The fight between FedEx and it’s delivery drivers heated up to full battle on Friday, when the company filed a federal lawsuit against their most vocally disgruntled contractor, Spencer Patton. They’re trying to head off an illegal strike targeting this year’s “Black Friday.” It’s looking like no matter what the outcome, consumers are going to be caught in the squeeze.
FedEx fights over delivery fees
The independent contractors who deliver freight for FedEx Ground are losing money. The company isn’t real inclined to remedy that situation in any meaningful way. So, the contractors are threatening to shut down.
For leverage, they plan to do it right before the huge Black Friday retail shopping frenzy which kicks off the holiday buying season. They aren’t allowed to go on strike because “coordinated action would be considered a violation of antitrust law that prevents separate companies from working in concert with one another.” They don’t care and they’re doing it anyway.
Altogether, there are more than 6,000 independent businesses which make the deliveries for FedEx. They range in size from small companies to fleets of more than 100 drivers. Thanks to Joe Biden and the rising cost of fuel, contractors across the board are losing money.
FedEx filed a lawsuit in Tennessee seeking an injunction against one of its largest contractors, Spencer Patton, who is urging the company to better compensate delivery providers. FedEx alleges Patton's actions are a campaign to promote his own company https://t.co/hjlywjAgi5 pic.twitter.com/A0nbDYa3l5
— Reuters Business (@ReutersBiz) August 27, 2022
They’re currently in the process of forming a trade group. Even so, they aren’t allowed to “coordinate a shutdown, the way employees can go on strike under U.S. labor law.” Despite the weight of law against them, “talk of a pre-Black Friday shutdown is spreading among the contractors.” Spencer Patton is the one with the big target on his back.
“My business is losing money every day and my business will not be able to continue operation past November 25.” He’s not going on strike, he’s going under and calling it quits.
“Peak season is one of highest cost of operations time of the year. I have to double the number of trucks, hire drivers. I will not do so if things don’t change.” When FedEx heard his plight, they gave him an answer. “Don’t bother hiring anyone.” They canceled his contract for making trouble and sued him to make him stop talking.
Lawsuit was expected
On Friday, August 26, the corporate lawyers “filed a federal lawsuit against Patton’s company seeking a court order to stop him talking about a possible shutdown, and asking for unspecified monetary damages.”
The paperwork spells out that “Patton is seeking to get FedEx Ground contractors riled up as part of ‘a promotional campaign for the consultancy, brokerage and other services‘ that a separate business he runs, Route Consultant, provides to other contractors.”
The global corporation isn’t naive enough to believe that Patton isn’t “attempting to influence a group walk-out or boycott starting on Black Friday.” The contractor issued a statement in reply.
“I knew when I started speaking on behalf of small business owners in the community that a lawsuit was a likely weapon FedEx would deploy.” They can target him but the other contractors will benefit from the publicity. The company knows that.
To get out in front of the public relations nightmare and help assure anxious retailers that their shelves will be full by Thanksgiving, The shipper gave CNN Business some contact numbers for happy and profitable contractors to debunk what Patton is telling them. They confirmed it instead. “FedEx Ground provided CNN Business the names of several contractors who said they are doing OK financially despite the economic problems at some other contractors. But even some of those expressed concern what would happen if a significant number of contractors halt operations due to financial problems.”
As explained by Troy Fulsom, a contractor with about two-dozen drivers based in Fresno, “For me, luckily, I have an area where we’re booming, expanding. But our profit margins are thinner. Your heart goes out to those in that position who need to set the ultimatum. That’s a real concern if some people are shutting down operations, and what it would do to the business, and customers shifting away. With the talk out there, it is a scary thing.“
