Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-12-17458/USCOURTS-ca9-12-17458-0/pdf.json

Nature of Suit Code: 790
Nature of Suit: Other Labor Litigation
Cause of Action: 

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

DEAN ALEXANDER; PETER ALLEN;

ALBERT ANAYA; SUZANNE

ANDRADE;JARRETT HENDERSON;

ELY INES; JORGE ISLA; PAUL

INFANTINO; ERIK JEPPSON;

GUPERTINO MAGANA; BERNARD

MENDOZA; JESSE PADILLA; JOEY

RODRIGUEZ; DALE ROSE; ALLAN

ROSS; AGOSTINO SCALERCIO; DEAN

WILEY; ANTHONY YBARRA, on

behalf of themselves and all persons

similarly situated,

Plaintiffs-Appellants,

v.

FEDEX GROUND PACKAGE SYSTEM,

INC., DBA FedEx Home Delivery,

Defendant-Appellee.

No. 12-17458

D.C. No.

3:05-cv-00038-

EMC

DEAN ALEXANDER; PETER ALLEN;

ALBERT ANAYA; SUZANNE

ANDRADE;JARRETT HENDERSON;

ELY INES; JORGE ISLA; PAUL

INFANTINO; ERIK JEPPSON;

GUPERTINO MAGANA; BERNARD

MENDOZA; JESSE PADILLA; JOEY

No. 12-17509

D.C. No.

3:05-cv-00038-

EMC

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2 ALEXANDER V. FEDEX

RODRIGUEZ; DALE ROSE; ALLAN

ROSS; AGOSTINO SCALERCIO; DEAN

WILEY; ANTHONY YBARRA, on

behalf of themselves and all persons

similarly situated,

Plaintiffs-Appellees,

v.

FEDEX GROUND PACKAGE SYSTEM,

INC., DBA FedEx Home Delivery,

Defendant-Appellant.

OPINION

Appeal from the United States District Court

for the Northern District of California

Edward M. Chen, District Judge, Presiding

Argued and Submitted

March 6, 2014—Portland, Oregon

Filed August 27, 2014

Before: Alfred T. Goodwin, Stephen S. Trott,

and William A. Fletcher, Circuit Judges.

Opinion by Judge W. Fletcher;

Concurrence by Judge Trott

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ALEXANDER V. FEDEX 3

SUMMARY*

California Law

The panel reversed the Multidistrict Litigation Court’s

grant of summary judgment entered in favor of FedEx

Ground Package System, Inc., and its denial of a plaintiff

class of FedEx drivers’ motion for partial summary judgment

in a class action alleging that FedEx drivers in California

were employees rather than independent contractors.

The panel held that the plaintiff FedEx drivers were

employees as a matter of law under California’s right-tocontrol test. The panel remanded to the district court with

instructions to enter summary judgment for plaintiffs on the

question of employment status.

Judge Trott, joined by Judge Goodwin, concurred. Judge

Trott wrote that FedEx’s labeling of the drivers as

“independent contractors” in its OperatingAgreement did not

conclusively make them so.

COUNSEL

Beth A. Ross (argued), Aaron D. Kaufmann, and Elizabeth C.

Morris, Leonard Cardner, LLP, Oakland, California; and

Ellen Lake, Oakland, California, for PlaintiffsAppellants/Cross-Appellees.

* This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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4 ALEXANDER V. FEDEX

Jonathan Hacker (argued), O’Melveny & Myers LLP,

Washington, D.C.; Anton Metlitsky, O’Melveny & Myers

LLP, New York, New York; Chris Hollinger, O’Melveny &

Myers LLP, San Francisco, California; Carolyn Kubota and

Robert Swerdlow, O’Melveny & Myers LLP, Los Angeles,

California, for Defendant-Appellee/Cross-Appellant.

Richard Pianka, Arlington, Virginia, for Amici Curiae

American Trucking Associations, Inc., and California

Trucking Association.

OPINION

W. FLETCHER, Circuit Judge:

As a central part of its business, FedEx Ground Package

System, Inc. (“FedEx”), contracts with drivers to deliver

packages to its customers. The drivers must wear FedEx

uniforms, drive FedEx-approved vehicles, and groom

themselves according to FedEx’s appearance standards. 

FedEx tells its drivers what packages to deliver, on what

days, and at what times. Although drivers may operate

multiple delivery routes and hire third parties to help perform

their work, they may do so only with FedEx’s consent.

FedEx contends its drivers are independent contractors

under California law. Plaintiffs, a class of FedEx drivers in

California, contend they are employees. We agree with

plaintiffs.

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ALEXANDER V. FEDEX 5

I. Background

A. Factual Background

Named plaintiffs represent a class comprising

approximately 2300 individuals who were full-time delivery

drivers for FedEx in California between 2000 and 2007. 

Plaintiff class members worked for FedEx’s two operating

divisions, FedEx Ground and FedEx Home Delivery. FedEx

Ground deals primarily with business-to-business deliveries,

while FedEx Home Delivery deals primarily with residential

deliveries. The differences between the two divisions do not

matter to this appeal.

FedEx characterizes its drivers as independent

contractors. FedEx’s Operating Agreement (“OA”) governs

its relationship with the drivers. The OA’s “Background

Statement” provides:

[T]his Agreement will set forth the mutual

business objectives of the two parties . . . but

the manner and means of reaching these

results are within the discretion of the

[driver], and no officer or employee of FedEx

. . . shall have the authority to impose any

term or condition on [the driver] . . . which is

contrary to this understanding.

A provision of the OA titled “Discretion of Contractor to

Determine Method and Means of Meeting Business

Objectives,” states:

[N]o officer, agent or employee of FedEx . . .

shall have the authority to direct [the driver]

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6 ALEXANDER V. FEDEX

as to the manner or means employed . . . . For

example, no officer, agent or employee of

FedEx . . . shall have the authority to prescribe

hours of work, whether or when the [driver] is

to take breaks, what route the [driver] is to

follow, or other details of performance.

FedEx’s relationship with its drivers also is governed by

various policies and procedures prescribed by FedEx.

1. Job Requirements

The OA requires FedEx drivers to pick up and deliver

packages within their assigned “Primary Service Area[s].” 

Drivers must deliver packages every day that FedEx is open

for business, and must deliver every package they are

assigned each day. They must deliver each package within a

specific window of time negotiated between FedEx and its

customers. After each delivery, drivers must use an

electronic scanner to send data about the delivery to FedEx. 

FedEx does not require drivers to follow specific delivery

routes. However, FedEx tells its managers to design and

recommend to its drivers routes that will “reduce travel time”

and “minimize expenses and maximize earnings and service.”

FedEx does not expressly dictate working hours, but it

structures drivers’ workloads to ensure that they work

between 9.5 and 11 hours every working day. If a driver’s

manager determines that the driver has more work than he or

she “can reasonably be expected to handle” in a 9.5 to 11-

hour day, the manager may reassign part of the driver’s

workload to other drivers. Drivers are compensated

according to a somewhat complex formula that includes perday and per-stop components. Drivers are expected to arrive

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ALEXANDER V. FEDEX 7

at their delivery terminals each morning, and they are not

supposed to leave the terminal until all of their packages are

available for pick-up. FedEx instructs managers to make sure

that drivers properly fill out their paperwork and prepare their

packages for delivery. Each terminal sets a time by which all

drivers must return at the end of the day. If drivers want their

trucks loaded by FedEx’s package-handlers, they must leave

their trucks at the terminal overnight.

The OA gives FedEx the authority to “reconfigure” a

driver’s service area upon five days’ written notice. Drivers

have the right to propose a plan to avoid reconfiguration,

“using means satisfactory to FedEx.” FedEx “may, in its sole

discretion,” reject a plan that does not “provide reasonable

means to continue” the driver’s service area. Should a

driver’s service area be reconfigured in such a way that the

driver gains customers, FedEx may reduce that driver’s pay

to compensate other drivers who lost customers in the

reconfiguration.

FedEx trains its drivers on how best to perform their job

and to interact with customers. The OA provides that, during

the first 30 days of the contract term, FedEx “shall . . .

familiarize [drivers] with various quality service procedures

developed by FedEx.” The OA requires drivers to conduct

themselves “with integrity and honesty, in a professional

manner, and with proper decorum at all times.” They must

“[f]oster the professional image and good reputation of

FedEx.”

A driver’s managers may conduct up to four ride-along

performance evaluations each year, “to verifythat [the driver]

is meeting the standards of customer service” required by the

OA. Managers are supposed to observe and record small

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8 ALEXANDER V. FEDEX

details about each step of a delivery, including whether a

driver uses a “dolly or cart” to move packages, demonstrates

a “sense of urgency,” and “[p]laces [his or her] keys on [the]

pinky finger of [his or her] non-writing hand” after locking

the delivery vehicle. After finishing a ride-along evaluation,

managers are supposed to give immediate feedback to

drivers about the quality of their work. FedEx contends

in this litigation that this feedback constitutes mere

recommendations that drivers are free either to follow or

disregard.

Drivers must follow FedEx’s “Safe Driving Standards.” 

These standards prohibit many illegal acts, such as “[d]riving

while under the influence of alcohol or drugs” and “[u]sing a

motor vehicle in the commission of a felony.” They also

forbid some legal conduct, including “[d]riving a motor

vehicle in a speed exhibition, contest or drag race” and

“[c]arrying passengers not authorized by FedEx.”

The OA allows drivers to operate more than one vehicle

and route, but only “with the consent of FedEx” and only if

“consistent with the capacity of the [driver’s] terminal.” 

Drivers may also hire third parties to help perform their work. 

Third-party helpers must be “qualified pursuant to applicable

federal, state and municipal safety standards and

[FedEx’s] Safe Driving Standards.” They must be “fully

trained” and must “conform fully” with the OA. Drivers “in

good standing” under the OA may assign their rights and

obligations to replacement drivers, but any such replacement

must be “acceptable to FedEx.”

Drivers enter into the OA for an initial term of one, two,

or three years. At the end of the initial term, the OA provides

for automatic renewal for successive one-year terms if neither

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ALEXANDER V. FEDEX 9

party provides notice of their intent not to renew. The OA

may be terminated (1) by the parties’ mutual agreement;

(2) for cause, including a breach of any provision of the OA;

(3) if FedEx stops doing business or reduces operations in all

or part of the driver’s service area; or (4) upon thirty days’

written notice by the driver. The OA requires drivers to

submit claims for wrongful termination to arbitration.

2. Equipment and Appearance Requirements

FedEx requires its drivers to provide their own vehicles. 

Vehicles must not only meet “all applicable federal, state and

municipal laws and regulations,” but also must be specifically

approved by FedEx. The OA allows FedEx to dictate the

“identifying colors, logos, numbers, marks and insignia” of

the vehicles. All vehicles must be painted “FedEx white,” a

specific shade of Sherwin-Williams paint, or its equivalent. 

They must be marked with the FedEx logo, and “maintained

in a clean and presentable fashion free of body damage and

extraneous markings.” FedEx requires vehicles to have

specific dimensions, and all vehicles must also contain

shelves with specific dimensions. FedEx requires that a

“typical package van” have

two [shelves] per side, full length of the body. 

They should be 24" (-1", +3") deep with a 1"

to 2" pitch and a front lip not to exceed 2"

height. Top shelf to bottom of roof or roof

bow should be 24" minimum. The lower shelf

lip to the bottom of the top shelf should be

24" (+/- 3/4"). Aluminum is the preferred

material, however marine grade plywood is

acceptable.

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10 ALEXANDER V. FEDEX

Managers may refuse to let drivers work if their vehicles do

not meet these requirements.

Drivers must provide maintenance at their own expense

and must “bear all costs and expenses incidental to operation”

of the vehicle. Drivers authorize FedEx to pay for vehicle

licensing, taxes, and fees, and to deduct these costs from the

drivers’ pay. The OA gives FedEx

such exclusive possession, use, and control of

the [vehicle as] required by . . . applicable

regulations, but [FedEx]shall have no right or

authority . . . to operate the [vehicle] for any

purpose (except for incidental yard movement

and positioning) unless the [vehicle] is driven

either by [the driver] or by an operator

engaged by [the driver].

The OA requires that while vehicles are “in the service of

FedEx,” they must be used “exclusively for the carriage of

the goods of FedEx . . . and for no other purpose.” Drivers

may use their vehicles “for other commercial or personal

purposes when [they are] not in the service of FedEx,” but

only if all “identifying numbers, marks, logos and insignia”

are removed or covered up.

FedEx offers a “Business Support Package,” which

provides drivers with uniforms, scanners, and other necessary

equipment. FedEx deducts the cost of the equipment from

drivers’ pay. Purchase of the package is ostensibly optional,

but more than 99 percent of drivers purchase it. The scanners

that drivers must use to send delivery information to FedEx

are not readily available from any other source.

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ALEXANDER V. FEDEX 11

The OA requires drivers to comply with personalappearance standards and wear a FedEx uniform “maintained

in good condition.” The required uniform includes a uniform

shirt with the FedEx logo, uniform pants or shorts, dark shoes

and socks, and, if the driver chooses to wear a jacket or cap,

a uniform jacket and cap with the FedEx logo. Drivers must

keep their “personal appearance consistent with reasonable

standards of good order as . . . promulgated from time to time

by FedEx.” Drivers must be “clean shaven, hair neat and

trimmed, free of body odor.” Managers may refuse to let

drivers work if they are improperly dressed or groomed.

B. Procedural History

This appeal involves a class action originally filed in the

California Superior Court in December 2005 on behalf of a

class of California FedEx drivers, asserting claims for

employment expenses and unpaid wages under the California

Labor Code on the ground that FedEx had improperly

classified the drivers as independent contractors. Plaintiffs

also brought claims under the federal Family and Medical

Leave Act (“FMLA”), which similarly turned on the drivers’

employment status. FedEx removed to the Northern District

of California based on diversity.

Between 2003 and 2009, similar cases were filed against

FedEx in approximately forty states. The Judicial Panel on

Multidistrict Litigation consolidated these FedEx cases for

multidistrict litigation (“MDL”) proceedings in the District

Court for the Northern District of Indiana (“the MDLCourt”). 

Plaintiffs moved for class certification. They represented to

the MDL Court that their claims would rely only on

“common proof applicable to members of the class as whole.” 

The MDL Court certified a class for plaintiffs’ claims under

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12 ALEXANDER V. FEDEX

California law. It declined to certify plaintiffs’ proposed

national FMLA class.

Plaintiffs in all the MDL cases moved for partial

summary judgment, seeking to establish their status as

employees as a matter of law. In most cases, including this

one, FedEx cross-moved for summary judgment. The MDL

Court denied nearly all of the MDL plaintiffs’ motions for

summary judgment and granted nearly all of FedEx’s

motions, holding that plaintiffs were independent contractors

as a matter of law in each state where employment status is

governed by common-law agency principles.

The MDL Court remanded this case to the district court

to resolve the drivers’ claims under the FMLA. Those claims

were settled, and the district court entered final judgment. 

Plaintiffs timely appealed, challenging the MDL Court’s

grant of summary judgment to FedEx on the employment

status issue. FedEx conditionally cross-appealed, arguing

that if we reverse the MDL Court’s grant of summary

judgment to FedEx, we should also reverse the MDL Court’s

class certification decision.

II. Standard of Review

We review de novo the district court’s decision whether

to grant summary judgment, viewing the facts in the light

most favorable to the non-moving party. Fichman v. Media

Ctr., 512 F.3d 1157, 1159 (9th Cir. 2008). “A grant of

summary judgment is appropriate when ‘there is no genuine

dispute as to any material fact and the movant is entitled to

judgment as a matter of law.’” Albino v. Baca, 747 F.3d

1162, 1168 (9th Cir. 2014) (en banc) (quoting Fed. R. Civ. P.

56(a)).

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ALEXANDER V. FEDEX 13

III. Discussion

A. Summary Judgment on Employment Status

The MDL Court granted summary judgment to FedEx,

holding that plaintiffs are independent contractors as a matter

of law. To reach that conclusion, the MDL Court purported

to apply the common law test from S.G. Borello & Sons, Inc.

v. Department of Industrial Relations, 769 P.2d 399 (Cal.

1989), but ultimately focused on the entrepreneurial

opportunities FedEx afforded to plaintiffs. The MDL Court

explained: “the right to control, though a primary

consideration, isn’t dispositive; what is dispositive here is the

drivers’ class-wide ability to own and operate distinct

businesses, own multiple routes, and profit accordingly.” 

Plaintiffs argue that, at a minimum, summary judgment for

FedEx was inappropriate. They argue further that the district

court should have granted their motion for summary

judgment because they are employees as a matter of law. We

agree that plaintiffs are employees as a matter of law. 

Accordingly, we reverse the MDL Court and remand to the

district court with instructions to enter summary judgment for

plaintiffs on the question of employment status.

The parties agree that California law controls this dispute. 

The parties further agree that determinations of employment

status under California law are governed by the multi-factor

test set forth in Borello. “Even if one or two of the individual

factors might suggest an [independent contractor]

relationship, summary judgment is nevertheless proper when

. . . all the factors weighed and considered as a whole

establish . . . an [employment] and not an [independent

contractor relationship.]” Arnold v. Mut. of Omaha Ins. Co.,

135 Cal. Rptr. 3d 213, 221 (Ct. App. 2011).

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14 ALEXANDER V. FEDEX

We conclude that summary judgment for plaintiffs is

appropriate in this case. The facts are largely undisputed. 

FedEx and plaintiffs agree that their working relationship is

controlled by the OA and FedEx’s policies and procedures. 

They dispute only the extent to which those documents give

FedEx the right to control its drivers. In California, the

meaning of a contract such as the OA is a question of law,

unless it is ambiguous and there is “conflicting extrinsic

evidence” from which a jury could resolve the ambiguity in

favor of either party. Scheenstra v. Cal. Dairies, Inc.,

153 Cal. Rptr. 3d 21, 38–39 (Ct. App. 2013). Here, much of

the OA is not ambiguous. To the extent it is ambiguous, the

extrinsic evidence supports a conclusion that FedEx has the

right to control its drivers. Viewing the evidence in the light

most favorable to FedEx, we conclude that plaintiffs are

employees.

B. Right-to-Control Test

California’s right-to-control test requires courts to weigh

a number of factors: “The principal test of an employment

relationship is whether the person to whom service is

rendered has the right to control the manner and means of

accomplishing the result desired.” Borello, 769 P.2d at 404

(quoting Tieberg v. Unemployment Ins. App. Bd., 471 P.2d

975, 977 (Cal. 1970) (alteration and internal quotation marks

omitted)). California courts also consider “several

‘secondary’ indicia of the nature of a service relationship.” 

Id. The right to terminate at will, without cause, is “[s]trong

evidence in support of an employment relationship.” Id.

(quoting Tieberg, 471 P.2d at 979 (internal quotation marks

omitted)). Additional factors include:

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ALEXANDER V. FEDEX 15

(a) whether the one performing services is

engaged in a distinct occupation or business;

(b) the kind of occupation, with reference to

whether, in the locality, the work is usually

done under the direction of the principal or by

a specialist without supervision; (c) the skill

required in the particular occupation;

(d) whether the principal or the worker

supplies the instrumentalities, tools, and the

place of work for the person doing the work;

(e) the length of time for which the services

are to be performed; (f) the method of

payment, whether by the time or by the job;

(g) whether or not the work is a part of the

regular business of the principal; and

(h) whether or not the parties believe they are

creating the relationship of employeremployee.

Id. These factors “[g]enerally . . . cannot be applied

mechanically as separate tests; they are intertwined and their

weight depends often on particular combinations.” Id. at 404

(quoting Germann v. Workers’ Comp. Appeals Bd., 176 Cal.

Rptr. 868, 871 (Ct. App. 1981) (internal quotation marks

omitted)).

1. “Manner and Means”

FedEx argues that the OA creates an independentcontractor relationship. California law is clear that “[t]he

label placed by the parties on their relationship is not

dispositive, and subterfuges are not countenanced.” Id. at

403. What matters is what the contract, in actual effect,

allows or requires. See, e.g., Empire Star Mines Co. v. Cal.

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16 ALEXANDER V. FEDEX

Emp’t Comm’n, 168 P.2d 686, 692 (Cal. 1946) (“If the

employer has the authority to exercise . . . control, whether or

not that right is exercised with respect to all details, an

employer-employee relationship exists.”), overruled on other

grounds by People v. Sims, 651 P.2d 321 (Cal. 1982). The

OA and FedEx’s policies and procedures unambiguously

allow FedEx to exercise a great deal of control over the

manner in which its drivers do their jobs. Therefore, this

factor strongly favors plaintiffs.

First, FedEx can and does control the appearance of its

drivers and their vehicles. FedEx controls its drivers’

clothing from their hats down to their shoes and socks. It

requires drivers to be “clean shaven, hair neat and trimmed,

[and] free of body odor.” FedEx’s detailed appearance

requirements clearly constitute control over its drivers. See

Ruiz v. Affinity Logistics Corp., No. 12-56589, 2014 WL

2695534, at *7 (9th Cir. June 16, 2014) (finding right to

control under California law where a delivery company

controlled “‘every exquisite detail’ of the drivers’

appearance, including the ‘color of their socks’ and ‘the style

of their hair’”); cf. Huggins v. FedEx Ground Package Sys.,

Inc., 592 F.3d 853, 859 (8th Cir. 2010) (holding, under

Missouri law, that FedEx’s appearance requirements “show

the extent of FedEx’s control” over drivers’ work).

FedEx requires drivers to paint their vehicles a specific

shade of white, mark them with the distinctive FedEx logo,

and to keep their vehicles “clean and presentable [and] free of

body damage and extraneous markings.” These requirements

go well beyond those imposed by federal regulations. See 49

C.F.R. § 390.21. FedEx dictates the vehicles’ dimensions,

including the dimensions of their “package shelves” and the

materials from which the shelves are made. Managers may

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ALEXANDER V. FEDEX 17

prevent drivers from working if they are improperly dressed

or groomed, or if their vehicles do not meet specifications.

Second, FedEx can and does control the times its drivers

can work. Although the OA does not allow FedEx to set

specific working hours down to the last minute, it is clear

from the OA that FedEx has a great deal of control over

drivers’ hours. FedEx structures drivers’ workloads so that

they have to work 9.5 to 11 hours every working day. FedEx

argues that, because drivers can hire helpers to do their work

for them, they are free to complete a full day’s work in less

than 9.5 hours. But managers may adjust drivers’ workloads

to ensure that they never have more or less work than can be

done in 9.5 to 11 hours. Drivers are not supposed to leave

their terminals in the morning until all of their packages are

available, and they must return to the terminals no later than

a specified time. If drivers want their vehicles loaded, they

must leave them at the terminal overnight. The combined

effect of these requirements is substantially to define and

constrain the hours that FedEx’s drivers can work.

Third, FedEx can and does control aspects of how and

when drivers deliver their packages. It assigns each driver a

specific service area, which it “may, in its sole discretion,

reconfigure.” It tells drivers what packages they must deliver

and when. It negotiates the delivery window for packages

directly with its customers. The OA requires drivers to

comply with “standards of service,” including requirements

to “[f]oster the professional image and good reputation of

FedEx” and to “conduct all business activities with . . . proper

decorum at all times.”

FedEx notes that there are details of its drivers’ work that

it does not control. For instance, it does not require drivers to

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18 ALEXANDER V. FEDEX

follow specific routes or to deliver packages in a specific

order. Taking the evidence in the light most favorable to

FedEx, it does not require drivers to follow managers’

recommendations after ride-along evaluations. But the rightto-control test does not require absolute control. Employee

status may still be found where “[a] certain amount of . . .

freedom is inherent in the work.” Air Couriers Int’l v. Emp’t

Dev. Dep’t, 59 Cal. Rptr. 3d 37, 44 (Ct. App. 2007); see also

id. at 47 (upholding trial court’s finding that there was “no

inconsistency between employee status and the driver’s

discretion on when to take breaks or vacation”). FedEx’s

lack of control over some parts of its drivers’ jobs does not

counteract the extensive control it does exercise.

FedEx argues that it controls its drivers only with respect

to the results it seeks, not the manner and means in which

drivers achieve those results. See Millsap v. Fed. Express

Corp., 277 Cal. Rptr. 807, 811 (Ct. App. 1991) (“If control

may be exercised only as to the result of the work and not the

means bywhich it is accomplished, an independent contractor

relationship is established.”). We agree with FedEx that

“results,” reasonably understood, refers in this context to

timely and professional delivery of packages. Some but not

all of FedEx’s requirements go to the “results” of its drivers’

work so understood. Most obviously, no reasonable jury

could find that the “results” sought by FedEx includes

detailed specifications as to the delivery driver’s fashion

choices and grooming. See Ruiz, 2014 WL 2695534, at *7 &

n.5. And no reasonable jury could find that the “results”

FedEx seeks include having all of its vehicles containing

shelves built to exactly the same specifications. Other

aspects of FedEx’s control—such as limiting drivers to a

specific service area with specific delivery locations—also

are not merely control of results under California law.

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ALEXANDER V. FEDEX 19

Notably, in Estrada v. FedEx Ground Package System,

Inc., 64 Cal. Rptr. 3d 327 (Ct. App. 2007), the California

Court of Appeal affirmed a trial court’s determination,

following a bench trial, that a class of FedEx drivers, working

under the same OA as plaintiffs in this case during an

overlapping time period, were employees based on “FedEx’s

control over every exquisite detail of the drivers’

performance.” Id. at 336. FedEx attempts to distinguish

Estrada on two grounds. First, the trial court in Estrada

specifically excluded multiple-route drivers from the class,

deciding the question of employment status only with respect

to single-route drivers, whereas here, while limited to drivers

who personally drive full time for FedEx, the class includes

a number of drivers who operate more than one route. 

Second, FedEx contends that “Estrada involved a

fundamentally different evidentiary record.” However, the

OA grants FedEx identical rights to control both single-route

and multiple-route drivers. And while Estrada’s reliance on

specific factual findings by the trial court means that Estrada

is not dispositive here, the Estrada court’s reasoning is

nonetheless apposite.

FedEx argues that the OA gives drivers “flexibility and

entrepreneurial opportunities that no ‘employee’ has.” 

However, in Borello, the California Supreme Court reasoned

that “[a] business entity may not avoid its statutory

obligations by carving up its production process into minute

steps, then asserting that it lacks ‘control’ over the exact

means by which one such step is performed by the

responsible workers.” 769 P.2d at 408. There, S.G. Borello

& Sons, a commercial produce grower, hired agricultural

laborers under written “sharefarmer” agreements. The

agreements recited that the parties deemed themselves

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20 ALEXANDER V. FEDEX

“principal and independent contractor rather than employer

and employee.” Id. at 401.

The sharefarmers agreed to harvest the crop, assisted by

members of their families. They could “contract for the

amount of land they wish[ed] to harvest on a first-come, firstserved basis.” Id. at 402. The sharefarmers were “totally

responsible for the care of the plants in their assigned plots

during the harvest period.” Id. (internal quotation marks

omitted). They were required to furnish their own tools and

their own transportation to and from the field. “The method

and manner of accomplishing” the harvest was left solely to

the sharefarmers, though they agreed to “utilize accepted

agricultural practices in order to provide for the maximum

harvest.” Id. (internal quotation marks omitted).

The sharefarmers set their own hours. They were free to

decide when to pick the crop in order to maximize the profit. 

“Profit incentive [was] the only guaranty of performance and

quality control.” Id. Borello had “no right to discharge a

sharefarmer or his workers during the harvest, and no

recourse if the harvesters abandon[ed] the field.” Id. 

Although the sharefarmers had significant autonomy over the

harvest itself, the California Supreme Court reasoned that

Borello retained “all necessary control over the harvest

portion of its operations,” and held that the sharefarmers were

employees as a matter of law. Id. at 408, 410 (emphasis in

original).

California courts have since applied Borello’s “all

necessary control” test and found employee status in several

cases involving delivery drivers. For example, in JKH

Enterprises, Inc. v. Department of Industrial Relations,

48 Cal. Rptr. 3d 563, 568 (Ct. App. 2006), drivers, who had

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ALEXANDER V. FEDEX 21

acknowledged their independent contractor status in writing

prior to their engagement with JKH, performed courier work,

using their own vehicles to pick up items from JKH’s

customers and delivering the packages to designated

locations.

Other than to satisfy the general

assurances given by JKH to its customers that

their packages w[ould] reach the appropriate

local destination within two to four hours

from pick-up, the . . . drivers [were] not

governed by particular rules and they d[id] not

receive direction from JKH about how to

perform the delivery task or what driving

routes to take.

Id. at 569. The California Court of Appeal found that,

because “JKH retained all necessary control” over the

drivers, substantial evidence supported a finding of an

employee relationship. Id. at 579. Similarly, in Air Couriers,

the Court of Appeal affirmed a trial court’s finding of

employee status based on its conclusion that an employer

retained all necessary control over courier drivers. 59 Cal.

Rptr. 3d at 41–42.

FedEx argues that JKH Enterprises and Air Couriers are

distinguishable on the ground that those cases involved

California’s workers’ compensation laws and thus involved

a statutory presumption of employee status that does not

apply here. But California courts have recognized that “the

burden of proof is on the party attacking the employment

relationship,” Bemis v. People, 240 P.2d 638, 644 (Cal. Dist.

Ct. App. 1952), in a range of cases outside of the workers’

compensation context. See, e.g., Robinson v. George,

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22 ALEXANDER V. FEDEX

105 P.2d 914, 916 (Cal. 1940); Faigin v. Signature Grp.

Holdings, Inc., 150 Cal. Rptr. 3d 123, 133 n.4 (Ct. App.

2012); Lujan v. Minagar, 21 Cal. Rptr. 3d 861, 868 (Ct. App.

2004); see also Narayan v. EGL, Inc., 616 F.3d 895, 900 (9th

Cir. 2010) (holding that once drivers had established a prima

facie case of employment status by coming forward with

evidence that they provided services for the company, the

burden shifted to the company to establish by a

preponderance of the evidence that the drivers were

independent contractors).

The Borello court noted that the “‘control-of-workdetails’ test for determining [employee status] must be

applied with deference to the purposes of the protective

legislation.” 769 P.2d at 406. But the California Supreme

Court does not read Borello to apply only in the context of

workers’ compensation claims. In fact, in Borello itself, the

court stated that its ruling in that case had implications

beyond workers’ compensation laws. Id. at 400. Recently,

in Ayala v. Antelope Valley Newspapers, Inc., 327 P.3d 165

(Cal. 2014), the California Supreme Court recognized the

applicability of Borello’s “all necessary control” test in a

determination of employment status in a suit for wage and

hour protections. Id. at 171. And in Ruiz, we applied

Borello’s “all necessary control” test where a plaintiff raised

a number of claims unrelated to workers’ compensation,

including claims for failure to pay sick leave, vacation,

holiday, and severance wages. 2014 WL 2695534, at *1.

In contrast to the facts in JKH Enterprises and Air

Couriers, in Arnold an insurance company’s nonexclusive

insurance agent “used her own judgment in determining

whom she would solicit for applications for [the company]’s

products, the time, place, and manner in which she would

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ALEXANDER V. FEDEX 23

solicit, and the amount of time she spent soliciting for [the

company]’s products.” 135 Cal. Rptr. 3d at 220 The

California Court of Appeal held on these facts that the agent

was an independent contractor. Id. at 220–21. Similarly, the

California Court of Appeal held in State Compensation

Insurance Fund v. Brown, 38 Cal. Rptr. 2d 98 (Ct. App.

1995), that truck drivers were independent contractors where

they had “complete control over their working conditions and

the manner in which a load is transported (including whether

or not to hire assistants), and [were] entirely free to accept or

reject an assignment without reprisal.” Id. at 105; see also

Millsap, 277 Cal. Rptr. at 811 (holding that a driver was an

independent contractor where he used his own car to deliver

packages, was paid on a “per route” basis, and “[o]ther than

to say ‘be careful’ or to give him directions to a particular

location, . . . [the company] did not instruct [the driver] as to

how to make the deliveries or how to drive his car.”).

FedEx treats its drivers more like the drivers in JKH

Enterprises and Air Couriers than like the insurance agent in

Arnold and the drivers in Brown and Millsap. Indeed, in

manyrespects FedEx exercises greater control over its drivers

than was exercised over the drivers in JKH Enterprises and

Air Couriers. FedEx requires its drivers to load and unload

packages at FedEx terminals every working day. “Such

regular schedules are consistent with employee status and

reflect employer control.” Air Couriers, 59 Cal. Rptr. 3d at

47. FedEx assigns each driver a specified service area and

tells drivers where in their service area to deliver packages. 

FedEx drivers have no control over which packages they

deliver. FedEx “obtain[s] the clients in need of the service

and provid[es] the workers to conduct it,” JKH Enters.,

48 Cal. Rptr. 3d at 579. “Drivers deliver[] packages to

[FedEx]’s customers, not to their own customers. [FedEx]

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24 ALEXANDER V. FEDEX

set[s] the rates charged to customers, bill[s] the customers,

and collect[s] payment.” Air Couriers, 59 Cal. Rptr. 3d at 47;

see also Toyota Motor Sales U.S.A., Inc. v. Superior Ct.,

269 Cal. Rptr. 647, 653 (Ct. App. 1990) (finding a driver to

be an employee where the company “determined what would

be delivered, when and to whom and what price would be

charged”). FedEx pays the drivers on a regular schedule. See

Air Couriers, 59 Cal. Rptr. 3d at 47; JKH Enters., 48 Cal.

Rptr. 3d at 580.

According to FedEx, its drivers’ “entrepreneurial

opportunities”—the ability to take on multiple routes and

vehicles and to hire third-partyhelpers—are inconsistent with

employee status. FedEx relies not on California law for this

argument, but on the D.C. Circuit’s decision in FedEx Home

Delivery v. National Labor Relations Board, 563 F.3d 492

(D.C. Cir. 2009). In FedEx Home Delivery, a divided panel

of the D.C. Circuit reversed an agency decision that FedEx

drivers were employees. Id. at 495. The majority “shift[ed

the] emphasis away from the unwieldy control inquiry,”

asking instead “whether the putative independent contractors

have significant entrepreneurial opportunity for gain or loss.” 

Id. at 497 (alteration in original) (internal quotation marks

omitted). It held that the evidence “favoring a finding the

[drivers] are employees [was] clearlyoutweighed byevidence

of entrepreneurial opportunity.” Id. at 504.

The D.C. Circuit’s decision in FedEx Home Delivery,

even if correct, has no bearing on this case. There is no

indication that California has replaced its longstanding rightto-control test with the new entrepreneurial-opportunities test

developed by the D.C. Circuit. Instead, California cases

indicate that entrepreneurial opportunities do not undermine

a finding of employee status. In Arzate v. Bridge Terminal

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ALEXANDER V. FEDEX 25

Transport, Inc., 121 Cal. Rptr. 3d 400 (Cal. App. 2011), the

California Court of Appeal reversed a trial court’s grant of

summary judgment to the defendant where, as here, the

“plaintiffs drove their own trucks and paid the related

expenses, [and] could have leased more than one truck to

defendant and hired other drivers.” Id. at 405–06. The court

found that these opportunities did not override other factors

in California’s multi-factor analysis such that the drivers were

independent contractors as a matter of law. Id. In Narayan,

we concluded that, where drivers “retained the right to

employ others to assist in performing their contractual

obligations,” but the company had to approve all helpers, this

was indicative of control of the details of the drivers’

performance under California law. 616 F.3d at 902. And in

Ruiz, we found that drivers were employees where the

company “retained ultimate discretion to approve or

disapprove of those helpers and additional drivers.” 2014

WL 2695534, at *8. “[A]pproval was largely based upon

neutral factors, such as background checks required under

federal regulations,” but the drivers nonetheless “did not have

an unrestricted right to choose these persons, which is an

“important right[] [that] would normally inure to a

self-employed contractor.” Id. (alterations in original)

(quoting Borello, 769 P.2d at 408 n.9). Further, “any

additional drivers were subject to the same degree of control

exerted by Affinity over the drivers generally.” Id.

The entrepreneurial opportunities available to FedEx’s

drivers are equivalent to those in Narayan and Ruiz. The OA

allows drivers to operate more than one vehicle or route only

if FedEx consents, and only if doing so is “consistent with the

capacity of the [driver’s]terminal.” Drivers must be “in good

standing” in order to assign their contractual rights, and any

replacement driver must be “acceptable to FedEx.” Nothing

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26 ALEXANDER V. FEDEX

in the OA limits FedEx’s discretion to withhold consent to

additional vehicles or routes, or to decide whether a

replacement driver is “acceptable.” Daniel Sullivan, FedEx’s

founder and CEO until January 2007, testified in his

deposition that FedEx may refuse to let a driver take on

additional routes or sell his route to a third party. He further

testified that FedEx’s senior managers have the authority to

reject proposed replacement drivers based on failure to meet

FedEx standards such as grooming requirements. “The

existence of the right of control and supervision establishes

the existence of an agency relationship.” Ayala, 327 P.3d at

173 (quoting Malloy v. Fong, 232 P.2d 241, 249 (Cal. 1951)

(internal quotation marks omitted)). Whether FedEx ever

exercises its right of refusal is irrelevant; what matters is that

the right exists. See id. (“It is not essential that the right of

control be exercised or that there be actual supervision of the

work of the agent.” (quoting Malloy, 232 P.2d at 249)

(internal quotation marks omitted)). 

2. Secondary Factors

In light of the powerful evidence of FedEx’s right to

control the manner in which drivers perform their work, none

of the remaining right-to-control factors sufficiently favors

FedEx to allow a holding that plaintiffs are independent

contractors. See Borello, 769 P.2d at 404 (identifying

evidence of the right to control as the “principal” factor); JKH

Enters., 48 Cal. Rptr. 3d at 579–80 (holding, where JKH’s

retention of “all necessary control over the operation as a

whole” was, under Borello, “enough to find an employment

relationship,” that no “single factor, either alone or in

combination, mandate[d] a different result”).

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ALEXANDER V. FEDEX 27

The first factor, the right to terminate at will, slightly

favors FedEx. The OA contains an arbitration clause and

does not give FedEx an unqualified right to terminate. Under

California law, the right to discharge at will is “[s]trong

evidence in support of an employment relationship,” Tieberg,

471 P.2d at 979, even though termination for cause is

consistent with both employee and independent contractor

status, see Ruiz, 2014 WL 2695534, at *11 (“[T]he parties’

mutual termination provision is consistent with either an

employer-employee or independent contractorrelationship.”);

cf. Foley v. Interactive Data Corp., 765 P.2d 373, 376 (Cal.

1988) (noting that, while California Labor Code § 2922

provides a presumption of at-will employment when

employment is for no specified term, “[t]his presumption may

be superseded by a contract, express or implied, limiting the

employer’s right to discharge the employee”).

FedEx’s right under the OA to terminate its drivers, while

broad, is somewhat constrained. FedEx may fire a driver for

any “breach[] or fail[ure] to perform . . . contractual

obligations,” which would cover, for example, any failure to

act “with proper decorum at all times,” or to “foster the

professional image and good reputation of FedEx.” We

conclude that this factor does not favor FedEx enough to

allow a finding that its drivers are independent contractors. 

See Toyota Motor Sales, 269 Cal. Rptr. at 653 (“The real test

[for ascertaining whether the right to control exists] has been

said to be whether the employee was subject to the

employer’s orders and control and was liable to be discharged

for disobedience or misconduct.” (internal quotation marks

omitted)).

The second factor, distinct occupation or business, favors

plaintiffs. As the California Court of Appeal reasoned in

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28 ALEXANDER V. FEDEX

Estrada, “the work performed by the drivers is wholly

integrated into FedEx’s operation. The drivers look like

FedEx employees, act like FedEx employees, [and] are paid

like FedEx employees.” 64 Cal. Rptr. 3d at 334. “The

customers are FedEx’s customers, not the drivers’

customers.” Id. at 336–37. While the drivers have

opportunities to expand their businesses by taking on

additional routes and hiring helpers, these opportunities

themselves are only available subject to FedEx’s business

needs.

The third factor, whether the work is performed under the

principal’s direction, slightly favors plaintiffs. As explained

above, although drivers retain freedom to determine several

aspects of their day-to-day work, FedEx also closely

supervises their work through various methods.

The fourth factor, the skill required in the occupation, also

favors plaintiffs. FedEx drivers “need no experience to get

the job in the first place and [the] only required skill is the

ability to drive.” Id. at 337; see JKH Enters., 48 Cal. Rptr. 3d

at 579 (“[T]he functions performed by the drivers, pick-up

and delivery of papers or packages and driving in between,

did not require a high degree of skill.”).

The fifth factor, the provision of tools and equipment,

slightly favors FedEx. The drivers provide their own vehicles

and are not required to get other equipment from FedEx. On

the other hand, “FedEx is involved in the purchasing process,

providing funds and recommending vendors.” Estrada,

64 Cal. Rptr. 3d at 334. Indeed, the drivers’ scanners are not

readily available anywhere else. Ultimately, the vast majority

of drivers get their other equipment from FedEx. See Ruiz,

2014 WL 2695534, at *10 (holding that, where “Affinity

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ALEXANDER V. FEDEX 29

supplied the drivers with the major tools of the job by

encouraging or requiring that the drivers obtain the tools from

them through paid leasing arrangements,” this factor favored

employee status). Moreover, numerous California cases find

employee status even though the employee provides his own

vehicle or tools. See, e.g., Borello, 769 P.2d at 409; Estrada,

64 Cal. Rptr. 3d at 331; Air Couriers, 59 Cal. Rptr. 3d at 47;

JKH Enters., 48 Cal. Rptr. 3d at 569; Toyota Motor Sales,

269 Cal. Rptr. at 654.

The sixth factor, length of time for performance of

services, favors plaintiffs. Drivers enter into the OA for a

term of one to three years. At the end of the initial term, the

OA provides for automatic renewal for successive one-year

terms if there is no notice of non-renewal by either party.

[T]he length and indefinite nature of the

plaintiff [d]rivers’ tenure with [FedEx] . . .

point toward an employment relationship. . . . 

This was not a circumstance where a

contractor was hired to perform a specific task

for a defined period of time. There was no

contemplated end to the service relationship at

the time that the plaintiff [d]rivers began

working for [FedEx].

Narayan, 616 F.3d at 903; see also Antelope Valley Press v.

Poizner, 75 Cal. Rptr. 3d 887, 900 (2008) (“[T]he notion that

an independent contractor is someone hired to achieve a

specific result that is attainable within a finite period of time

. . . is at odds with carriers who are engaged in prolonged

service to [an employer].”); Air Couriers, 59 Cal. Rptr. 3d at

47 (holding that, where many drivers had worked for “years,”

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30 ALEXANDER V. FEDEX

these “lengthy tenures” were “inconsistent with independent

contractor status”).

The seventh factor, method of payment, is neutral. FedEx

pays its drivers according to a complicated scheme that

includes fixed and variable components and ties payment to,

among other things, packages, stops, and the ratio of driving

time to deliveries. This payment method cannot easily be

compared to either hourly payment (which favors employee

status) or per-job payment (which favors independent

contractor status). However, “[w]here, as here, there is ample

independent evidence that the employer has the right to

control the actual details of the [employee’s] work . . . , the

fact that . . . the employee is paid by the job rather than by the

hour appears to be of minute consequence.” Tieberg,

471 P.2d at 982; see also Varisco v. Gateway Sci. & Eng’g,

Inc., 83 Cal. Rptr. 3d 393, 398 (Ct. App. 2008) (“An hourly

rate traditionally indicated an employment relationship but

independent contractors are now commonly paid on that

basis.” (citation omitted)); Germann, 176 Cal. Rptr. at 874

(“[P]ayment may be measured by time, by the piece, or by

successful completion of the service, instead of a fixed salary,

and still constitute employee wages if other factors indicate

an employer-employee relationship.” (internal quotation

marks omitted)).

The eighth factor, whether the work is part of the

principal’s regular business, favors plaintiffs. The work that

the drivers perform, the pickup and delivery of packages, is

“essential to FedEx’s core business.” Estrada, 64 Cal. Rptr.

3d at 334; see also Huggins, 592 F.3d at 859 (noting that

drivers “performed work that was the essence of FedEx’s

business, namely, ‘transportation and delivery service’”).

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ALEXANDER V. FEDEX 31

The final factor, the parties’ beliefs, slightly favors

FedEx. The OA expressly identifies the relationship as one

of an independent contractor, and disclaims any authority on

FedEx’s part to direct drivers as to the manner or means of

their work. This disclaimer is belied by provisions of the OA

and FedEx’s policies and procedures, which in fact allow

FedEx to control significant aspects of the drivers’ day-to-day

jobs, and it therefore provides only limited insight into the

drivers’ state of mind. However, when all justifiable

inferences are drawn in FedEx’s favor, see Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 255 (1986), the OA’s

statement of independent contractor status is evidence that the

drivers believed that they were entering such a relationship. 

Ultimately, though, “neither [FedEx]’s nor the drivers’ own

perception of their relationship as one of independent

contracting” is dispositive. See JKH Enters., 48 Cal. Rptr. 3d

at 580; Grant v. Woods, 139 Cal. Rptr. 533, 537 (Ct. App.

1977) (“[T]he belief of the parties as to the legal effect of

their relationship is not controlling if as a matter of law a

different relationship exists.”).

3. Summary

Viewing the evidence in the light most favorable to

FedEx, the OA grants FedEx a broad right to control the

manner in which its drivers’ perform their work. The most

important factor of the right-to-control test thus strongly

favors employee status. The other factors do not strongly

favor either employee status or independent contractor status. 

Accordingly, we hold that plaintiffs are employees as a matter

of law under California’s right-to-control test. 

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32 ALEXANDER V. FEDEX

C. FedEx’s Conditional Cross-Appeal

FedEx argues that we should decertify the class if—but

only if—we rely on individualized evidence in reversing the

MDL Court’s grant of summary judgment to FedEx. Our

decision does not rely on any individualized evidence. 

FedEx’s argument is therefore unavailing.

Conclusion

We hold that plaintiffs are employees as a matter of law

under California’s right-to-control test. Accordingly, we

reverse both the MDL Court’s grant of summary judgment to

FedEx and its denial of plaintiffs’ motion for partial summary

judgment. We remand to the district court with instructions

to enter summary judgment for plaintiffs on the question of

employment status.

REVERSED and REMANDED.

TROTT, Circuit Judge, with whom GOODWIN, Circuit

Judge, joins, concurring:

The resolution of this case as a matter of granting

summary judgment to the drivers is far from simple, as the

length and complexityof Judge Fletcher’s meticulous opinion

demonstrates. It has not been made easier by FedEx’s brief,

which, by quoting part of a sentence from an admission —

but not all of it — creates a rosier picture of the drivers’ state

of mind than the record supports.

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ALEXANDER V. FEDEX 33

FedEx represents in its brief, and I quote, that each of the

drivers personally “intended to enter an independent

contractor relationship with [FedEx].” What the brief omits

are the important words that precede this language and the

final sentence in the drivers’ response. This is what the

drivers admitted:

Named plaintiffs admit that on the day

they signed their original Operating

Agreement, in reliance on Defendants’

statements that they would be an independent

contractor, they intended to enter into an

independent contractor relationship with

Defendants. Named Plaintiffs deny, however,

that an independent contractor relationship

ever, in fact, existed between them and

Defendants.

Response to Request for Admission No. 1 (emphasis

supplied). The meaning of this response read as a whole is

that the drivers believed they were becoming true

independent contractors, but the reality they encountered was

different.

We also find the actual meaning of the drivers’

“admission” in this case in a companion case, Slayman v.

FedEx Ground Package System, Inc., Nos. 12-35525 and 12-

35559. In that case, drivers pursued a personal claim in

Oregon district court for rescission, claiming fraud. In

denying summary judgment to both parties on the sole ground

that the claim was not timely, the district court noted that

“[d]eposition testimony indicate[d] that soon after becoming

a driver, each plaintiff believed that the [Operating

Agreement], despite its express terms, did not give the driver

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34 ALEXANDER V. FEDEX

the control he expected as an independent contractor.” 

Slayman v. FedEx Ground Package Sys., Inc.,

3:05-cv-1127-HZ, 2012 WL 1902601, at *7 (D. Or. May 25,

2012). All that glittered turned out not to be gold.

Once again, we learn the regrettable lesson that the basic

information we require to resolve a controversy is not always

found in the parties’ briefs, but in the ungilded record itself. 

A good rule in this business is to verify before you trust. 

Lawyers would be well advised not to elide the truth, the

whole truth, and nothing but the truth.

Judge Fletcher’s analysis of the demands of California

law is correct. Although Estrada went to the Court of Appeal

after a contested trial — not on a grant of summary judgment

to the drivers — we would be misguided to ignore what the

California Court of Appeal said in that case, as well as the

particulars of the test set out by the California Supreme Court

in Borello, which does not embrace the “entrepreneurial

opportunities” test, as a gloss or otherwise.

Abraham Lincoln reportedly asked, “If you call a dog’s

tail a leg, how many legs does a dog have?” His answer was,

“Four. Calling a dog’s tail a leg does not make it a leg.” 

Justice Cardozo made the same point in W.B. Worthen Co. v.

Kavanaugh, 295 U.S. 56, 62 (1935), counseling us, when

called upon to characterize a written enactment, to look to the

“underlying reality rather than the form or label.” The

California Supreme Court echoed this wisdom in Borello,

saying that the “label placed by the parties on their

relationship is not dispositive, and subterfuges are not

countenanced.” 769 P.2d at 403. As noted by Judge Fletcher,

“[N]either [FedEx’s] nor the drivers’ own perception of their

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ALEXANDER V. FEDEX 35

relationship as one of independent contracting” is dispositive. 

JKH Enters., Inc., 48 Cal. Rptr. at 580.

Bottom line? Labeling the drivers “independent

contractors” in FedEx’s Operating Agreement does not

conclusively make them so when viewed in the light of

(1) the entire agreement, (2) the rest of the relevant “common

policies and procedures” evidence, and (3) California law. 

As Judge Fletcher points out, the MDL decision to the

contrary relied on an inappropriate consideration: the

entrepreneurial opportunities factor.

Although our decision substantially unravels FedEx’s

business model, FedEx was not entitled to “write around” the

principles and mandates of California Labor Law by

constructing a contract which, after a contested trial, the

California trial court in Estrada called:

[A] brilliantly drafted contract creating the

constraints of an employment arrangement

with [the drivers] in the guise of an

independent contractor model — because

FedEx not only has the right to control, but

has close to absolute control over [the drivers]

based upon interpretation and obfuscation.

Estrada, 64 Cal. Rptr. 3d at 334 (brackets in original)

(internal quotations marks omitted). The Court of Appeal in

that case appropriately called the trial court’s observation an

application of the looks like, walks like, swims like, and

quacks like a duck test. See id. at 335.

Accordingly, I concur in Judge Fletcher’s persuasive

opinion.

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