North America's Strongest Union

Worker Misclassification

WHEREAS, statistical evidence has proven that the practice of worker misclassification has skyrocketed over the last twenty five years at a rate of 7% increase annually, negatively impacting workers and businesses which play by the rules, and both state and federal governments in that a handful of bad-acting employers receive an unfair advantage over competitors. In fact, studies indicate up to 48% of all independent contractors nationwide may be misclassified employees; and

WHEREAS, workers who are misclassified as independent contactors are stripped of the basic human right to associate with unions and basic workplace protections, including but not limited to the National Labor Relations Act, the Fair Labor Standards Act, OSHA, and even the Americans with Disabilities Act. Additionally, misclassified workers are not protected under state workers’ compensation systems, unemployment insurance, and disability benefits. Most egregiously, these workers are highly unlikely to have any healthcare or retirement benefits due to misclassification; and

WHEREAS, companies which play by the rules and properly classify workers as employees pay their fair share of worker related expenses and, often times, pay up to 25% more in these expenses due to competitors cheating the system and  misclassifying workers; and

WHEREAS, worker misclassification costs federal, state and local governments billions of dollars each year; and

WHEREAS, the most notable bad-acting employer is FedEx Ground, a subsidiary of Federal Express. Over the last fifteen years, the company deceitfully misclassified more than 27,000 current and former drivers throughout the country – who have filed a class-action lawsuit against FedEx Ground – and has thus far been investigated by more than 40 states for this practice; and

WHEREAS, in 2009 and 2010, a bi-partisan group of 20 state Attorneys General investigated the company’s egregious practice of misclassification. Most notably, three Attorneys General claimed the practice to be a “serious injustice” to drivers in their respective states, and as a result forced the company to change its business model throughout the country in hopes of avoiding further scrutiny. Despite these changes, public officials across the country have remained determined to reveal the company’s ongoing abuse of drivers; and

WHEREAS, misclassification also extends beyond FedEx Ground into other industries, most notably in the port trucking, bakery, taxi, and construction industries, among others. Evidence clearly suggested that this practice continues to extend throughout various industries, compromising approximately 12 million workers nationwide.

NOW, THEREFORE, BE IT RESOLVED, that this Twenty-Eighth Convention of the International Brotherhood of Teamsters calls for meaningful legislation to be pursued in states across the country that protects workers from being misclassified by employers. This legislation should include the “ABC” test, which highlights the employer’s day-to-day control of workers in determining whether those individuals should be employees or independent contractors. Such legislation should also include necessary financial and criminal penalties against bad-acting employers to deter them from misclassifying workers. Finally, misclassified workers should also have a private right of action to pursue their individual or collective recourse against these bad-acting employers; and

BE IT FURTHER RESOLVED, that states should be properly-equipped to investigate and appropriately punish bad-acting employers, including a task force of necessary state agencies to investigate instances of misclassification as well as much-needed funding for these task forces to have staffing for thorough and efficient investigations; and

BE IT FURTHER RESOLVED, that states should continue to educate businesses, workers, and the public of the detrimental impact of worker misclassification to ensure the integrity of that state’s tax code, protect workers’ rights, and maintain a competitive business climate; and

BE IT FURTHER RESOLVED, that the Teamsters Union will remain vigilant in highlighting FedEx Ground’s abuse of workers through misclassification under its new business model, known as the “Multi-Route Contractor” model. Under the new model, FedEx Ground clearly maintains day-to-day control over all drivers and therefore continues to improperly classify drivers; and

FINALLY, BE IT FURTHER RESOLVED, that the Teamsters Union will team with public officials and allies to highlight FedEx Ground’s new model, and ensure that FedEx Ground drivers across the country will eventually be properly classified as employees of that company.