UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW HAMPSHIRE

Robert Gennell, Jr. et al.

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

 Opinion No. 2013 DNH 110

FedEx Ground Package System, Inc.

AMENDED MEMORANDUM AND ORDER

This class action was filed against FedEx Ground Package 

System, Inc. (“FedEx”) by several FedEx drivers based in New 

Hampshire who claim that FedEx improperly treated them as 

independent contractors rather than employees. The action was 

centralized in a multidistrict litigation proceeding with other 

similar actions against FedEx. The transferee court later 

determined that the New Hampshire drivers could be treated as 

independent contractors under New Hampshire common law but that 

they qualified as employees under certain state statutes. It 

then remanded the action to this court.

Two class claims remain in dispute. Plaintiffs allege in 

their second cause of action (“Deduction Claim”) that FedEx made 

deductions from the drivers’ compensation that were prohibited 

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by N.H. Rev. Stat. Ann. § 275:48. They allege in their eighth 

cause of action (“Reimbursement Claim”) that FedEx failed to 

reimburse the drivers for work-related expenses in violation of 

N.H. Rev. Stat. Ann. § 275:57.

1 FedEx has filed a motion for 

summary judgment contending that both claims are preempted by 

the Federal Aviation Administration Authorization Act of 1994

(“FAAAA”). It also argues that the Reimbursement Claim is 

deficient even if it is not preempted. Plaintiffs have filed 

their own motion for partial summary judgment.

I. BACKGROUND

A. The Relationship between FedEx and Drivers

FedEx is a nationwide small package pick-up and delivery 

company. During the class period, the company conducted its 

business delivery operations under the name “FedEx Ground” 

(“FEG”) and its home delivery operations under the name “FedEx 

Home Delivery” (“FHD”). The class includes New Hampshire 

 

1 The parties agree that plaintiffs’ fifth cause of action for 

rescission is foreclosed by the transferee court’s ruling, their 

first cause of action for failure to pay overtime and provide 

meal breaks and their fourth cause of action alleging a 

violation of New Hampshire’s Consumer Protection Statute fail 

under New Hampshire law, and their sixth and seventh causes of 

action for an accounting and declaratory judgment do not state 

independent claims for relief. Plaintiffs’ third cause of 

action for fraud is not a class claim and is not at issue at the 

present time. 

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drivers from both FEG and FHD who worked for FedEx as 

independent contractors between April 27, 2002 and June 1, 2009. 

In re FedEx Ground Package Sys., Inc. Emp’t Practices Litig., 

273 F.R.D. 424, 470–72 (N.D. Ind. 2008); Tr. 5.

2

FedEx entered into a standard-form “Operating Agreement” 

(“OA”) with each class member. See Doc. No. 53-3. The OA 

characterizes the drivers as independent contractors. Doc. No. 

53-3 at 6 (“Both [FedEx] and Contractor intend that Contractor 

will provide these services strictly as an independent 

contractor, and not as an employee of [FedEx] for any 

purpose.”). The drivers, nevertheless, agreed to conduct their 

business in a manner that identified them as part of the FedEx 

system. The OA “set[s] forth the mutual business objectives of 

the two parties . . . but the manner and means of reaching [the] 

results are within the discretion of the Contractor.” Doc. No. 

53-3 at 6.

 

2 Plaintiffs proposed, and the MDL court granted certification 

for, a class period starting on April 27, 2002 with no specified 

end date. In re FedEx, 273 F.R.D. at 470, 472. FedEx’s brief 

describes the class period as running from April 27, 2002 to May 

31, 2009. Doc. No. 53 at 30. At oral argument, the parties 

agreed that the class period ended on June 1, 2009, the date 

FedEx switched to a different business model in New Hampshire. 

Tr. 4–5. The class period was incorrectly described at oral 

argument as starting on April 29, 2002. The correct start date 

is April 27, 2002, as stated in the MDL class certification 

order. In re FedEx, 273 F.R.D. at 470, 472.

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The drivers agreed to render their services using a FedEx 

terminal in New Hampshire as their home base. See id. at 21. 

They were required to fill out daily logs and inspection reports 

and file the originals with FedEx at the end of each business 

day. Id. at 9. The drivers also had to meet an “Agreed 

Standard of Service,” which included cooperating with FedEx 

employees, maintaining the professional image and good 

reputation of FedEx, and conducting all business activities with 

integrity and honesty. Id. at 10–12. The OA restricted drivers 

from using their equipment for any other purpose while the 

equipment was in the service of FedEx. Id. at 8.

FedEx compensated the drivers through weekly settlement 

payments. The settlement payments were calculated using a

compensation formula that took into account the volume of the 

drivers’ package deliveries, the number of stops they made, and 

the density of their delivery area, and deducted certain 

expenses FedEx incurred on behalf of the drivers. Id. at 18–20. 

Deemed “independent contractors,” the drivers were required 

to procure their own trucks and operate them at their own 

expense. Id. at 7 (requiring the drivers to bear all costs and 

expenses of operating the trucks, including maintenance, fuel, 

oil, tires, repairs, taxes, insurance, workers compensation 

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assessments, licenses, vehicle registration fees, and tolls). 

The drivers were also required to mark their trucks and other 

equipment with FedEx colors, logos, numbers, marks, and insignia

and wear a FedEx uniform. Id. at 8, 12. The drivers either 

paid for these expenses out-of-pocket or they were deducted from 

their weekly settlement payments. For instance, to facilitate 

the payment of licenses, taxes, and fees, the drivers authorized 

FedEx to pay the charges on the drivers’ behalf and then deduct 

the expenses from their weekly settlement payments. Id. at 7–8. 

Drivers could elect to participate in a business support package 

(“BSP”) through which FedEx provided the drivers with uniforms, 

communications equipment, Department of Transportation (“DOT”) 

inspections, equipment washing, and drug tests to meet DOT 

requirements. Most drivers participated in the BSP and the cost 

was deducted from their weekly settlement payments. Id. at 24. 

If a driver did not elect to acquire the communications 

equipment necessary to fulfill his obligations through the BSP, 

he was required to purchase or lease it. Id. at 12. 

In addition to the BSP deduction, plaintiffs allege that 

FedEx deducted the cost of deadhead,3 work accident insurance, 

 

3 Deadhead insurance is insurance to cover a tractor when it is 

operated without a load. Great Am. Assurance. Co. v. Sanchuk, 

LLC, 8:10-cv-2568-T-33AEP, 2012 WL 3112004, at *7 n.2 (M.D. Fla. 

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and cargo insurance, as well as the postage fees associated with 

sending correspondence to the drivers. Doc. Nos. 46 at 11–12; 

46-3 at 10.

B. Plaintiffs’ Claims

Plaintiffs base the Deduction Claim on N.H. Rev. Stat. Ann. 

§ 275:48 (“Deduction Statute”), which bars an employer from 

withholding or diverting money from an employee’s wages unless 

one or more enumerated exceptions are satisfied. Plaintiffs 

argue that FedEx violated this provision by deducting charges 

for items such as DOT inspections, insurance, uniforms, 

communications equipment, and drug testing.

The Reimbursement Claim is based on N.H. Rev. Stat. Ann. § 

275:57(I) (“Reimbursement Statute”), which provides: 

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.

Plaintiffs argue that FedEx violated this provision by requiring 

drivers to bear the cost of a variety of work-related items such 

as the cost of owning and operating their trucks. 

 

July 30, 2012).

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To prevail on either claim a driver must be an “employee.” 

N.H. Rev. Stat. Ann. § 275:42 defines an employee as “every 

person who may be permitted, required, or directed by an 

employer, in consideration of direct or indirect gain or profit,

to engage in any employment . . . .” It then provides several 

exceptions, including a narrowly-defined independent contractor 

exception. Id. The transferee court ruled that the plaintiffs 

qualified as employees under this provision and were not covered 

by the independent contractor exception because the exception 

does not apply to a person who “‘holds himself or herself out to 

be in business for himself or herself.’” In Re FedEx Ground 

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

(quoting N.H. Rev. Stat. Ann. § 275:42II(e)). 

II. STANDARD OF REVIEW

Summary judgment is appropriate when the record reveals “no 

genuine dispute as to any material fact and that the movant is 

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

56(a). The evidence submitted in support of the motion must be 

considered in the light most favorable to the nonmoving party, 

drawing all reasonable inferences in its favor. See Navarro v. 

Pfizer Corp., 261 F.3d 90, 94 (1st Cir. 2001). 

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 A party seeking summary judgment must first identify the

absence of any genuine dispute of material fact. Celotex Corp. 

v. Catrett, 477 U.S. 317, 323 (1986). A material fact “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)). If the moving party 

satisfies this burden, the nonmoving party must then “produce 

evidence on which a reasonable finder of fact, under the 

appropriate proof burden, could base a verdict for it; if that 

party cannot produce such evidence, the motion must be granted.” 

Ayala-Gerena v. Bristol Myers-Squibb Co., 95 F.3d 86, 94 (1st 

Cir. 1996); see Celotex, 477 U.S. at 323. 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 principal issue raised by the present motions is 

whether the FAAAA preempts the Deduction and Reimbursement 

Claims. Accordingly, I begin with the preemption issue.

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A. Preemption

The FAAAA has an express preemption provision, which reads: 

“[A] State . . . may not enact or enforce a law, regulation, or 

other provision having the force and effect of law related to 

price, route, or service of any motor carrier . . . with 

respect to the transportation of property.” 49 U.S.C. § 

14501(c)(1). FedEx argues that both the Deduction Claim and the 

Reimbursement Claim are preempted by the FAAAA because the 

statutes on which the claims are based affect its brand 

communication practices in a way that is “related to” its

pricing and services. 

The FAAAA’s preemption provision is modeled on a similar 

provision in the Airline Deregulation Act of 1978 (“ADA”) and 

courts have analyzed both provisions in pari materia. Brown v. 

United Airlines, Inc., 720 F.3d 60, 65 (1st Cir. 2013). Because 

the Supreme Court and the First Circuit have construed the 

relevant terms in both statutes on multiple occasions, I first 

look to precedent for guidance and then apply the statute to the 

facts of the case to determine whether plaintiffs’ claims are 

preempted. 

1. Precedent

The Supreme Court first dealt with ADA preemption in 

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Morales v. Trans World Airlines, Inc., 504 U.S. 374 (1992). In 

holding that state guidelines setting airline fare advertising 

were preempted by the ADA, the Court made several statements 

that have guided its subsequent preemption jurisprudence under

the ADA and the FAAAA. First, relying on both common usage and 

a similarly worded preemption provision in the Employee 

Retirement Income Security Act, the Court noted that the use of 

the phrase “relating to” in the preemption provision 

“express[es] a broad preemptive purpose.” Id. at 383-84. The 

Court also considered and rejected both plaintiff’s argument 

that ADA preemption applied only to provisions that directly set

airline rates, routes, or services and its contention that only

provisions that specifically targeted the airline industry were 

subject to preemption. Id. at 385-87. At the same time, the 

Court was careful to note that “‘[s]ome state actions may affect 

[airline fares] in too tenuous, remote, or peripheral a manner’

to have preemptive effect.” Id. at 390 (quoting Shaw v. Delta 

Air Lines, Inc., 463 U.S. 85, 100 n.21 (1983)). Applying these 

principles, the Court determined that the fare advertising 

guidelines were related to airline prices both because they

dictated how an airline could communicate rate information to 

its customers and because “it is clear as an economic matter 

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that state regulations on fare advertising have the forbidden 

significant effect upon fares.” Id. at 387-88.

Three years later, in American Airlines v. Wolens, 513 U.S. 

219 (1995), the Court was required to determine whether the

ADA’s preemption provision barred participants in American 

Airlines’ frequent flyer program from using a state consumer 

protection statute and state contract law to recover damages 

they suffered when American made retroactive changes to the 

program. Following its reasoning in Morales, the Court had 

little difficulty in concluding that the consumer protection act 

claim was preempted, but it determined that the plaintiffs could 

proceed with their breach of contract claim because the 

preemption provision did not bar a plaintiff from using state 

contract law to force an airline to abide by its own agreements. 

Id. at 226-27, 232.

In Rowe v. New Hampshire Motor Transport Ass’n, 552 U.S. 

364 (1998), an association of transport carriers argued that 

certain sections of Maine’s Tobacco Delivery Law were preempted 

by the FAAAA. One of the challenged provisions prohibited 

anyone other than a state-licensed retailer from accepting an 

order for delivery of tobacco products and another required 

retailers to use a specific form of “recipient-verification 

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service” when shipping tobacco products. Id. at 368. In 

determining that the provisions were preempted even though they 

targeted shippers rather than carriers, the Court reasoned that 

the provisions were preempted because they had the effect of

regulating the services that carriers provide to their 

customers. Id. at 373.

Earlier this year, the Court again confronted the issue of 

preemption under the FAAAA in Dan’s City Used Cars, Inc. v. 

Pelkey, 133 S. Ct. 1769 (2013). There, a vehicle owner brought 

suit against a towing company alleging that it had improperly 

stored and ultimately sold his vehicle in violation of state 

laws that regulate the storage and sale of towed vehicles. Id.

at 1775. In holding that the state statutes were not preempted, 

the Court noted that the FAAAA, unlike the ADA, only preempts 

claims that relate to price, routes, or services “with respect 

to the transportation of property.” Id. at 1778. Adopting 

language from a dissent by Justice Scalia in an earlier case, 

the Court noted that this phrase “‘massively limits the scope of 

preemption’ ordered by the FAAAA.” Id. at 1778 (quoting 

Columbus v. Ours Garage & Wrecker Serv., Inc., 536 U.S. 424, 449

(2002) (Scalia, J., dissenting)). The Court then reasoned that 

the plaintiff’s claims were not preempted because the conduct on 

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which the claims were based occurred long after the vehicle was 

towed, and, therefore, the claims did not relate to 

transportation services. Id. at 1779. 

The First Circuit decision that speaks most directly to the 

preemption question at issue here is DiFiore v. American 

Airlines, Inc., 646 F.3d 81 (1st Cir. 2011). In DiFiore, a 

class of skycaps challenged American Airlines’ curbside baggage 

check fee, arguing that it was inconsistent with a Massachusetts 

statute governing tips.

4 In concluding that the tips law claim

was preempted by the ADA, the court distinguished the tips law 

from other employee compensation laws that ordinarily would not 

be preempted by noting that “the tips law has a direct 

connection to air carrier prices and services and can fairly be 

said to regulate both.” Id. at 87. In reaching this 

conclusion, the court rejected American Airlines’ argument that 

a sufficient connection between a state law and a motor 

carrier’s prices, routes, or services can be established merely 

by demonstrating that the law imposes costs on an airline that 

could result in price increases. Id. at 89. Instead, the Court 

 

4 The statute provided in pertinent part that “[n]o employer or 

other person shall demand . . . or accept from any . . . service 

employee . . . any payment or deduction from a tip or service 

charge given to such . . . service employee . . . by a patron.” 

Id. at 84 (quoting Mass. Gen. Laws ch. 149, § 152A(b)). 

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based its ruling on the fact that the plaintiffs were using the 

tips law to directly attack a charge that American was 

attempting to impose on its customers for an airline service. 

Id. Accordingly, the court held that “the tips law as applied 

here directly regulates how an airline service is performed and 

how its price is displayed to customers - not merely how the 

airline behaves as an employer or a proprietor.” Id. at 88; see

also Brown, 720 F.3d at 64 (applying DiFiore to common law 

claims challenging baggage handling fee).

B. Application

The Supreme Court has never held that a state employee 

compensation statute is preempted by either the ADA or the 

FAAAA. Moreover, DiFiore, the only First Circuit decision to do 

so, involved an effort to use an employee compensation statute 

to directly attack an airline’s prices and services. This case 

is obviously distinguishable from DiFiore because, unlike the 

Massachusetts tips law that was at issue in that case, the 

Deduction and Reimbursement Statutes have no direct connection 

to FedEx’s prices, routes, or services. Thus, to succeed with 

its preemption defense, FedEx must find some other way to 

demonstrate that plaintiffs’ claims have a sufficient connection 

to its prices, routes, or services to warrant their preemption.

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FedEx attempts to meet this challenge by first arguing that 

it does not need evidence to establish the required relationship 

between its prices and services and the plaintiffs’ claims and 

because the connection can be established through the use of 

logic alone. In simplified form, FedEx reasons that its 

branding strategy, which requires drivers to use the FedEx brand 

on their trucks and uniforms, obviously relates to the services 

the company provides. It then asserts that the Deduction and 

Reimbursement Statutes relate to its branding strategy because 

it cannot continue to use the strategy unless it complies with 

both statutes. It then follows as a matter of logic, FedEx 

claims, that if its branding strategy relates to its services 

and the Deduction and Reimbursement Statutes relate to its 

branding strategy, the statutes must also relate to its services

in a way that requires preemption. 

The fatal flaw in this argument is that it is based on a 

serious misreading of precedent. FedEx rests its argument on a 

statement in the First Circuit’s decision in New Hampshire Motor 

Transport Ass’n v. Rowe, in which the court noted that evidence 

quantifying the cost of complying with a statute is not required 

if the court is able to discern “the logical effect that a 

particular scheme has on the delivery of services or the setting 

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of rates. . . .” 448 F.3d 66, 80 n.14 (1st Cir. 2006), aff’d 

sub nom. Rowe v. N.H. Motor Transport Ass’n, 552 U.S. 364 

(2008). In making this statement, the court was not declaring 

that every state statute that can be tied to a motor carrier’s 

prices, routes, or services through the use of logic is 

preempted. Instead, it was merely acknowledging the fact that 

evidence will not be required to establish a prohibited effect 

on prices, routes, or services if the prohibited effect can be 

discerned through the use of logic.

Almost all state laws that affect a motor carrier’s 

transportation business will have the kind of logical relation

to its prices or services that FedEx complains of in this case. 

Zoning laws limit the places where a carrier can locate its 

facilities. Tax laws affect the cost of a carrier’s operations. 

Traffic laws affect the number of deliveries that a driver can 

make in a day. Wage and hour laws impact the conditions under 

which a carrier’s employees can be made to work. All of these 

laws have a logical relation to a carrier’s prices and services 

because they either affect the way in which a carrier provides 

its services or they potentially impose costs on a carrier that 

could affect the prices it charges its customers. Laws of this 

type, however, are not ordinarily subject to preemption. See

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Dan’s City, 133 S. Ct. at 1780 (noting that zoning regulations 

are not preempted); DiFiore, 646 F.3d at 89 (rejecting argument 

that state laws that affect a carrier’s costs are necessarily 

preempted). 

As the Supreme Court recently noted in Dan’s City, the 

FAAAA’s preemption provision is targeted at “a State’s direct 

substitution of its own governmental commands for competitive 

market forces in determining (to a significant degree) the 

services that motor carriers will provide.” 133 S. Ct. at 1780

(quoting Rowe, 522 U.S. at 372). This purpose is not served 

when the FAAAA is construed so broadly as to require the 

preemption of every employee compensation statute that has a 

logical connection to a carrier’s prices, routes, or services. 

Thus, FedEx’s argument from logic is not sufficient to justify 

its preemption defense. 

FedEx argues in the alternative that the evidentiary record

demonstrates that the Deduction and Reimbursement Statutes are 

related to its prices, routes, and services. The evidence FedEx

relies on, however, supports only its argument that its branding

strategy is an essential aspect of the services it provides to 

its customers. FedEx conceded at oral argument that it 

presented no evidence to suggest that either statute actually 

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interfered with FedEx’s pricing or services. Tr. 34–35. 

Moreover, this is not a case where I can rely on an 

understanding of basic economics to substitute for evidence. 

See, e.g., Morales, 504 U.S. at 388 (noting that “it is clear as 

an economic matter that state restrictions on fare advertising 

have the forbidden significant effect upon fares”). In fact, in 

the absence of evidence, basic economics suggests that, as in 

fact happened in this case,5 FedEx should be able to comply with 

both statutes without changing either its prices or services 

merely by renegotiating its contracts with its drivers. 

In summary, the record in this case demonstrates that the 

Deduction and Reimbursement Statutes are employee compensation 

statutes that have no direct connection to FedEx’s prices, 

routes, or services. Moreover, neither statute relates to 

FedEx’s prices, routes, or services merely because FedEx must 

comply with both statutes if it chooses to bar its drivers from 

 

5 On January 8, 2009, FedEx announced its intention to 

transition to a new contractor workforce model in New Hampshire 

effective June 1, 2009. Doc. No. 51-5. In exchange for 

payment, drivers would release claims against FedEx and agree to 

early termination of the OAs. The announcement contained three 

sample Independent Service Provider (“ISP”) agreements. Under 

the new model, FedEx contracts with ISPs who act as corporate 

entities and employers (i.e. “John Smith, Inc.”). The 

contractors hire and supervise employees to meet the service 

objectives. FedEx also offers an “optional brand promotion 

program” through which ISPs can get FedEx logos on their trucks 

and uniforms.

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holding themselves out to be in business for themselves. 

Finally, no evidence has been produced to support a claim that 

either statute actually affects FedEx’s pricing or the services 

it provides to its customers. Accordingly, any connection that 

exists between the Deduction and Reimbursement Statutes and 

FedEx’s prices, routes, or services is simply too tenuous to 

warrant preemption.6 Accord Schwann v. FedEx Ground Package 

Sys., Inc., No. 11-11094-RGS, 2013 WL 3353776, at *4 (D. Mass. 

July 3, 2013) (rejecting preemption challenge to similar claims 

based on Massachusetts law); Martins v. 3PD, Inc., No. 11-11313-

DPW, 2013 WL 1320454, at *12-13 (D. Mass. Mar. 28, 2013) (same).

 

6 FedEx also argues that plaintiffs’ claims are preempted to the 

extent that they seek compensation beyond that agreed upon in 

the OA because state law cannot “enlarge or enhance” 

transportation-related contracts. Doc. No. 44-1 at 9. This 

argument is based on dictum in Wolens in which the Court 

explained its ruling that the ADA preempted a state consumer 

protection act claim but not a common law breach of contract 

claim by stating that “[t]his distinction between what the State 

dictates and what the airline itself undertakes confines courts, 

in breach-of-contract actions, to the parties’ bargain, with no 

enlargement or enhancement based on stated laws or policies 

external to the agreement.” See 513 U.S. at 232. FedEx makes 

too much of this statement by failing to acknowledge that the 

Wolens Court determined that the extra-contractual claim that 

was then before it was preempted because it was related to the 

airline’s rates and services. See id. at 228. Wolens does not 

hold, and the text of the FAAAA’s preemption provision would not 

permit, a cause of action that does not otherwise relate to a 

carrier’s prices, routes, or services to be preempted merely 

because it seeks a determination that the carrier’s contracts 

with its workers violate state employee compensation laws.

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B. Reimbursement Statute

The Reimbursement Statute requires an employer to reimburse 

an employee for certain expenses incurred by the employee within 

thirty days of presentment by the employee of proof of payment. 

To be covered under the statute, the expenses must be incurred 

“at the request of the employer.” N.H. Rev. Stat. Ann. § 

275:57(I). The statute, however, does not cover expenses that 

are “normally borne by the employee as a precondition of 

employment.” Id. Nor does it cover expenses that are “paid for 

by wages, cash advance, or other means from the employer.” Id.

Plaintiffs seek to recover for a variety of businessrelated expenses that they agreed to assume in the OA. Their 

theory is that FedEx asked them to assume the expenses in the 

OA, that the expenses are not of a type that are normally borne 

by an employee as a precondition of employment, and that the 

expenses are not otherwise “paid for” by FedEx. FedEx responds 

by claiming that the OA does not qualify as a “request” that the 

employee incur the expenses and that, in any event, the expenses 

were paid for by “other means” through the settlement payments 

that it made to the drivers pursuant to the OA.

I decline to resolve this issue at the present time because 

the matter has not been adequately briefed. If the OA is deemed 

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to be FedEx’s request that the drivers assume the expenses, it 

would seem that FedEx’s promise in the OA to make settlement 

payments to the drivers is the means by which FedEx agreed to 

compensate them for their acquiescence in FedEx’s request. 

Thus, even if I accept plaintiffs’ argument that the OA is a 

request to assume expenses, it would appear that the 

Reimbursement Statute does not cover the drivers’ expenses 

because the settlement payments were the “other means” by which 

the drivers were compensated for incurring the expenses. 

Because, however, the parties have not adequately addressed this 

issue in their briefs, I deny both motions to the extent that 

they are addressed to the Reimbursement Claim without prejudice 

to either party’s right to seek summary judgment again at a 

later time.

C. The Deduction Claim

Plaintiffs move for summary judgment on their claim that 

FedEx violated the Deduction Statute by improperly withholding

expenses from their wages. Plaintiffs seek to recover four 

types of deductions: (1) business support package deductions; 

(2) work accident and deadhead insurance deductions; (3) cargo 

insurance claim deductions; and (4) postage deductions. Doc. 

No. 46 at 11–13. 

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The Deduction Statute bars employers from withholding wages 

from an employee unless the withholding is authorized by an 

exception recognized in the statute. At the beginning of the 

class period, the statute provided in pertinent part that: 

No employer may withhold or divert any portion of an 

employee's wages unless: . . . (b) The employer has a 

written authorization by the employee for deductions 

for a lawful purpose accruing to the benefit of the 

employee as provided in regulations issued by the 

commissioner.

N.H. Rev. Stat. Ann. § 275:48 (2002). In 2004 and 2005, the 

statute was amended to add exceptions to the general prohibition 

on deductions that are not relevant to the current dispute. In 

2007, the statute was amended again to include several 

additional exceptions that had previously been included in the 

regulations adopted to implement the statute.

 Plaintiffs argue 

that they are entitled to partial summary judgment on the 

Deduction Claim because the deductions that were made by FedEx 

during the class period were not authorized under the statute. 

FedEx does not argue that any of the deductions at issue 

here were expressly authorized by any version of the Deductions

Statute that was in effect during the class period. Nor does it 

contend that the deductions were expressly authorized by the 

statute’s implementing regulations. Instead, it cites what it 

argues is a clarifying amendment to the statute that was enacted 

Case 1:05-cv-00145-PB Document 74 Filed 09/10/13 Page 22 of 26
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after the class period ended and argues that the amendment makes 

it clear that the deductions were authorized by implication 

under earlier versions of the statute. That amendment, which 

was adopted in 2011, adds to the list of deductions permitted 

under the statute deductions that are made:

For any purpose on which the employer and employee 

mutually agree that does not grant financial advantage 

to the employer, when the employee has given his or 

her written authorization and deductions are duly 

recorded. 

N.H. Rev. Stat. Ann. § 275:48 I (b)(12) (2011). 

I reject FedEx’s argument. Although FedEx claims that the 

2011 amendment clarifies earlier versions of the Deduction 

Statute, it has failed to identify any ambiguous statutory text 

that the amendment was intended to clarify. The statute itself 

is quite clear in specifying that deductions are not permitted 

unless they are authorized by the statute itself or in 

regulations issued by the Department of Labor. FedEx does not 

point to any statutory exceptions to the general prohibition on 

deductions that the 2011 amendment was intended to clarify. Nor 

does it explain how the 2011 amendment could have clarified the 

statute’s implementing regulations.

FedEx also invokes N.H. Code Admin. R. Ann. Lab 803.03(b)

to support its argument that the Deduction Statute must be 

Case 1:05-cv-00145-PB Document 74 Filed 09/10/13 Page 23 of 26
24

construed to authorize deductions even if they are not expressly 

authorized in the statute or its implementing regulations. Lab 

803.03(b) bars an employer from requiring an employee or an 

applicant for employment to “pay” for “the cost of a medical 

examination, non-required drug or alcohol testing, records 

required by the employer, or any item required by and for the 

benefit of the employer.” FedEx notes that neither the statute 

nor the regulations authorize deductions for the kind of 

expenses covered by Lab 803.03(b). It then reasons that the 

statute must authorize deductions that are not expressly 

exempted from the general prohibition on deductions because 

otherwise Lab 803.03(b) would be superfluous. I reject this 

argument for two reasons. First, it is by no means clear that 

Lab 803.03(b) would be superfluous unless the Deduction Statute 

is read to authorize deductions that are not expressly exempted. 

Lab 803.03(b) is a limitation on an employer’s ability to 

require any employee to “pay” for certain business-related 

expenses. It does not apply only to deductions. Thus, it would 

not be superfluous if the statute is construed to authorize only 

deductions that are expressly exempted. Second, the 

construction of the statute that FedEx proposes is inconsistent 

with the statute’s text, which plainly establishes a general 

Case 1:05-cv-00145-PB Document 74 Filed 09/10/13 Page 24 of 26
25

prohibition on deductions unless they are authorized in the 

statute itself or the regulations implementing the statute. I 

decline to adopt an interpretation of the statute that is 

contrary to its plain meaning even if it would render a 

regulatory interpretation of that statute superfluous. 

Because I am unpersuaded by FedEx’s claim that the 2011 

amendment was intended merely to clarify the law as it existed 

during the class period, and FedEx has failed to offer any other 

persuasive argument that the plaintiffs’ motion should not be 

granted, I determine that plaintiffs are entitled to partial 

summary judgment with respect to the Deduction Claim.7

V. CONCLUSION

Finding that plaintiffs’ claims are not preempted by the 

FAAAA, I deny FedEx’s motion for summary judgment (Doc. No. 44) 

to the extent that it is based on preemption; grant the 

 

7 To the extent that FedEx claims that the 2011 amendment should 

apply retroactively, it does so only in a conclusory fashion 

that does not require independent analysis. See Doc. No. 53 at 

21. In any event, it appears likely that any attempt to apply 

the 2011 amendment to conduct that occurred prior to its 

adoption would be unlikely to survive a challenge based on the 

New Hampshire Constitution’s prohibition on retrospective 

legislation. See, e.g., Maplevale Builders, LLC v. Danville, 

No. 2012-485, 2013 WL 2451499, at *5 (N.H. June 5, 2013)

(describing constitutional prohibition on retrospective 

legislation).

Case 1:05-cv-00145-PB Document 74 Filed 09/10/13 Page 25 of 26
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plaintiffs’ motion for partial summary judgment (Doc. No. 39) on 

their illegal deductions claim (Count II); and deny both 

parties’ motions for summary judgment on plaintiffs’ 

reimbursement claim (Count VIII) without prejudice. 

SO ORDERED.

/s/Paul Barbadoro

Paul Barbadoro

United States District Judge

September 10, 2013

cc: Susan E. Ellingstad, Esq.

Jordan M. Lewis, Esq.

Edward K. O’Brien, Esq.

Jozef Kopchick, Esq.

Kenneth Sansom, Esq.

Leann M. Walsh, Esq.

James C. Rehnquist, Esq.

Lucy J. Karl, Esq.

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