From Hierarchies to Markets: FedEx Drivers and the Work Contract as Institutional Marker

Abstract

Judges are often called upon today to determine whether certain workers are "employees" or "independent contractors." The distinction is important, because only employees have rights under most statutes regulating work, including wage and hour and antidiscrimination law. Too often judges exclude workers from statutory protection who resemble what scholars have described as "typical" employees-long-term, full-time workers with set wages and routinized responsibilities within a large firm. To explain how courts reach these counterintuitive results, the article examines recent decisions finding that FedEx delivery drivers are independent contractors rather than employees. The article finds that instability in the legal distinction between employees and independent contractors is embedded within the employment contract itself, in the law's attempt to construe the legal relations of master and servant as a "contract." By merging contractual formation and performance, this attempt creates two doctrinal ambiguities. By manipulating these ambiguities, the courts transformed some of the same vulnerabilities that place the drivers within the policy concerns of collective bargaining and wage and hour law into evidence of their autonomy. The courts also attempted to reconcile the awkward fit of master-servant authority and contract by constructing the written contract that drivers sign as an institutional marker of non-employment. The attempt to encase master-servant authority in contract also destabilizes distinctions between firms and markets. The FedEx decisions marshal this instability to redefine a firm, as conceptualized by major economic theories of the firm, as a market. They INTRODUCTIONMost times when we receive a package delivery, whether it's from UPS, FedEx, or the Postal Service, it looks like the drivers are pretty much doing the same work. We track the package online or receive email updates regarding the delivery date. The doorbell rings. Outside is a deliveryman, neatly groomed, in uniform, and sporting an ID badge and the company logo. He is courteous as he hands you the package and perhaps requests your signature. As he turns to return to a recognizable truck, he says, "Have a nice day."You might find it difficult to believe that, according to FedEx, its drivers are not employees, but independent contractors-even entrepreneurs. You might also find it difficult to believe that the employment status of FedEx drivers is a contested legal issue, and has been for decades.The distinction between employees and independent contractors is important, because only employees have rights under most statutes regulating work, including wage and hour, antidiscrimination, and collective bargaining law. Only employers have obligations under these laws, such as paying unemployment insurance premiums or payroll taxes. 8/12/2015]From Hierarchies to Markets 3 DRAFT-DO NOT CITE employees of its independent contractors and not of FedEx.2 By relying on these classifications, FedEx has frustrated drivers' attempts to unionize un...

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