FedEx pivots in holiday shipping charges — except in some instances
FedEx is giving its customers an early holiday gift — while taking a stab at its rival UPS.
The delivery service announced that it will forego additional surcharges on deliveries this holiday season — unless packages require additional handling, are oversized or unauthorized. FedEx made the decision based on the growing volume of large packages moving through the FedEx Ground network during the holidays.
Specifically, this volume increased by approximately 240% over the past 10 years. It also comprises approximately 10% of all volume handled by FedEx Ground.
FedEx is taking steps to manage the volume including adding sortation and delivery capabilities that accommodate the continued rise in demand for larger, heavier packages. This also includes temporarily dedicating entire facilities to oversized packages.
The holiday season surcharge will launch Nov. 20, and run through Dec. 24. FedEx Express and FedEx Ground in the U.S. and Canada will increase handling by $3 per package. Oversized goods are subject to an additional $25 per package, and unauthorized shipments will be $300 per package.
“Packages that are oversized, unauthorized or require additional handling consume an inordinate amount of cubic space in FedEx Ground and FedEx Express equipment in the U.S. and Canada,” said Patrick Fitzgerald, senior VP, integrated marketing and communications, FedEx.
One way to accommodate these packages is to adopt a new standard for delivery trailers.
“An important solution to this issue is for Congress to adopt a nationwide standard of twin trailers at 33 ft. versus 28 ft.,” according to Fitzgerald.
“This would increase package capacity per trip, increase safety on the highways and use less fuel,” he added. “Thirty-three ft. twin trailers are currently permitted in only 20 states, and FedEx advocates for a nationwide standard of twin trailers at 33 ft., but no increase in total weight.”
FedEx’s decision to only tax these three package categories also takes a clear swing at rival UPS. The delivery company announced in June that for the first time, it will add a surcharge for orders delivered to homes during peak holiday times.
During the 2016 holiday season, UPS' average daily volume exceeded 30 million packages on more than half of the available shipping days. In contrast, on an average non-peak day, the company ships more than 19 million packages. UPS said it hired about 95,000 seasonal employees during the peak shipping period.
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Can Retailers Keep Employees’ Contact Information Private?
Retailers sued in class or representative actions for alleged wage-and-hour violations often object to discovery requests that seek the contact information (names, addresses, etc.) of their employees — the rationale being that such information is private and burdensome to collect and should not be disclosed unless there is reason to believe that the alleged unlawful practices occurred in locations other than just the named plaintiff’s store.
Unfortunately, the California Supreme Court held in Williams v. Superior Court (Marshalls of CA, LLC), S227228 (July 13, 2017) that there is nothing unique about claims filed under the California Private Attorneys General Act of 2004 (“PAGA”), that would justify restricting the disclosure of contact information to the locations at which a named plaintiff work(ed). PAGA allows employees to bring representative actions against employers on behalf of themselves and other “aggrieved employees” for alleged Labor Code violations.
In so holding, the Supreme Court reversed a decision of the California Court of Appeal that would have precluded PAGA plaintiffs from obtaining the contact information of other potentially aggrieved employees beyond the discrete location at which they work(ed) without first making a threshold evidentiary showing that (a) they were aggrieved employees and (b) they had knowledge of systemic statewide Labor Code violations.
Rather, to justify the disclosure of contact information, the Supreme Court found that it is sufficient for a named plaintiff to allege that the at-issue violations occurred, that plaintiff himself or herself was aggrieved, and that the defendant employer had a systemic, statewide policy that caused injury to other employees across California.
While the decision deprives employers of the ability to limit the scope of discovery to some extent, the holding of Williams is actually quite narrow and should not be read as a carte blanche invitation to propound unlimited statewide discovery without any preliminary showing of good cause; the Supreme Court emphasized that its decision was limited to the particular facts before it — i.e., disclosure of contact information of similarly situated (allegedly aggrieved) nonexempt employees throughout the State of California.
Michael Williams was a retail worker for Marshalls of CA, LLC. In 2013, Williams sued Marshalls under PAGA, alleging that Marshalls failed to provide Williams and other similarly situated (i.e., aggrieved) employees meal and rest periods.
At an early stage of discovery, Williams sought the contact information of all nonexempt California employees who worked at Marshalls during the alleged statutory period. Marshalls responded that there were 16,500 potentially aggrieved employees but refused to provide their contact information on the ground that the request was (a) overbroad, (b) unduly burdensome, and (c) invaded its employees’ privacy rights.
The trial court ordered Marshalls to provide the contact information for employees at the store where Williams worked but denied statewide disclosure. The trial court stated that Williams could renew his motion seeking contact information after being deposed for at least six hours and establishing some evidentiary basis for his statewide allegations. The Court of Appeal affirmed the ruling.
Reversal by the Supreme Court
The California Supreme Court reversed the Court of Appeal’s decision, holding that a showing of good cause is not required prior to statewide disclosure of employee contact information. The Court reasoned that the scope of discovery is broad in California and that the disclosure of the names and addresses of potential witnesses is a routine and essential part of pretrial discovery. That the action was a PAGA action and not a putative class action did not change the outcome. According to the Court, in PAGA cases and in the class action context, state policy favors access to contact information for employees the plaintiff purports to represent.
Separately, the Supreme Court found that privacy objections typically will not merit altogether withholding contact information. In reaching this conclusion, the Court expressly endorsed the reasoning of Belaire-West Landscape, Inc. v. Superior Court, 149 Cal. App. 4th 554 (2007), noting that, in general, any concerns about keeping contact information private are adequately addressed through the issuance of a “Belaire-West” notice. The notice informs employees of the claims and gives them an opportunity to opt out from disclosure of their contact information.
Despite the Court’s holding, Williams is not as bad for employers as it looks. While the decision prevents employers from categorically limiting disclosure of employees’ contact information to the location where the plaintiff worked, it does not eliminate other discovery tools used to limit and narrow discovery. Specifically, the Court noted that Marshalls could have delayed or modified the scope of discovery by producing evidence that the production of contact information on a statewide basis would be burdensome or by seeking a court order sequencing discovery.
Williams makes it significantly more difficult for employers to avoid disclosing contact information for all potentially aggrieved employees/putative class members in representative PAGA/wage-and-hour class actions. Absent unusual circumstances, retailers should be prepared to turn over contact information.
However, Williams should not be viewed to allow unlimited discovery on a statewide basis. Employers continue to have an array of tools to oppose overbroad requests and to manage the timing and scope of pre-certification discovery and should continue to push back with respect to any overbroad discovery requests that seek statewide information prematurely.
Cheryl D. Orr is elected managing partner of Drinker Biddle & Reath LLP and chair of the firm’s national Labor and Employment Practice Group. Jaime D. Walter is senior attorney, and Ramon A. Miyar and Irene M. Rizzi are associates at the firm.
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