PYNQ alleged that FedEx violates laws governing contractors by exercising the same level of control over those service providers as it would over employees.

Using contractors enables Ground to shift employee and other expenses to those service providers. It also helps FedEx control labor costs by thwarting union organizing efforts, which are more complex at many small companies than at one large company.

PYNQ, owned by former airline pilot Tara Wright, in 2021 spent $1.13 million to buy two FedEx Ground delivery areas with routes serving northern California’s McKinleyville and Crescent City. FedEx sent termination letters on both service areas in May and sold one of them without her consent and without compensation. There was not time to sell the second area, leading to a loss, PYNQ’s attorney Possinger said.