller, Jr.’s order issued Wednesday comes as a result of mediation that could end a suit originally filed in Kansas in 2004 and expanded more than a decade ago to a nationwide class action. According to the order, class members would receive on average about $197, but individual payouts would range from about $10 to about $765.

The suit, Craig, et al v. FedEx Ground Package System Inc., 3:05-cv-00530, consists of a class that includes full-time FedEx Drivers from 2001-2017 who would have been eligible for certain benefits under the Employee Retirement Income Security Act but for their misclassification as contractors rather than full-time employees. The 7th Circuit Court of Appeals ruled in Craig in 2015 that the drivers were employees rather than contractors.

Under the proposed $13.325 million settlement:

• About $4.5 million would go to a life insurance fund to resolve claims for life insurance benefits;

• Slightly more than $4.1 million would go toward a general settlement fund to resolve medical, dental, vision, disability and 401(k) claims during the period;

• A maximum of about $4.38 million — up to 33 percent of the total settlement — would go toward legal fees, and;

• The remainder would go to a reserve fund, administrative, notice, and service award costs.

Miller set a fairness hearing for March 11, 2019, at the district court in South Bend, but before that, class members will have an opportunity to accept or opt out of the proposed settlement. Notices will be mailed to class members by Nov. 5, and anyone wishing to opt out will be required to do so by returning a notice within 30 days of its postmark.

Written objections to the proposed settlement must be filed with the court by Jan. 4, 2019.

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