The Second District Court of Appeal has affirmed a certification order and trial court finding that FedEx drivers are employees, and affirmed the plaintiffs' right to recover attorneys’ fees, but reversed and remanded the case for reconsideration of the amount and method of calculating those fees, in Estrada v. FedEx Ground Package System, Inc. Three drivers brought this class action against FedEx Ground Package System, Inc., contending that, for the limited purpose of their entitlement to reimbursement for work-related expenses, they were employees, not independent contractors. They sought reimbursement and declaratory and injunctive relief, and obtained class certification for their reimbursement claim.
In a trifurcated trial, the court found the drivers were employees within the meaning of Labor Code § 2802 (Phase I), ordered FedEx to reimburse some (about $5 million, including prejudgment interest) but not all of their expenses (Phase II), granted most of the equitable relief sought by the drivers (Phase III), and ordered FedEx to pay the drivers’ costs and attorneys’ fees (about $12.3 million). This is the third [major]appeal.
In Estrada I, the Court of Appeal held that orders dismissing some potential class members were not appealable, and dismissed the appeal as premature. Estrada v. RPS, Inc. (2005) 125 Cal.App.4th 976. In Estrada II, the Court of Appeal reversed all of the equitable orders, resolving those issues against the drivers and in favor of FedEx. On this appeal, FedEx challenged the trial court’s class certification order, the court’s Phase I finding that the drivers are employees, its Phase II reimbursement awards, and its post-trial attorneys’ fee award. In a cross-appeal, the drivers challenged limitations imposed on the Phase II reimbursement awards and to the pretrial orders dismissing potential class members, which were addressed prematurely in Estrada I.
The Court of Appeal affirmed the finding that the drivers are employees; affirmed the certification order; and affirmed the finding that attorneys’ fees are recoverable. The court reversed the fee award because the amount must be reconsidered, and on the cross-appeal, reversed two orders limiting the scope of reimbursable expenses.
The opinion is of interest to anyone handling class actions, UCL cases or independent contractor determinations. You can download the full opinion in Estrada v. FedEx Ground Package System, Inc. here in pdf or word format.
Comments