UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW HAMPSHIRE

Robert Gennell, Jr., et al.

 v. Case No. 05-cv-145-PB 

Opinion No. 2014 DNH 056

FedEx Corp., et al.

MEMORANDUM AND ORDER

The plaintiffs in this long-running dispute are a class of 

drivers based in New Hampshire who worked for defendant FedEx 

Ground Package System, Inc. (“FedEx”).

1 Plaintiffs claim, among 

other things, that they are entitled to be reimbursed for workrelated expenses pursuant to section 275:57(I) of the New 

Hampshire Revised Statutes. This Memorandum and Order resolves 

the parties’ cross-motions for summary judgment addressing the 

drivers’ reimbursement claim. 

I. BACKGROUND

In a prior order, I described the relationship between 

FedEx and its drivers as it existed during the class period. 

See Gennell v. FedEx Ground Package Sys., Inc., 2013 DNH 110, 2-

 

1 FedEx Ground Package System, Inc. is a subsidiary of FedEx 

Corporation. Some of the drivers that comprise the class worked 

for FedEx Home Delivery, a division of FedEx Ground. 

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6. As relevant here, each driver entered into a standard-form

“Operating Agreement” (“OA”) with FedEx. See Doc. No. 80-1. 

The OA requires each driver to purchase and bear “all costs and 

expenses incidental to operation” of their delivery vehicles, 

including the cost of fuel, maintenance, insurance, taxes, 

tolls, licenses, and other work-related expenses. Id. 

The drivers agreed to the terms of the OA in order to 

obtain:

the advantage of operating within a system that will 

provide access to national accounts and the benefits 

of added revenues associated with shipments picked up 

and delivered by other contractors throughout the

FedEx Ground system. In order to get that advantage,

[the driver] is willing to commit to provide daily 

pick-up and delivery service, and to conduct his/her 

business so that it can be identified as being part of 

the FedEx Ground system.

Id. FedEx paid each driver a weekly “settlement” payment “for 

services provided” pursuant to the OA. Id. A driver’s total 

weekly settlement payment was calculated according to a formula

that included individual payments for stops made; for packages 

handled; for each day that a qualified, uniformed driver 

provided a clean, properly maintained vehicle; for each day that 

a driver picked up and delivered packages in a sparsely 

populated area; for each day that a driver participated in

FedEx’s “Flex Program”; for each mile driven each day in excess 

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of 200 miles; and for each mile driven when the fuel price per 

gallon exceeded a specific threshold. Id.

II. STANDARD OF REVIEW

Summary judgment is appropriate when the record reveals “no 

genuine dispute as to any material fact and the movant is 

entitled to judgment as a matter of law.” Fed. R. Civ. P. 

56(a). An issue is considered genuine if the evidence allows a 

reasonable jury to resolve the point in favor of the nonmoving 

party, and a fact is considered material if it “is one ‘that 

might affect the outcome of the suit under the governing law.’” 

United States v. One Parcel of Real Prop. with Bldgs., 960 F.2d 

200, 204 (1st Cir. 1992) (quoting Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 248 (1986)). In ruling on a motion for 

summary judgment, I examine the evidence in the light most 

favorable to the nonmoving party. Navarro v. Pfizer Corp., 261 

F.3d 90, 94 (1st Cir. 2001). 

The party moving for summary judgment bears the initial 

burden of identifying the portions of the record it believes 

demonstrate an absence of disputed material facts. Celotex

Corp. v. Catrett, 477 U.S. 317, 323 (1986). In determining what 

constitutes a material fact, “we safely can ignore ‘conclusory 

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allegations, improbable inferences, and unsupported 

speculation.’” Carroll v. Xerox Corp., 294 F.3d 231, 237 (1st 

Cir. 2002) (quoting Medina–Munoz v. R.J. Reynolds Tobacco Co., 

896 F.2d 5, 8 (1st Cir. 1990)). On cross motions for summary 

judgment, the standard of review is applied to each motion 

separately. See Am. Home Assurance Co. v. AGM Marine

Contractors, Inc., 467 F.3d 810, 812 (1st Cir. 2006).

III. ANALYSIS

The drivers claim that FedEx must reimburse them for 

certain expenses that the drivers agreed to assume in the OA. 

They base their claim on section 275:57(I) of the New Hampshire 

Revised Statutes (the “Reimbursement Statute”),

2

which provides:

 

2 The drivers alternatively claim - for the first time in their 

renewed motion for summary judgment - that they are also 

entitled to reimbursement pursuant to section 275:43(I, V) of 

the New Hampshire Revised Statutes. That section states that 

“[e]very employer shall pay all wages due to employees within 8 

days . . . after expiration of the week in which the work is

performed . . . .” It also provides that “payment of employee 

expenses, when such benefits are a matter of employment practice 

or policy, or both, shall be considered wages . . . when due.” 

To the extent this claim constitutes a motion to amend the 

drivers’ third amended complaint, I deny it on the ground that 

the proposed amendment would be futile. See Platten v. HG Berm.

Exempted Ltd., 437 F.3d 118, 132 (1st Cir. 2006) (denial of a 

motion to amend is warranted if the amended complaint fails to 

allege a viable claim). It is clear for all the reasons 

discussed below that reimbursement of the claimed expenses in 

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An employee who incurs expenses in connection with his 

or her employment and at the request of the employer, 

except those expenses normally borne by the employee

as a precondition of employment, which are not paid

for by wages, cash advance, or other means from the

employer, shall be reimbursed for the payment of the 

expenses within 30 days of the presentation by the 

employee of proof of payment.

FedEx responds by invoking the exception in the statute for 

expenses “paid for by wages, cash advance, or other means.”3 The 

assumptions underlying FedEx’s interpretation of the exception 

are: (1) the Reimbursement Statute does not require an employer 

to reimburse an employee for expenses that are “paid for” by 

“wages”; (2) the “other means” by which an employer can pay for 

expenses and thereby avoid the duty to reimburse encompasses 

means of payment similar to “wages,” see, e.g., State v.

 

this case was never “a matter of employment practice or policy.” 

See N.H. Rev. Stat. Ann. § 275:43; Doc. No. 80-1.

3 FedEx also relies on the exception for “expenses normally borne 

by the employee as a precondition of employment.” This 

exception appears to have been added to the statute to exempt 

expenses that are not expressly assumed by an employee but that 

are typically borne by employees in that business as a matter of 

custom or practice. See Work Session on S.B. 402 before the H. 

Subcomm. on Labor, Indus. & Rehabilitative Servs., 2000 Gen. 

Ct., 157th Sess. (N.H. Mar. 16, 2000) (statement of Rep. 

Whittier) (“Concerns were expressed about allowing an employee 

to bring an action against his employer for expenses that were 

normally borne by the employee. Rep. Clegg cited the example of 

a mechanics [sic] tools. An amendment will be drafted.”). I 

need not determine whether this exception applies here because 

the drivers expressly agreed to assume the expenses at issue in 

the OA.

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Beauchemin, 161 N.H. 654, 658 (2011) (“[W]here specific words in 

a statute follow [or precede] general ones, the general words 

are construed to embrace only objects similar in nature to those 

enumerated by the specific words.” (quoting State v. Breed, 159 

N.H. 61, 65 (2009))); and (3) a payment that an employer makes 

to a statutory employee4 in exchange for an agreement to perform 

services and assume related expenses is subject to the exception 

because it is a means of payment similar to the payment of

expenses with “wages.” After proposing its interpretation of 

the exception, FedEx argues that the drivers are not entitled to 

be reimbursed for their expenses because the payments they 

received pursuant to the OA are the “other means” by which they 

were paid for their expenses.

The drivers attack both FedEx’s interpretation of the 

exception and its attempt to apply the exception to the facts of 

this case. They concede that a worker classified as an employee 

under both statute and common law would have no right to 

reimbursement if he or she were to accept payment from an 

 

4 In a prior ruling, the multidistrict litigation transferee 

court held that the drivers are “independent contractors” at 

common law but “employees” under certain state statutes, 

including the Reimbursement Statute. In re FedEx Ground Package

Sys., Inc., 758 F. Supp. 2d 638, 698 (N.D. Ind. 2010). I refer 

to employees who have this status as “statutory employees.” 

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employer in exchange for agreeing to assume work-related 

expenses.5 The drivers argue, however, that FedEx has 

misinterpreted the exception in this case because it does not 

apply at all to statutory employees who are classified as 

independent contractors under the common law and who are 

characterized as such by their employers. They also contend

that FedEx’s argument fails even if it has correctly interpreted 

the statute because the payments they received pursuant to the 

OA were expressly made solely for “services” and were never 

intended to serve as reimbursement for expenses. I find neither 

argument persuasive. 

A. The Reimbursement Statute

The New Hampshire Supreme Court takes a common sense 

approach to statutory interpretation. Words are given their 

plain and ordinary meaning unless context suggests otherwise. 

Appeal of the Local Gov’t Ctr., Inc., No. 2012-729, 2014 WL 

92992, at *7 (N.H. Jan. 10, 2014). The statute is construed as 

 

5 See Doc. No. 79 (citing Doc. No. 72) (“The Court also posited a 

hypothetical in which an employee negotiates with an employer 

for an [sic] $5 an hour in salary in exchange for bringing in 

his own laptop to work but later asks to be reimbursed under 

§ 275:57 for the cost of the computer. Under that hypothetical, 

the employee’s purchase would be included within the ‘other 

means’ exception in § 275:57, and there would be no right of 

recovery.”).

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written and the court “will not consider what the legislature 

might have said or add language that the legislature did not see 

fit to include.” Id. A court will “not consider words and 

phrases in isolation, but rather within the context of the 

statute as a whole.” Id.

In this case, the applicability of the exception turns both 

on whether the expenses at issue were “paid for” by FedEx and, 

if so, whether the means of payment qualifies as an “other 

means.”

1. “Paid For”

The exception exempts work-related expenses assumed by an 

employee that are paid for by the employer via one of the 

designated categories of payment. It is generally understood 

that something is “paid for” when the payor “[p]erform[s] . . . 

an obligation by the delivery of money or some other valuable 

thing accepted in partial or full discharge of the obligation.” 

See Black’s Law Dictionary 1243 (9th ed. 2009) (defining 

“payment”). In this case, the parties’ obligations were 

established by contract and the “valuable thing[s]” accepted by

the drivers were their settlement payments.6 Thus, in cases such 

 

6 The drivers received other valuable things from FedEx as well, 

including “access to national accounts” and association with the 

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as this where payments are made pursuant to contract, the term

“paid for” may be aptly restated in contract parlance as

“incurred in consideration for.” See id. at 347 

(“Consideration” is “[s]omething . . . bargained for and 

received by a promisor from a promisee; that which motivates a 

person to do something . . . .”); see also Appeal of Lorden, 134 

N.H. 594, 600 (1991) (“[T]he traditional definition of 

‘consideration’[ is] ‘legal detriment, that has been bargained 

for by the promisor . . . and exchanged by the promisee . . . in 

return for the promise of the promisor.’” (quoting John D.

Calamari & Joseph M. Perillo, Contracts § 4-2, at 189 (3d ed. 

1987))), superseded by statute on other grounds, 1992 N.H. Laws 

203:1.

2. “Other Means”

The exception also describes the categories of payment that 

qualify for the exception. To characterize these categories, I 

first look to the manner in which the legislature has defined 

the same terms elsewhere in chapter 275, which codifies New 

Hampshire’s employee-protective legislation. See, e.g., Paey v.

 

goodwill of a successful corporation. See Doc. No. 80-1. These 

intangible benefits would ultimately be expected to lead to 

increased settlement payments, however. In any event, it is 

sufficient for present purposes to limit my consideration of the 

benefits received by the drivers to their settlement payments.

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Rodrigue, 119 N.H. 186, 188 (1979) (construing the meaning of 

words within two statutes governing similar subject matter in

pari materia). The only relevant term that is expressly defined

in chapter 275 is “wages.” The legislature has defined “wages”

in section 275:42(III) to mean “compensation, including hourly 

health and welfare, and pension fund contributions . . . for 

labor or services rendered by an employee, whether the amount is 

determined on a time, task, piece, commission, or other basis of 

calculation.” Section 275:43(V) expands the scope of this 

definition: “Vacation pay, severance pay, personal days, holiday 

pay, sick pay, and payment of employee expenses, when such 

benefits are a matter of employment practice or policy, or both, 

shall be considered wages pursuant to RSA 275:42, III, when 

due.”

7 The term’s traditional definition is similarly broad. 

See Black’s Law Dictionary, supra, at 1716 (“Wages” are 

“[p]ayment for labor or services, usu[ally] based on time worked 

 

7 These definitions are only applicable to a subdivision of 

chapter 275 concerning “payment of wages.” See N.H. Rev. Stat. 

Ann. §§ 275:42-:55. Although the Reimbursement Statute is not 

situated in the “payment of wages” subdivision, the enforcement 

and administration of its substantive provisions is governed by 

the wage claim procedures described in section 275:51, which is 

situated in the “payment of wages” subdivision. See id.

§ 275:57(II). Given that the Reimbursement Statute expressly 

incorporates portions of the “payment of wages” subdivision, the 

definition of the term “wages” in that subdivision is 

particularly significant here. 

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or quantity produced; specif[ically], compensation of an 

employee based on time worked or output of production. . . . 

includ[ing] every form of remuneration payable for a given 

period to an individual for personal services”).

These definitions lead me to two conclusions. First, the 

term “wages,” both as generally understood and as used by the 

legislature in other circumstances, is construed quite broadly 

to include virtually any benefit that an employer provides to an 

employee as compensation for the employee’s services. Second, 

the term “services” (for which wages are provided) is construed 

in a similarly broad fashion to include detriments that an 

employee incurs on behalf of an employer beyond the simple 

provision of labor. In particular, both section 275:43(V) and 

the Reimbursement Statute contemplate that an employer may pay 

an employee wages to compensate the employee for assuming

certain work-related expenses.

Although not statutorily defined, the term “cash advance” 

has an equally expansive traditional meaning. “Cash” is

“[m]oney or its equivalent[, c]urrency or coins, negotiable 

checks, and balances in bank accounts,” Black’s Law Dictionary, 

supra, at 245, and thus a “cash advance” is “[t]he furnishing of 

[cash] before any consideration is received in return.” See id.

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at 60 (defining “advance”). As used here, “money or its 

equivalent” implies a variety of compensation methods, and “any 

consideration” contemplates an almost infinite range of 

potential detriments that an employee might incur on behalf of 

his or her employer. The only clear limitation that can be 

gleaned from the definition of a “cash advance” is that the 

employer must provide (typically monetary) compensation before 

the employee provides consideration.

In contrast to “wages” and “cash advance,” the term “other 

means” carries no independent meaning. Rather, its definition

is dependent on the specific terms accompanying it. See, e.g., 

Beauchemin, 161 N.H. at 658; Narramore v. Clark, 63 N.H. 166, 

167 (1884). Because “other means” may be construed “to embrace 

only objects similar in nature to” the more specific terms 

“wages” and “cash advance,” see Beauchemin, 161 N.H. at 658, it 

is reasonable to conclude that the legislature intended “other 

means” to refer to a benefit (such as money or its equivalent)

that is provided to an employee in exchange for a service (such 

as a promise to assume work-related expenses) that is provided 

to an employer. This definition, although not a paragon of 

precision, draws on elements of the traditional and statutory

definitions of “wages” and “cash advance” and is in keeping with 

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the expansive scope of both of those terms. It thus 

sufficiently captures the legislative intent to permit a broad 

range of payment methods to qualify for the exception.8

In sum, the first part of the exception exempts all 

expenses assumed by an employee in consideration for a benefit 

provided by the employer, and the second part only restricts the 

benefits that qualify for exemption to means of payment that are 

similar to wages and cash advances. If an employee promises to 

perform services for an employer in a manner that assumes workrelated expenses and the employer promises to provide a benefit

to the employee in consideration for the employee’s promise, 

then their agreement is part of the bargain forming an 

enforceable contract and the expenses have been paid for by the 

benefit promised by the employer. This is true whether the 

employee is a common law employee who is paid in wages or a 

statutory employee paid through “other means.” 

 

8 I recognize that in the absence of countervailing factors, 

remedial legislation should be construed expansively and 

exceptions to remedial obligations construed narrowly. See Cobb

v. Contract Transp., Inc., 452 F.3d 543, 559 (6th Cir. 2006). 

But any canon of statutory interpretation is outweighed by a 

clear indication of legislative intent. Chagnon v. Union-Leader

Corp., 104 N.H. 472, 474 (1963), superseded by statute on other

grounds, 1963 N.H. Laws 293. With respect to the Reimbursement 

Statute, the legislature clearly intended to broadly exempt all 

work-related expenses assumed by employees in consideration for 

a benefit provided in return by their employers. 

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B. The Drivers’ Interpretation

The drivers challenge this interpretation of the exception 

and instead contend that the exception simply does not apply to 

expenses incurred by statutory employees who qualify as 

independent contractors under the common law. Rather than 

relying on textual arguments, they base their proposed 

interpretation on two policy arguments. First, they maintain 

that their interpretation should be adopted because employers 

will otherwise have an incentive to “misclassify” their 

employees as independent contractors. Next, they argue that the 

statute’s designation as “protective legislation” requires that 

it be construed in their favor. Neither argument has merit.

9

 

9 The drivers also contend that an interpretation of the 

Reimbursement Statute that permits statutory employees to assume 

work-related expenses without being entitled to reimbursement 

would contravene section 275:50(I) of the New Hampshire Revised 

Statutes. That section provides in relevant part that “no 

provision of this subdivision may in any way be contravened or 

set aside by private agreement.” The relevant subdivision, 

governing “payment of wages,” does not incorporate the 

Reimbursement Statute. See supra note 7. Section 275:50(I)

would thus appear to have no application to the Reimbursement 

Statute. Nevertheless, the New Hampshire Supreme Court has held 

that section 275:50 “prohibits the waiver by private agreement 

of any provision of RSA chapter 275.” Fowler v. Town of

Seabrook, 145 N.H. 536, 539 (2000). Although it is difficult to 

reconcile section 275:50’s text with the Fowler court’s 

interpretation of it, I need not determine the provision’s true 

scope because it does not save the drivers’ claim in any event. 

The claimed expenses were “paid for by wages, cash advance, or 

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1. Misclassification as Independent Contractors

The drivers claim that an adverse decision in this case

will give employers “every incentive to (1) misclassify their 

workforce and (2) force all of their business expenses on that 

workforce, secure in the knowledge that if a court nullifies 

their classification, the misclassified employees will have no 

remedy to recover the business expenses they improperly bore.” 

Doc. No. 79. According to the drivers, this would mean that 

“[m]isclassified employees would have fewer rights than properly 

classified employees.” Id.

These concerns are unwarranted. The Reimbursement Statute 

grants “misclassified”

10 statutory employees exactly the same 

rights as workers who are properly classified as employees for 

all purposes under statute and common law. In New Hampshire, 

 

other means,” thus the drivers have no rights under the 

Reimbursement Statute that they could waive by private 

agreement.

10 Under both Pennsylvania law, which governs the OA, see Doc. 

No. 80-1, and New Hampshire common law, the drivers are 

considered independent contractors rather than employees. See

FedEx Ground Package Sys., 758 F. Supp. 2d at 698, 717. 

Consequently, FedEx did not misclassify the drivers by labeling 

them independent contractors. Because the drivers are only 

employees pursuant to certain New Hampshire statutes, FedEx 

erred only insofar as it made impermissible deductions from 

their settlement payments. See id. at 699; Gennell, 2013 DNH 

110, 23-25 (holding as such).

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employers and their workers - regardless of classification - may

mutually agree to apportion work-related expenses to either 

party. Contrary to the drivers’ assumption, simply labeling a 

common law or statutory employee as an independent contractor 

does not mean that the employee must then bear all his or her 

work-related expenses as a matter of law. That issue remains 

negotiable between the employee and the employer.11

2. Protective Legislation

The drivers next argue that FedEx’s interpretation of the 

Reimbursement Statute ignores the legislature’s intent, and the 

New Hampshire Supreme Court’s instruction, that “protective 

legislation” such as the Reimbursement Statute should be 

construed so as “to effectuate [chapter 275’s] broad purpose of 

 

11 In contrast, the California legislature has enacted a law that 

does restrict an employer’s ability to require employees to 

assume expenses as part of an employment agreement. California 

Labor Code section 2802(a) provides that:

An employer shall indemnify his or her employee for 

all necessary expenditures or losses incurred by the 

employee in direct consequence of the discharge of his 

or her duties, or of his or her obedience to the 

directions of the employer, even though unlawful, 

unless the employee, at the time of obeying the 

directions, believed them to be unlawful.

Thus it is per se unlawful in California for an employment 

contract to apportion expenses to an employee. Edwards v.

Arthur Andersen LLP, 189 P.3d 285, 295 (Cal. 2008). Not so in 

New Hampshire.

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protecting employees.” Doc. No. 79 (quoting Galloway v.

Chicago-Soft, Ltd., 142 N.H. 752, 759 (1998)). The drivers are 

undoubtedly correct that the remedial legislation in chapter 275 

should be interpreted in an employee-protective manner. But 

that does not mean that it must be interpreted in the most 

employee-protective manner conceivable. To the contrary, New 

Hampshire courts are not hesitant to reach decisions adverse to 

employees in cases applying chapter 275 legislation if the 

circumstances so require. See, e.g., Grimard v. Rockingham

Cnty. Dep’t of Corr., 161 N.H. 69, 73 (2010) (construing N.H. 

Rev. Stat. Ann. § 275:43-b(I)); Labor Ready Ne., Inc. v. N.H.

Dep’t of Labor, 147 N.H. 721, 723 (2002) (construing N.H. Rev. 

Stat. Ann. § 275:51(I)). Accordingly, I reject the drivers’ 

proposed interpretation and instead conclude that the exception 

covers statutory employees who are paid for their expenses by

other means.

C. The Operating Agreement 

The drivers next claim that regardless of my interpretation 

of the Reimbursement Statute, their expenses were not “paid for” 

by FedEx because the OA clearly states that the settlement 

payments were provided exclusively as compensation for services. 

They quote several provisions of the OA which note that payments 

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are provided in return “for services provided” or for periods in 

which a driver “provides services” under the OA.12 See Doc. No. 

80-1. The drivers argue that this unambiguous language clearly 

specifies that their labor, rather than their expenses, was

“paid for by wages, cash advance, or other means,” and that the 

drivers, rather than FedEx, were required to “bear all costs and 

expenses incidental to operation of the[ir vehicles].”13 Doc. 

No. 79 (quoting N.H. Rev. Stat. Ann. § 275:57(I); Doc. No. 80-

 

12 The drivers never explain what they believe the term 

“services” entails as it is used in the OA, other than that it 

does not include assuming work-related expenses. See Doc. Nos. 

79, 87. I assume that they interpret “services” to refer only 

to labor, such as dropping off and picking up packages. 

13 The drivers rely heavily on a California state court decision 

in support of this view. See Estrada v. FedEx Ground Package

Sys., Inc., 64 Cal. Rptr. 3d 327, 339 (2007). As read by the 

Estrada court, the OA “provides that it is ‘for services 

provided,’ not expenses incurred,” and thus the “suggestion that 

the settlement formula is keyed to specific expenses and, as 

such, includes reimbursement for those expenses, is not 

supported by any evidence.” Id. If my conclusion to the 

contrary appears to be in conflict with Estrada’s reasoning, it 

is enough to note that the Estrada court construed the OA in 

light of a markedly different reimbursement statute. See supra

note 11. In California, “[a]n employer shall indemnify his or 

her employee for all necessary expenditures,” without 

qualification or exception, see Cal. Lab. Code § 2802(a), and 

California employers are consequently required to segregate 

employee compensation between labor and expense reimbursement. 

See infra note 16 (citing Gattuso v. Harte-Hanks Shoppers, Inc., 

169 P.3d 889, 891 (Cal. 2007)). It is therefore not surprising 

that Estrada considered whether the OA’s settlement structure 

was “keyed to specific expenses” to determine whether FedEx had 

complied with section 2802(a) of the California Labor Code. 

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1). The drivers also present extrinsic evidence in support of 

their view, which I need not consider in light of my agreement 

with them that the terms of the OA are clear.14 Cf. Dillman v.

N.H. Coll., 150 N.H. 431, 434 (2003) (citing Galloway, 142 N.H. 

at 756; Erin Food Servs., Inc. v. 688 Props., 119 N.H. 232, 235 

(1979)) (“[T]he interpretation of a contract is an issue of law 

for this court to resolve. . . . and the trial court . . .

properly look[s] to extrinsic evidence” when “contract terms are 

ambiguous”).15

As the drivers concede, the settlement payments they 

 

14 Two expenses claimed by the drivers are not explicitly 

mentioned in the OA: Department of Transportation physical exams 

and mobile phone costs. See Doc. No. 80-1. Assuming that the 

drivers incurred both expenses “at the request of” FedEx, see

N.H. Rev. Stat. Ann. § 275:57(I), I find that the OA apportions 

them to the drivers and that this apportionment would be clear 

to any reasonable person under the circumstances. The drivers 

agreed in the OA “to bear all costs and expenses incidental to 

operation of [their vehicles], including, without limitation,” a 

long list of potential expenses, some of which have an 

exceedingly attenuated connection to vehicle operation. See

Doc. No. 80-1 (including, for example, workers compensation 

assessments). It thus seems clear in context that any workrelated expenses for physical exams or mobile phones were 

“incidental to operation of” the drivers’ vehicles.

15 Although the OA is governed by Pennsylvania law, see Doc. No. 

80-1, neither party mentions this fact or cites a single 

Pennsylvania case in support of their arguments. Because the 

parties note no differences between the law of New Hampshire and 

that of Pennsylvania as it pertains to the basic contract 

principles at issue here, I follow their lead and rely on New 

Hampshire case law in my examination of the OA.

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received were provided in exchange for their agreement to

“provide[] services under the [OA].” See Doc. No. 80-1. This 

necessarily incorporates the terms of the OA, which required the 

drivers to, among other things, bear the costs of purchasing or 

leasing their vehicles, maintaining their vehicles, and 

purchasing fuel. As previously discussed, the drivers’ promise 

to comply with these terms was the consideration that they 

offered to FedEx, and FedEx’s promise to compensate the drivers 

in accordance with the settlement structure was the 

consideration that it offered to the drivers. This bargainedfor exchange made the OA binding upon both parties.

Contrary to the drivers’ contention, FedEx does not bear

the burden to identify exactly what portion of the settlement 

payments represented compensation for services (in the limited 

sense of dropping off and picking up packages) and what portion

represented compensation for expenses.16 The OA obligates the 

 

16 In contrast, FedEx would bear such a burden if California’s 

expense indemnification statute applied in New Hampshire. See

Gattuso, 169 P.3d at 891 (citing Cal. Lab. Code § 2802(a)) 

(“[A]n employer may satisfy its statutory reimbursement 

obligation by paying employees enhanced compensation . . . 

provided there is a means or method to apportion the enhanced 

compensation to determine what amount is being paid for labor 

performed and what amount is reimbursement for business 

expenses.”). As previously discussed, the New Hampshire 

legislature has not defined “services” in a manner that 

Case 1:05-cv-00145-PB Document 92 Filed 03/19/14 Page 20 of 24
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drivers to provide services under terms and conditions that 

include the assumption of certain expenses and it obligates

FedEx to pay the drivers for doing so. Labor provided in a 

manner inconsistent with these terms and conditions – for 

instance, making all required pickups and deliveries on a 

bicycle – would constitute a material breach of the OA, thereby 

excusing FedEx from making any payments at all to that driver.17 

 

differentiates so sharply between labor and work-related 

expenses. Nothing in New Hampshire law requires an employer to 

distinguish between the two when compensating workers.

17 This is true for two reasons. First, the OA is not a 

divisible contract with separate employee obligations to (1) 

pick up and deliver packages and (2) bear certain work-related 

expenses so as to perform the first obligation in a particular 

fashion. See In re Trailer & Plumbing Supplies, 133 N.H. 432, 

435 (1990) (“If the parties gave a single assent to the whole 

transaction, the contract is indivisible, while it is divisible 

if they assented separately to several things.” (quoting Lemire

v. Haley, 91 N.H. 357, 360 (1941))). Thus, a breach of any 

material term of the OA by a driver would wholly excuse FedEx 

from its obligations under the OA. Second, the drivers’ 

agreement to assume work-related expenses is a material term of 

the OA. For a contract term to be material, it:

must go to the root or essence of the agreement 

between the parties, or be one which touches the 

fundamental purpose of the contract and defeats the 

object of the parties in entering into the contract. 

A breach is material if: (1) a party fails to perform 

a substantial part of the contract or one or more of 

its essential terms or conditions; (2) the breach 

substantially defeats the contract’s purpose; or (3) 

the breach is such that upon a reasonable 

interpretation of the contract, the parties considered 

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The OA’s settlement structure as a whole constitutes the 

consideration for the drivers’ promise to assume material 

obligations in the OA that are not expressly tied to a 

particular component of the settlement structure, such as the 

obligation to incur work-related expenses. Hence, FedEx need 

not point to any particular portion of the settlement structure 

to prove that the drivers were paid for assuming the claimed 

expenses by the settlement structure as a whole.

The OA clearly establishes that the drivers promised FedEx 

that they would assume the claimed expenses, and that FedEx 

promised the drivers that it would pay them for doing so in the 

course of “provid[ing] services under the Agreement.” See Doc. 

No. 80-1. This bargained-for exchange demonstrates that FedEx 

has “paid for” the drivers to bear the claimed expenses by 

“other means” as those terms are understood in the Reimbursement 

Statute.

 

the breach as vital to the existence of the contract.

Found. for Seacoast Health v. Hosp. Corp. of Am., 165 N.H. 168, 

181-82 (2013) (internal quotation marks omitted) (quoting Ellis

v. Candia Trailers & Snow Equip., 164 N.H. 457, 467 (2012)). 

Failure to incur the relevant expenses would surely constitute a 

material breach of the OA under all three of the Seacoast Health

tests. See id.

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IV. CONCLUSION

It is undisputed that the drivers shouldered the burden of 

the claimed expenses throughout their employment with FedEx. 

The OA clearly establishes that such an arrangement was the 

mutual intention of the contracting parties. It is equally 

clear that the Reimbursement Statute was not intended to 

frustrate the parties’ intentions or limit their freedom of 

contract, at least to the extent of apportioning work-related 

expenses. Accordingly, I conclude that the claimed expenses 

were “paid for by wages, cash advance, or other means” and that 

the drivers have no right to reimbursement under the 

Reimbursement Statute. I grant FedEx’s renewed motion for 

summary judgment (Doc. No. 84) and deny the drivers’ renewed 

motion for partial summary judgment (Doc. No. 78) on the 

reimbursement claim (Count VIII).

SO ORDERED.

/s/Paul Barbadoro

Paul Barbadoro 

United States District Judge 

March 19, 2014

cc: Susan E. Ellingstad, Esq.

Jordan M. Lewis, Esq.

Edward K. O’Brien, Esq.

Jozef Kopchick, Esq.

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Kenneth Sansom, Esq.

Leann M. Walsh, Esq.

James C. Rehnquist, Esq.

Lucy J. Karl, Esq.

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