Court Opinion

ID: 2721308
Source: CourtListenerOpinion
Date Created: 2014-08-27 18:00:35.243014+00
Date Added: 2024-06-11T15:43:24.148447
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

EDWARD SLAYMAN; DENNIS                    No. 12-35525
MCHENRY; JEREMY BRINKER; JON
LEIGHTER; DAVID SPICER,                     D.C. Nos.
individually and on behalf of all       3:05-cv-01127-HZ
others similarly situated,              3:07-cv-00818-HZ
               Plaintiffs-Appellants,

                 v.                        OPINION

FEDEX GROUND PACKAGE
SYSTEM, INC., DBA Fedex Home
Delivery, Inc.,
                Defendant-Appellee.

EDWARD SLAYMAN; DENNIS                    No. 12-35559
MCHENRY; JEREMY BRINKER; JON
LEIGHTER; DAVID SPICER,                     D.C. Nos.
individually and on behalf of all       3:05-cv-01127-HZ
others similarly situated,              3:07-cv-00818-HZ
                Plaintiffs-Appellees,

                 v.

FEDEX GROUND PACKAGE
SYSTEM, INC., DBA Fedex Home
Delivery, Inc.,
               Defendant-Appellant.
2                      SLAYMAN V. FEDEX

       Appeal from the United States District Court
                for the District of Oregon
       Marco A. Hernandez, 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

                           SUMMARY*

                           Oregon Law

    The panel reversed the Multidistrict Litigation Court’s
grant of summary judgment to FedEx Ground Package
System, Inc., its denial of plaintiff FedEx drivers’ motion for
partial summary judgment, and its certification of plaintiffs’
classes insofar as they sought prospective relief in two class
actions alleging that FedEx drivers in Oregon were
employees rather than independent contractors.

    The panel held under Oregon law that plaintiff FedEx
drivers were employees as a matter of law under both the
right-to-control and economic-realities tests. The panel

  *
    This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
                    SLAYMAN V. FEDEX                         3

remanded to the district court with instructions to enter
summary judgment for plaintiffs on the question of
employment status. The panel also held that one of the
classes lacked Article III standing to seek prospective relief,
and the other class’s claims for prospective relief became
moot before the Multidistrict Litigation Court certified the
class.

                         COUNSEL

Mark. A. Friel, Steve Douglas Larson, Scott Alden Shorr
(argued), Stoll Berne, Portland, Oregon, for Plaintiffs-
Appellants/Cross-Appellees.

Jonathan Hacker (argued), O’Melveny & Myers LLP,
Washington, D.C.; Anton Metlitsky, O’Melveny & Myers
LLP, New York, New York; Robert Schwartz and Scott
Voelz, O’Melveny & Myers LLP, Los Angeles, California,
for Defendant-Appellee/Cross-Appellant.

Richard Pianka, Arlington, Virginia, for Amici Curiae
American Trucking Associations, Inc. and Oregon Trucking
Associations, Inc.

                         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
4                   SLAYMAN V. FEDEX

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
work on those routes, they may do so only with FedEx’s
consent.

    FedEx contends its drivers are independent contractors
under Oregon law. Plaintiffs, two classes of FedEx drivers in
Oregon, contend they are employees. We agree with
plaintiffs.

                       I. Background

                   A. Factual Background

    Named plaintiffs, former FedEx drivers, represent two
classes comprising approximately 363 individuals who were
full-time delivery drivers for FedEx in Oregon at any time
between 1999 and 2009. 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
                    SLAYMAN V. FEDEX                        5

       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]
       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
6                    SLAYMAN V. FEDEX

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 per-
day and per-stop components. Drivers are expected to arrive
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
                    SLAYMAN V. FEDEX                         7

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 verify that [the driver]
is meeting the standards of customer service” required by the
OA. Managers are supposed to observe and record small
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 illegal conduct 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 “driving 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.”
8                   SLAYMAN V. FEDEX

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
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
                    SLAYMAN V. FEDEX                        9

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.

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
10                  SLAYMAN V. FEDEX

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.

    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.

    The OA requires drivers to comply with personal-
appearance standards and to 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 consolidated appeal involves two class actions
originally filed in the District of Oregon: Slayman v. FedEx
Ground Package System, No. 12-35525, and Leighter v.
FedEx Ground Package System, No. 12-35559. The basis for
both cases is plaintiffs’ claim that “FedEx improperly
classified its drivers as independent contractors, thereby
                     SLAYMAN V. FEDEX                        11

forcing them to incur business expenses and depriving them
of benefits otherwise owed to employees” under Oregon law.
Except where the differences matter to our holding, we do not
distinguish between the two cases.

    The Slayman plaintiffs brought claims for (1) illegal
deductions from wages under Or. Rev. Stat. § 652.610,
(2) fraud, (3) rescission of the OA, and (4) declaratory relief.
The Leighter plaintiffs brought claims for (1) illegal
deductions from wages under Or. Rev. Stat. § 652.610,
(2) rescission of the OA, (3) declaratory relief, (4) injunctive
relief, (5) unpaid overtime under Or. Rev. Stat. § 653.261 and
Or. Admin. R. 839-020-0030, and (6) unpaid wages. The
named plaintiffs in Slayman are Edward Slayman, Dennis
McHenry, and Jeremy Brinker. The named plaintiffs in
Leighter are Jon Leighter and David Spicer. All the named
plaintiffs except Leighter had stopped driving for FedEx
before the complaints were filed. Leighter stopped driving
for FedEx two months after the Leighter complaint was filed.

    Between 2003 and 2009, similar cases were filed against
FedEx in approximately forty states. The Judicial Panel on
Multidistrict Litigation consolidated these FedEx cases,
including Slayman and Leighter, for multidistrict litigation
(“MDL”) proceedings in the District Court for the Northern
District of Indiana (“the MDL Court”). 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
classes in both Slayman and Leighter, except for plaintiffs’
claims for rescission of the OA. The MDL Court certified the
Slayman plaintiffs’ damages claim under Federal Rule of
Civil Procedure 23(b)(3) and their claim for declaratory relief
under Rule 23(b)(2). The MDL Court certified the Leighter
12                  SLAYMAN V. FEDEX

plaintiffs’ damages claims as two subclasses under Rule
23(b)(3) and their claims for injunctive and declaratory relief
under Rule 23(b)(2).

    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, FedEx cross-
moved for summary judgment. However, FedEx did not
move for summary judgment in either Slayman or Leighter.
The MDL Court denied nearly all of the MDL plaintiffs’
motions for summary judgment and granted nearly all of
FedEx’s motions. In Slayman and Leighter, the MDL Court
granted summary judgment sua sponte to FedEx, holding that
plaintiffs were independent contractors as a matter of law.

    The MDL Court remanded Slayman and Leighter to the
district court to resolve the drivers’ rescission claims, for
which class certification had not been granted. The district
court granted summary judgment to FedEx on those claims
and entered final judgment. Plaintiffs timely appealed,
challenging only the MDL Court’s denial of their partial
motion for summary judgment and its grant of summary
judgment to FedEx. 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 decisions.

                   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
                     SLAYMAN V. FEDEX                        13

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)). We review the district court’s class-certification
decisions for abuse of discretion. Ellis v. Costco Wholesale
Corp., 657 F.3d 970, 980 (9th Cir. 2011).

                       III. Discussion

       A. Certification to the Oregon Supreme Court

    As an initial matter, plaintiffs request that we certify the
question of their status to the Oregon Supreme Court. We
decline to do so “because ‘controlling precedent’ is available
to guide us.” Fields v. Legacy Health Sys., 413 F.3d 943, 958
(9th Cir. 2005) (citation omitted). This case does not raise an
unsettled question of substantive state law. It simply requires
us to apply legal tests that Oregon courts have applied many
times in prior cases. See Kremen v. Cohen, 325 F.3d 1035,
1037 (9th Cir. 2003).

      B. Summary Judgment on Employment Status

    The MDL Court granted summary judgment to FedEx,
holding that plaintiffs are independent contractors as a matter
of law. 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
partial 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.
14                  SLAYMAN V. FEDEX

    The parties agree that Oregon law controls this dispute.
Plaintiffs’ claims under Or. Rev. Stat. § 652.610 are governed
by Oregon’s right-to-control test. See Cejas Commercial
Interiors, Inc. v. Torres-Lizama, 316 P.3d 389, 396 (Or. Ct.
App. 2013). The Leighter plaintiffs’ claims for unpaid
overtime under Or. Rev. Stat. § 653.261 and Or. Admin. R.
839-020-0030 are governed by Oregon’s economic-realities
test. Id. at 397.

    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 Oregon, the meaning
of a contract such as the OA is a question of law, unless it is
ambiguous and there is “competing extrinsic evidence” from
which a jury could resolve the ambiguity in favor of either
party. Dial Temp. Help Serv., Inc. v. DLF Int’l Seeds, Inc.,
298 P.3d 1234, 1236–37 (Or. 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 under both the right-to-control and economic-
realities tests.

                  1. Right-to-Control test

    Oregon’s right-to-control test requires courts to weigh
four factors: “(1) direct evidence of the right to, or exercise
of, control; (2) the furnishing of tools and equipment; (3) the
method of payment; and (4) the right to fire.” Stamp v. Dep’t
of Consumer & Bus. Servs., 9 P.3d 729, 731 (Or. Ct. App.
                    SLAYMAN V. FEDEX                        15

2000). We address each factor in turn, considering only
evidence applicable to all class members.

         a. Direct Evidence of the Right to Control

    Direct evidence of the right to control is the most
important factor under Oregon law. See Great Am. Ins. Co.
v. Gen. Ins. Co. of Am., 475 P.2d 415, 418 (Or. 1970); Stamp,
9 P.3d at 734–35. FedEx argues that the OA creates an
independent-contractor relationship. Oregon law is clear that
a contract’s recitation of an independent-contractor
relationship is not dispositive. See Schaff v. Ray’s Land &
Sea Food Co., 45 P.3d 936, 941 (Or. 2002); Wallowa Valley
Stages, Inc. v. Oregonian Publ’g Co., 386 P.2d 430, 433 (Or.
1963). What matters is what the contract, in actual effect,
allows or requires. See Jenkins v. AAA Heating & Cooling,
Inc., 421 P.2d 971, 972 (Or. 1966). 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. Cf.
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’”); Huggins v. FedEx Ground Package Sys., Inc.,
16                  SLAYMAN V. FEDEX

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). Further, FedEx
requires drivers to paint their vehicles a specific shade of
white, to attach FedEx decals, 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 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. The OA does not allow FedEx to set its drivers’
specific working hours down to the last minute, but it is clear
from the OA that FedEx has a great deal of control over their
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. See
Bowser v. State Indus. Accident Comm’n, 185 P.2d 891, 895,
899 (Or. 1947) (finding employee status where a log-hauler
                     SLAYMAN V. FEDEX                         17

could not load his truck before or after the time when the
employer’s loading crew arrived or left).

    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 time window for deliveries
directly with its customers. Compare Salem Decorating Ctr.,
Inc. v. Nat’l Council on Comp. Ins., 840 P.2d 739, 742 (Or.
Ct. App. 1992) (finding that installers were employees where
their employer negotiated contracts with customers), with
Pam’s Carpet Serv., Inc. v. Emp’t Div., 613 P.2d 52, 55 (Or.
Ct. App. 1980) (finding that installers who “negotiate[d]
directly with the customer” were independent contractors).
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
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 right-
to-control test does not require absolute control. See
Rubalcaba v. Nagaki Farms, Inc., 43 P.3d 1106, 1109 (Or.
2002) (noting that the Oregon Supreme Court has found
employee status despite “mixed” evidence of control); Castle
Homes, Inc. v. Whaite, 769 P.2d 215, 217 (Or. Ct. App. 1989)
(finding employee status where the employer “did not, in fact,
exercise control over many of the details of [the employee’s]
work, [but] did exercise control in certain significant
18                    SLAYMAN V. FEDEX

respects”). FedEx’s lack of control over some parts of its
drivers’ jobs does not counteract the extensive control it does
have the right to exercise.

     FedEx argues that it controls its drivers only with respect
to the results it seeks, not the manner in which drivers achieve
those results. See Great Am. Ins. Co., 475 P.2d at 417 (“The
test of right to control does not refer to the right to control the
results of the work but rather to the right to control the
manner and means of accomplishing the result.”). 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 “result” sought by FedEx
includes “every exquisite detail” of the delivery driver’s
fashion choices and grooming. Ruiz, 2014 WL 2695534, at
*7; see id. 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 Oregon law.

     In Bowser, the Oregon Supreme Court found that “a log
hauler furnishing his own truck and hauling logs for [a
logging] company” was an employee of the company. 185
P.2d at 891–92. The court emphasized that the company told
its haulers to deliver specific loads to specific locations. It
held that the company’s control over “what load [its drivers]
are going to take . . . strongly tends to establish the
relationship of employer and employee.” Id. at 898. The
Oregon Supreme Court reaffirmed Bowser in Rubalcaba,
which involved a hauler who transported vegetables for a
                    SLAYMAN V. FEDEX                        19

farmer. The hauler owned his own truck and could work for
other farms. 43 P.3d at 1107–08. Nevertheless, the court
held that the farmer had the right to control the hauler,
finding the case “virtually identical” to Bowser. Id. at 1111.
The farmer “exercised a degree of control over the system for
loading its product into the trucks.” Id. The farmer’s
“harvesting crew” loaded haulers’ trucks and “directed . . .
haulers to the field that was being harvested and indicated
where to take the produce that had been loaded.” Id. (internal
quotation marks omitted). The court wrote, “As in Bowser,
there [is] no suggestion that [the hauler] here had any choice
over which load he was going to take.” Id.

    In contrast to the facts in Bowser and Rubalcaba, a
heating company’s salespeople in Jenkins “were free to keep
such hours, work such territory, and make as many or as few
calls as they saw fit.” 421 P.2d at 972. The Oregon Supreme
Court held on these facts that the salespeople were
independent contractors. Id. Similarly, the Oregon Supreme
Court held in Schaff that a company’s salespeople were
independent contractors where they “determin[ed] when and
how to work” and “selected and established their own
routes.” 45 P.3d at 938; see also Avanti Press, Inc. v. Emp’t
Dep’t Tax Section, 274 P.3d 190, 192 (Or. Ct. App. 2012)
(holding that a saleswoman was an independent contractor
where she “set her own work schedule and decided how
frequently to visit customers”).

    FedEx treats its drivers more like the haulers in Bowser
and Rubalcaba than like the salespeople in Jenkins and
Schaff. FedEx requires its drivers to load and unload
packages at FedEx terminals every working day. It assigns
each driver a specified service area and tells drivers where in
their service area to deliver packages. As in Bowser and
20                   SLAYMAN V. FEDEX

Rubalcaba, FedEx drivers have no control over which
packages they deliver. This “strongly tends to establish the
relationship of employer and employee.” Rubalcaba, 43 P.3d
at 1111 (quoting Bowser, 184 P.2d at 898) (internal quotation
marks omitted); see also Stamp, 9 P.3d at 731 (finding right
to control where the employer “directed when and where” the
employee worked); HDG Enters. v. Nat’l Council on Comp.
Ins., 856 P.2d 1037, 1040 (Or. Ct. App. 1993) (holding that
providing “work orders, blueprints and specifications” was
control over the manner of floor installers’ work (emphasis
omitted)).

    Like the Oregon Supreme Court in Bowser and
Rubalcaba, we can find “no difference at all between [FedEx
drivers’] actual situation in so far as control is concerned and
the situation of one hired to drive a [delivery] truck . . .
owned and operated by [FedEx].” Rubalcaba, 43 P.3d at
1109 (quoting Bowser, 185 P.2d at 898) (internal quotation
marks omitted). According to FedEx, the primary difference
is that it gives drivers “entrepreneurial opportunities”—the
ability to take on multiple routes and vehicles and to hire
third-party helpers—that are inconsistent with employee
status. FedEx relies not on Oregon 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
                    SLAYMAN V. FEDEX                        21

[drivers] are employees [was] clearly outweighed by evidence
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 Oregon has replaced its longstanding right-to-
control test with the new entrepreneurial-opportunities test
developed by the D.C. Circuit. Instead, Oregon cases
indicate that entrepreneurial opportunities do not undermine
a finding of employee status when a company must consent
to its workers’ exercise of those opportunities. In Blaine v.
Ross Lumber Co., 355 P.2d 461 (Or. 1960), the Oregon
Supreme Court found that the plaintiff was an employee
where he “could hire a driver, though apparently only with
[the employer’s] consent.” Id. at 465. And in Collins v.
Anderson, 596 P.2d 1001 (Or. Ct. App. 1979), the Oregon
Court of Appeals found that a worker was an employee where
his choice of helper was “subject to the approval of the
employer.” Id. at 1003; cf. Or. Drywall Sys., Inc. v. Nat’l
Council on Comp. Ins., 958 P.2d 195, 197–98 (Or. Ct. App.
1998) (finding a general contractor had no right to control
subcontractors who “were free to hire their own workers”
without the contractor’s consent).

    The entrepreneurial opportunities available to FedEx’s
drivers are equivalent to those in Blaine and Collins. 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
in the OA limits FedEx’s discretion to withhold consent to
additional vehicles or routes, or to decide whether a
replacement driver is “acceptable.” James Primm, a Division
22                   SLAYMAN V. FEDEX

Vice President for FedEx, testified in his deposition that any
driver seeking to use a helper must get approval to do so.
Similarly, 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. Whether FedEx ever exercises its right of
refusal is irrelevant; what matters is that the right exists. See
Jenkins, 421 P.2d at 973 (“As long as [the right to control]
exists, it is of no consequence that the employer may not have
exercised it.”).

                       b. Other Factors

    In light of the powerful evidence of FedEx’s right to
control its drivers, none of the remaining right-to-control
factors sufficiently favors FedEx to allow a holding that
plaintiffs are independent contractors. See Great Am. Ins.
Co., 475 P.2d at 418 (identifying evidence of the right to
control as the “primary” factor); Stamp, 9 P.3d at 734–35
(holding that where “the right to control factor indicate[d] an
employment relationship” and the other factors were neutral,
“the right to control factor [was] dispositive”).

    The second factor, the furnishing of tools and equipment,
slightly favors FedEx. FedEx’s drivers provide their own
vehicles and are not required to get other equipment from
FedEx. On the other hand, the vast majority of drivers do get
their other equipment from FedEx. Indeed, the drivers’
scanners are not readily available from other sources.
Numerous Oregon cases find employee status even though
the employee provides his or her own vehicle or tools. E.g.,
Rubalcaba, 43 P.3d at 1111; Great Am. Ins. Co., 475 P.2d at
418; Blaine, 355 P.2d at 465; Bowser, 185 P.2d at 891;
Stamp, 9 P.3d at 734.
                     SLAYMAN V. FEDEX                          23

    The third 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). See Stamp, 9 P.3d at 734 (holding that
where payment is not hourly or per-job, the method of
payment is a neutral factor).

    The last factor, right to terminate, slightly favors FedEx.
Workers who can be terminated only for cause may
nonetheless be employees. See Giltner v. Commodore
Contract Carriers, 513 P.2d 541, 542 (Or. Ct. App. 1973)
(finding employee status where employer could fire employee
for breach of “duties or obligations”). However, “[t]he fact
that a party could terminate a contract only for bona fide
reasons of dissatisfaction” supports a finding of independent-
contractor status. Or. Drywall Sys., 958 P.2d at 198. An
arbitration clause in a contract is evidence against an
unqualified right to terminate. Bob Wilkes Falling, Inc. v.
Nat’l Council on Comp. Ins., 878 P.2d 1136, 1139 (Or. Ct.
App. 1994). Here, the OA contains an arbitration clause and
does not give FedEx an unqualified right to terminate.
FedEx’s right under the OA to terminate its drivers, while
broad, is somewhat constrained. FedEx may terminate 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.” We conclude that this
factor does not favor FedEx enough to allow a finding that its
drivers are independent contractors. See Giltner, 513 P.2d at
542.
24                   SLAYMAN V. FEDEX

                         c. Summary

    Viewing the evidence in the light most favorable to
FedEx, we conclude that the OA grants FedEx a broad right
to control the manner in which its drivers perform their work.
The first and most important factor of the right-to-control test
thus strongly favors employee status. The other three 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 Oregon’s right-to-control
test. See Rubalcaba, 43 P.3d at 1111; Stamp, 9 P.3d at 733.

                 2. Economic-Realities Test

    Plaintiffs also are employees under Oregon’s economic-
realities test. The economic-realities test is broader than the
right-to-control test, covering “situations where the worker is
not directed or controlled by the employer but, nevertheless,
as a matter of economic reality, depends on the employer.”
Cejas, 316 P.3d at 394. In Cejas, the court applied the
economic-realities test by looking to a number of different
factors designed to determine whether a company formally or
functionally “controls the terms and conditions of the
worker’s employment.” Id. at 399. FedEx, as we have
already held, controls the terms and conditions of plaintiffs’
employment. FedEx’s drivers are a permanent and important
part of its business. They work every day FedEx delivers
packages, for 9.5 to 11 hours per day. They are overseen by
FedEx-employed managers, who evaluate their job
performance and may refuse to let them work. Therefore,
they are also employees under the economic-realities test.
See id. at 398–400.
                    SLAYMAN V. FEDEX                       25

                 C. FedEx’s Cross-Appeal

    FedEx cross-appeals the MDL Court’s class-certification
decisions on two grounds. First, FedEx argues that the named
plaintiffs, who no longer work for FedEx, cannot seek
prospective relief on behalf of current FedEx drivers.
Therefore, FedEx argues, we should reverse the MDL Court’s
certification of plaintiffs’ claims for injunctive and
declaratory relief. Second, FedEx argues that we should
reverse the MDL Court’s certification of all of plaintiffs’
claims if we rely on individualized evidence in reversing the
MDL Court’s grant of summary judgment to FedEx.

      1. Plaintiffs’ Ability to Seek Prospective Relief

    In both Slayman and Leighter, the MDL Court certified
the named plaintiffs’ claims for damages under Federal Rule
of Civil Procedure 23(b)(3) and their claims for prospective
relief under Rule 23(b)(2). FedEx argues that the named
plaintiffs cannot represent the classes certified under Rule
23(b)(2). FedEx does not object to the named plaintiffs’
representation of the Rule 23(b)(3) classes.

    FedEx argues that the named plaintiffs, as former FedEx
drivers, lack Article III standing to seek prospective relief.
“In a class action, the plaintiff class bears the burden of
showing that Article III standing exists.” Ellis, 657 F.3d at
978. Standing requires that (1) “the plaintiff suffered an
injury in fact,” (2) “the injury is fairly traceable to the
challenged conduct,” and (3) “the injury is likely to be
redressed by a favorable decision.” Id. (internal quotation
marks omitted). “Standing exists if at least one named
plaintiff meets the requirements.” Id.
26                   SLAYMAN V. FEDEX

     “When evaluating whether [the standing] elements are
present, we must look at the facts as they exist at the time the
complaint was filed.” Am. Civil Liberties Union of Nev. v.
Lomax, 471 F.3d 1010, 1015 (9th Cir. 2006) (emphasis and
internal quotation marks omitted). Named plaintiffs who
were not FedEx drivers at the time the complaint was filed
lacked standing to seek injunctive or declaratory relief
because they “would not stand to benefit from” such relief.
Walsh v. Nev. Dep’t of Human Res., 471 F.3d 1033, 1037 (9th
Cir. 2006); see Dukes v. Wal-Mart Stores, Inc., 603 F.3d 571,
623 (9th Cir. 2010) (en banc), rev’d on other grounds, 131 S.
Ct. 2541 (2011). However, any named plaintiff who was a
FedEx driver at the time the complaint was filed did have
standing to seek injunctive and declaratory relief. See Dukes,
603 F.3d at 623. Because none of the Slayman class’s named
plaintiffs worked for FedEx at the time the complaint was
filed, the Slayman class lacked Article III standing to seek
prospective relief. See id. On the other hand, the Leighter
class had standing to seek prospective relief because one of
its named plaintiffs, Jon Leighter, was a FedEx driver at the
time the complaint was filed.

    Leighter, however, stopped driving for FedEx in August
2007, almost two years before the MDL Court’s class-
certification decision. Leighter was the only named plaintiff
with standing to seek prospective relief. When he stopped
driving for FedEx, his claims for prospective relief became
moot because he could no longer benefit from such relief.
See Walsh, 471 F.3d at 1037. Under these circumstances, the
Leighter class’s claims for prospective relief should not have
been certified. See Kuahulu v. Emp’rs Ins. of Wausau, 557
F.2d 1334, 1336–37 (9th Cir. 1977). “It is . . . true that a
class action is not automatically moot because the named
representative’s claim is moot.” Id. at 1336. If the district
                    SLAYMAN V. FEDEX                       27

court certifies a class before the plaintiff’s claim becomes
moot, “mooting the putative class representative’s claim will
not moot the class action.” Pitts v. Terrible Herbst, Inc.,
653 F.3d 1081, 1090 (9th Cir. 2011); see Sosna v. Iowa,
419 U.S. 393, 399–403 (1975). But where, as here, the
plaintiff’s claim becomes moot before the district court
certifies the class, the class action normally also becomes
moot. Kuahulu, 557 F.2d at 1336–37; see Bd. of Sch.
Comm’rs of Indianapolis v. Jacobs, 420 U.S. 128, 129 (1975)
(per curiam).

    An exception to this rule exists for claims that “are so
inherently transitory that the trial court will not have even
enough time to rule on a motion for class certification before
the proposed representative’s individual interest expires.”
Pitts, 653 F.3d at 1090 (quoting Cnty. of Riverside v.
McLaughlin, 500 U.S. 44, 52 (1991)) (internal quotation mark
omitted). Such claims are “capable of repetition, yet evading
review,” and thus do not become moot. Id. (internal
quotation marks omitted). In the absence of any evidence
that FedEx terminated Leighter’s employment after the
complaint was filed, his claims were not “transitory” or
“capable of repetition, yet evading review.” See id. at 1091
(defining a “transitory” claim as one that “would evade
review,” either “by its very nature” or “by virtue of the
defendant’s litigation strategy”).

    We therefore hold that the Slayman class lacked Article
III standing to seek prospective relief, and the Leighter
class’s claims for prospective relief became moot before the
MDL Court certified the class. Therefore, we reverse the
MDL Court’s certification of plaintiffs’ class claims for
prospective relief.
28                  SLAYMAN V. FEDEX

          2. Reliance on Individualized Evidence

    FedEx argues that we should reverse the MDL Court’s
certification of all of plaintiffs’ claims if we “rel[y] on
individualized (rather than classwide) evidence to reverse the
MDL [C]ourt’s grant of summary judgment.” Our decision
does not rely on any individualized evidence. FedEx’s
argument is therefore unavailing.

                         Conclusion

    We hold that plaintiffs in both class actions are employees
as a matter of law under Oregon’s right-to-control and
economic-realities tests. 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. We reverse the MDL Court’s decision to
certify plaintiffs’ classes insofar as they seek prospective
relief. The parties shall bear their own costs on appeal.

     REVERSED and REMANDED.