FedEx Home Delivery HR Model for Drivers Wilmington, Mass, 32 contractors at 2 facilit. Recruitment – Independent Contractors – DOT driver requirements (e.g. license, drug screen) Operating Agreement - “take-it-or-leave it” – drivers are ind. contractors – 14-Day FedEx Home Developed Training Prog. – FedEx Home may not determine breaks, hours, or routes taken – Must meet FedEx performance stds. 1

Operating Agreement (cont.) Wear Fed Ex Home Uniforms Maintain personal appearance Termination by driver or FedEx if business in area declines Vehicles – Purchased (prices from $15-38,000) – Maintained by drivers Normal operating maintenance and upkeep DOT Standards for safety FedEx Home standards for appearance and signage – Use While delivering FedEx packages Tu-Sat as required), no other uses May use vehicle for revenue when not on FedEx routes, 1 driver did so Package Delivery – Service delivery area determined and may be changed by FedEx home – Must deliver all packages on truck scheduled for that day – Must permit FedEx Home management to ride with them from time to time 2 all day service rides per year Given packages but may deliver in order chosen Deliveries based on customer contacts to FedEx Home, not drivers 2

Operating Agreement (cont.) Compensation 2005 – main elements – per stop $1.29 regular $6.50 per appointment $2.75 evening $.50 for signature – $.22 per package – $.20/mile between 201 and $400 – No fringe benefits – Bonuses based on meeting Fed Ex performance goals – Total Gross Revenue Median and Mode $60-$90,000 Range – High >$150,000 – Low $3500 3

Operating Agreement (cont.) Purchase scanners and Business Support Package Insurance partially provided by drivers through a preferred vendor Time off – purchase time off through program and FedEx Home will assign a “swing contractor” – Hire someone to drive route if approved by Fed Ex Home Multiple route drivers must hire other drivers who must be approved by FedEx Home – 3 of 32 drivers Routes may be sold – Buyers must be acceptable to FedEx Home – Only 1 route sold 4

RD Analysis 6 Cases all found drivers ees – 3 Roadway cases – 3 FedEX Home cases Bases for finding of ee status – All do business in name of FedEx Home rather than their own names uniforms Logos Vehicle specifications FedEx Home training – Non-Fed Ex work Not while delivering for Fed Ex During off hours but no drivers do so – Due to constraints of relationship with Fed Ex- 5

RD Bases for finding of ee status (cont). FedEx maintains substantial control over performance – Determines and can change service area – Establishes Tu-Sat schedule – Determines day of delivery Constrains control over daily schedule and breaks – “take-it-or-leave-it” agreement – Rates of compensation established by Fed Ex Home – Bonuses tied to compliance with guidelines – Business support for drivers 6

FedEX Home Delivery v. NLRB CA DC, 2009 Delivery drivers are independent contractors (IC’s) and therefore not covered by NLRA – Denies enforcement of NLRB finding of refusal to bargain Reasoning – “Right of Control” test accepted since late 1960’s but definition of “control”is ambiguous Criteria – Supervising performance? – Monitoring performance? – Improving performance? Court looking for an objective, “bright line” test – Criteria for IC’s evolved Significant entrepreneurial opportunity for gain or loss May use trucks for own purposes if they mask FedEx logo Fact that many contractors do not use trucks to earn income is less important than the fact that they may so use them – Other factors May hire additional drivers May operate multiple routes May sell routes 7

FedEX Home Delivery v. NLRB CA DC, 2009 Dissent – No evolution to entrepreneurial opportunity as the major factor One factor among many – FedEx Home-created obstacles to use of ent. opportunity – Multi-factor analysis – RD correct 8

Restatement of Agency In determining whether one acting for another is a servant or an independent contractor, the following matters of fact, among others, are considered: (a) the extent of control which, by the agreement, the master may exercise over the details of the work; (b) whether or not the one employed is engaged in a distinct occupation or business; (c) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision; (d) the skill required in the particular occupation; (e) whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work; (f) the length of time for which the person is employed; (g) the method of payment, whether by the time or by the job; (h) whether or not the work is a part of the regular business of the employer; (i) whether or not the parties believe they are creating the relation of master and servant; and (j) whether the principal is or is not in business. 9