A FedEx Ground Services lawsuit details a series of events that led to the filing of a complaint against an Independent Contractor. According to the complaint, the contractor was hired by FEDEX to install and repair underground sewer lines in a large office building. From the beginning, the job seemed “to be more than simple surface repair.”
According to the complaint, FEDEX had several rules and regulations in place for the job. The first rule said that the contractor “must not dig above the ground line of the building or tunnel through the soil.” The second rule said that the contractor “cannot dig in a way that could cause damage or injury to an individual or a member of the public.” There were also other requirements, the company had for all contractors that it employed. One requirement said that the contractor is insured and have a permit from FEDEX.
On the day of the job, according to the complaint, the contractor did not disclose either his insurance or permit to FEDEX. He told the employees that he would be insured and had a permit, when in actuality, he did not have either of these. When asked why he did not have either of these, the contractor stated that he did not know what the requirements were and did not care. FEDEX employees saw the hole in the ground and complained to him about it. Instead of taking proper action from that point forward, the contractor instead chose to back away from the situation.
When he later tried to close the business, the plaintiff’s attorney contacted FEDEX and informed them of the circumstances surrounding the matter. FEDEX then sent an investigation team to the scene that interviewed the witnesses, interviewed the employees and performed its own investigation. After interviewing the witness, the investigators determined that the evidence showed that the contractor was guilty of contracting work without having proper authorization. Accordingly, the company immediately recalled all of its workers and closed the business. The company then filed suit against the contractor in county court.
The company’s attorney attempted to have the case thrown out on the basis that FEDEX was not a government agency. A judge rejected this argument and allowed the suit to proceed. Once again, the defendant chose to avoid liability by seeking bankruptcy protection from the massive financial loss. This time, the company was forced into a position where it had to pay tens of thousands of dollars to retain the services of an experienced attorney to defend its position.
Despite this poor track record, there are still businesses that use FEDEX to do their construction jobs. They must carefully account for each individual contractor’s taxes and benefit packages to ensure that they are not breaking any laws or regulations. If an owner, manager or employee of a company engages in accounting practices that go contrary to applicable Federal, State or Local tax laws, such business owners and employees can be held personally liable for the payment of back taxes and penalties.
