Opinion ID: 2685504
Heading Depth: 1
Heading Rank: 1

Heading: The Employer/Independent Contractor Issue

Text: FedEx, in addition to employing its own drivers and vehicles to deliver goods to its shipper-customers, contracts with independent motor carriers to transport goods 1 The Honorable John M. Gerrard, United States District Judge for the District of Nebraska. -2- and trailers between FedEx service centers. At times, these carriers provide the drivers, the tractors, and the trailers for this service. At other times, FedEx retains “subhaulers” that provide drivers and tractors to pull FedEx trailers in what FedEx refers to as a “power only” relationship. In mid-September 2007, Fresh Start and FedEx entered into a written Subhaul Agreement providing that Fresh Start would provide transportation services as an independent contractor. In an Addendum, Fresh Start agreed to comply with twelve detailed requirements when pulling FedEx-owned trailers on a “power only” basis. On October 26, Fresh Start’s owner received a power-only assignment from FedEx’s central dispatch and assigned driver Velichkov to complete the job. He drove the tractor to FedEx service centers to pick up and drop off trailers. The accident occurred during the last leg of the assignment, when Velichkov was transporting two FedEx-owned trailers from the Cincinnati service center to the Salt Lake City service center. Under Nebraska law, one who employs an independent contractor is generally not liable for physical harm caused to another by the acts or omissions of the contractor or its servants. Plaintiffs’ complaint alleged that FedEx was nonetheless liable for Velichkov’s negligence because he was acting as FedEx’s employee or servant at the time of the accident. Whether a truck driver is acting as an employee or as an independent contractor “depends on the facts underlying the relationship of the parties irrespective of the words or terminology used by the parties to characterize and describe their relationship.” Kime v. Hobbs, 562 N.W.2d 705, 711 (Neb. 1997). Thus, the Subhaul Agreement, which provided that Fresh Start was an independent contractor, is relevant but not controlling. Though ordinarily a question of fact, “where the facts are not in dispute and where the inference is clear that there is, or is not, a master and servant relationship, the matter is a question of law.” Id. Applying the ten factors considered by the Supreme Court of Nebraska in Kime and other cases, the district court concluded that Fresh Start, and therefore its employee, Velichkov, were independent contractors of FedEx as a matter of Nebraska -3- law. Addressing the critical control factor, the district court acknowledged that the Addendum to the Subhaul Agreement placed conditions on the manner in which Fresh Start and its servants could transport FedEx-owned trailers but concluded that these requirements “were to assure performance of the delivery -- in other words, to control ‘the final result of the work’ instead of ‘the specific manner in which the work is performed.’” Harris v. Velichkov, 860 F. Supp. 2d 970, 983 (D. Neb. 2012), quoting Omaha World-Herald v. Dernier, 570 N.W.2d 508, 514 (Neb. 1997). In addition, the court reasoned, “plaintiffs’ focus on the element of control ignores the remaining nine factors listed above, several of which weigh (and weigh heavily) in favor of an independent contractor relationship.” Id. On appeal, plaintiffs argue the district court erred in granting summary judgment on this issue because it misconstrued in FedEx’s favor the extent to which FedEx controlled how power-only drivers performed this service. We disagree. The district court applied the proper standard under Nebraska law, carefully considered the control factor, and concluded “[t]here is no evidence from which a reasonable trier of fact could conclude that Fresh Start was FedEx’s ‘employee’ -- much less that Velichkov was.” Id. at 983-84. The minor ways in which plaintiffs argue the district court improperly credited FedEx’s view of the facts were not material to this ruling. The use of an independent power-only contractor to pull FedEx trailers between FedEx service centers was not comparable to the agreement in Huggins v. FedEx Ground Package System, Inc., where FedEx required an independent contractor and its drivers “to look and act like FedEx employees while they performed FedEx [package delivery] services” for FedEx customers. 592 F.3d 853, 859 (8th Cir. 2010).