FedEx Corp. sued a large delivery contractor who had called for the end of Sunday service and more pay, claiming he is waging a campaign to disparage the company to promote his own business.
FedEx’s ground unit filed the suit Friday in federal court in Tennessee, alleging that the contractor, Spencer Patton, was “creating a fictionalized crisis” between the company and those it contracts with to deliver packages.
Patton, who runs more than 200 routes in 10 states for FedEx Ground, in July called for FedEx to scrap Sunday deliveries and negotiate an increase in pay by Black Friday, the start of the US holiday shopping season. Small companies that deliver packages for the ground unit have been complaining that they’re losing money because of rising costs.
FedEx several days later said it would scale back Sunday service in far-flung areas of the US. The company had accelerated the rollout of the service, which began in 2019, in response to the historic rise in home deliveries in the wake of Covid-19 lockdowns.
“It’s unclear how suing their own contractors does anything to help address the rising fuel costs, wage costs, and vehicle costs that everyone is feeling,” Patton said in a statement on Route Consultant’s website. “This lawsuit is an attempt to silence the small business owners from talking to the media about the very real threat to the delivery network.”
In its suit Friday, FedEx said Patton is attempting to get “large numbers” of independent service contractors to attempt to renegotiate their deals with the company to drive business to his Route Consultant business, which provides consulting and other services to the logistics industry.
“While the current economy is a challenge for all businesses, the reality is that FXG’s service providers earn average annual revenue of approximately $2.3 million dollars, a figure that has doubled over the last four years,” FedEx said in its suit.
“Contrary to Mr. Patton’s false or misleading claims about the number of service providers that purportedly in financial distress,” independent service providers “have sought mid-contract negotiations for only about 10% of their agreements in 2022,” the company said. “FXG has consented to approximately 40% of renegotiation requests since July 1, 2022 and over 90% of those renegotiations led to agreement on new terms that that resulted in higher contractual payments to the ISPs.”
The suit was first reported by the Wall Street Journal.
The case is FedEx Ground v. Route Consultant, 22-cv-656, US District Court, Middle District of Tennessee.
