The FedEx driver who sued and won - FedEx Ground drivers are hired as contractors, forced to buy their own vans for $17,000, pay for equipment and uniforms and frequently docked for lost/delayed packages
Reggie Gray thought working for FedEx was his ticket to a better life.
It turned out to be anything but: His years as a driver for FedEx Ground ended with him filing for bankruptcy and taking the company to court.
Gray is one of the thousands of FedEx(FDX) drivers who have sued the company for classifying them as contractors, rather than employees. Many, including Gray, have won.
"We all signed up for what we thought was the American dream," said Gray. "We received the exact opposite. It was a really bad deal."
The FedEx Ground division, created in 2000, delivers small packages to homes and businesses nationwide. But its army of 32,500 uniformed drivers, managers and affiliated workers are classified as contractors, a controversial policy that allows FedEx to save on health benefits, unemployment insurance, retirement accounts and overtime pay, among other things.
"This is an intentional policy on the part of FedEx Ground to deny drivers their rights as employees," said Erin Johansson, research director at Jobs with Justice, a labor rights group.
For Gray, it all started when he left his job in 2002 as a letter carrier with the U.S. Postal Service in Missouri, and signed a contract with FedEx Ground. He thought it would be a great way to start his own independent business with the backing of a major brand.
But Gray quickly realized he wasn't really independent. In fact, FedEx controlled almost all the aspects of his business, even though he had to put up a lot of his own money.
For Gray had to purchase his delivery route for $5,000. He bought his own van for $17,000. FedEx later made him to buy another vehicle for $11,000 and hire a second driver when his route got so busy that one van wasn't enough to deliver all the packages. The vehicles needed constant maintenance -- oil changes, brakes, transmission and radiator replacements -- and all came out of his own pocket.
He paid for FedEx uniforms and decals for his vans, company mapping software and also leased a FedEx scanner for the package bar codes. He also had to pay for Department of Transportation inspections and random drug tests the company required.
Gray said FedEx managers in the terminal where he worked hounded him about the condition of the tires on his van and the conduct of a driver he hired to help him with his route.
His supervisors constantly threatened to revoke his contract and docked his pay with inflated "claims" for lost packages. In one case, he said the company charged him $1,600 for a $400 box of vitamins that he failed to deliver.
The debts piled up and Gray was forced to file bankruptcy in 2008. The financial turmoil took a toll on his marriage, which ended in divorce. He almost lost his house.
"This whole ordeal cost me a lot, it really did," said Gray. "Financially, it was a huge, huge hit. And the pressure of that weight was crushing."