FedEx Sued Delivery Company For Using A ‘Fictionalized Crisis’ To Make Money
FedEx Sued Delivery Company For Using A ‘Fictionalized Crisis’ To Make Money: FedEx Ground has sued one its largest contractors saying that the individual is posting false information online to try and boost their business fortunes.
FedEx Corp accused Spencer Patton of “fictionalizing” the crisis between FedEx Ground and its contractors by trying to drive their business to his companies in order to make more money. The suit alleges that Patton has exaggerated financial hardships facing these contractors, so they will use his business to renegotiate their contracts with FedEx Ground in the future.
Patton has pushed a dire view on the FedEx Ground situation out to hide his consulting, brokerage and other services at Route Consultant. He has warned that up to 35% of the contracts are in some level of financial distress due to rapidly escalating operating costs and a slowdown in e-commerce delivery volumes. FedEx pays local delivery drivers a per-stop fee and line-haul drivers a per-mile fee.
FedEx Ground has filed a lawsuit against Route Consultant because Patton allegedly made false claims of negligence and mismanagement that have damaged the company’s reputation with customers. The suit seeks unspecified monetary damages, money generated through Patton’s negligence, and an injunction that prohibits Patton from making future allegations on behalf of his company.
Patton argues that the lawsuit aims to bypass the issue of many contractors having a hard time making ends meet due to inflation, high gas prices and a driver shortage.
With a statement, Patton said that he knew “that a lawsuit was the most likely weapon FedEx would use against me.” Patton explained that he wasn’t afraid of legal action, and was confident in his lawyer’s plan.
Patton views the concerns about his business arrangements as a sideshow, which are diverting attention from the fact that about one-third of 6,000 member contractors are in financial peril. Patton emphasized that Route Consultant’s success remains dependant on the success of FedEx Ground, and he scoffs at the idea that his goal is to create a crisis. He said it would be ludicrous for him to deliberately cause a crisis with the intent of damaging others during a time when all of their businesses might go down in value.
Patton’s company structure is a hot-button issue that the lawsuit brings to the forefront. Patton founded Route Consultant after starting up a contractor. The company provides a broad range of services and offers contract support for drivers.
With a long leadership history of eleven years and a niche training program, Patton is able to manage cost-effective resources for FedEx Ground contractors and train at the same time. Patton also has a portfolio of rental property located in Nashville, Tennessee.
FedEx is being sued by Jay in a press conference over their unfair treatment and lack of support of contractors. The suing came just after 3,500 contractors met with him at the “Black Friday” Expo in Las Vegas. In his keynote last Saturday, he said FedEx has little understanding or respect for the day-to-day operations of what it means to be a contractor.
John Smith, CEO of FedEx Ground, refused to speak with Patton, the co-founder of Copymatic. Patton responded by stating that he is not looking to place a deadline on when FedEx Ground needs to take action. He has previously stated that “we need to have a timeline” in order for this contractor group to provide reliable services during peak season.
Patrick Patton is a logistics professional who wants to form the Trade Association of Logistics Professionals, which will be open to all contractors who work for transport and logistics companies. Within this group is expected to be a 10-person committee that will represent FedEx Ground contractors. The parent company has said it will only negotiate contractual changes on an individual basis and not through any form of third-party bargaining unit. The contingent had been anti-union for 50 years in business before Patrick Patton’s ultimatum was made.
FedEx Ground sent Patton a cease-and-desist letter on July 26 and demanded that he stop all advocacy, disparaging the company’s brand, or plans to form a committee that would negotiate for other employees. Paperwork showed Patton did not act accordingly, writing off the letter as mere “punishment.”
The status of the network has been acknowledged and as a result, the company has taken measures to alleviate some of the pressure. One example is suspending Sunday deliveries on 15-20% of the national network. Patton insists that Sunday service is expensive and slows down the fluidity of all parcels.
The lawsuit claims that 10% of contracts have been re-negotiated since the start of the year. Between July 1 and when Patton sent his first round of renegotiation requests, FedEx Ground agreed to 40% of those renegotiations, with nearly 90% resulting in higher payments.
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