In Schwann v. FedEx Ground Package System, Inc. the U.S. District Court for the District of Massachusetts denied class certification in a case brought by FedEx delivery drivers because individualized factual inquiries with respect to the circumstances of each driver would have been required in order to adjudicate their claims.
The plaintiffs in the case claimed that FedEx had violated the Massachusetts independent contractor statute, Massachusetts General Laws ch. 149, § 148B (the IC Statute) by classifying them as independent contractors rather than employees. They sought certification pursuant to Rule 23 of the Federal Rules of Civil Procedure (Rule 23) of a class of Massachusetts drivers who had not been included in a prior settlement of similar claims against FedEx.
The IC Statute requires that all workers are classified as employees unless they satisfy three criteria: (1) they perform their work "free from control" by the employer, (2) their work is performed "outside the usual course of business" of the employer, and (3) they maintain an "independently established . . . business of the same nature as that involved in the service performed."
In order to obtain class certification under Rule 23, a plaintiff must show, among other things, that "questions of law or fact common to class members predominate over any questions affecting only individual members." The plaintiffs did not challenge FedEx's assertion that significant individualized evidence would be required in order to determine whether the first and third criteria of the IC Statute were met. However, the plaintiffs argued that they could prove they did not meet second prong – i.e., that the work they performed was within the "usual course of business" of FedEx – using class-wide evidence. They asserted that because a worker must meet all three prongs of the test in order to be considered an independent contractor, the court would never need to consider the questions that required individualized proof.
The Court rejected the plaintiffs' argument, holding that it was premature to determine whether it could avoid looking at any of the prongs of the IC statute. The Court acknowledged the recent U.S. Supreme Court ruling in Comcast Corp. v. Beherend that courts may address questions related to the merits of the case when those questions overlap with the Rule 23 inquiry. However, the Court determined that the plaintiffs' argument required a broader merits analysis than was appropriate under the circumstances. The Court stated that the plaintiffs' argument attempted to "shortcut the statutory test" and improperly asked the court to "conclude[e] from the outset that FedEx's independent contractor defense must inevitably fail."
Schwann is significant because it was one of the first cases following the Supreme Court decision in Comcast to address the scope of a federal court's authority to address merits questions in the context of a Rule 23 motion for class certification. The Court in Schwann interpreted the Comcast decision in a relatively restrictive manner but other courts may find that they have broader authority.