Friday, January 18, 2008

California Trial Judge Said RPS-IRS 1995 Agreement “Not Worth the Paper It Is Written On”

FedEx managers regularly point to the RPS-IRS 1995 Agreement in defending its contractor model. RPS is the predecessor company to FedEx Ground. With the IRS in 2007 preliminarily determining that FedEx Ground and Home Delivery drivers are employees and not contractors, FedEx still clings to the decade old agreement as critical to affirming the company’s position. But in the Estrada class action lawsuit in California, the trial judge reviewed the probative value of including the RPS-IRS 1995 Agreement into evidence and the judge concluded, “If one actually reads the letter, it is not terribly convincing I quote, ‘This letter does not preclude any owner-operator from filing an SS-8 to request an employment status determination of the relationship with RPS. The determination of employment status by the Service will be based upon an analysis of the facts as presented by the worker and RPS’ In effect, what you have here is an opinion based upon the representations and statements made by the lawyers for RPS The fact the IRS believed such status was not static is based upon the next to last paragraph which I read into the record. As such I believe the letter is relevant only to show that RPS received this letter and it therefore goes to the beliefs of the parties. But as an opinion in and of itself, I think it is really not worth the paper it is written on.”

Read full RPS-IRS 1995 Closing Agreement and the rest of the Judge's statements on it here.

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