Labor & Employment Law Daily Wrap Up, WAGE-HOUR—OVERTIME—D. Vt.: FedEx faces continued overtime litigation in Vermont, (May 18, 2026)

By George Basharis, J.D.

Disputes over vehicle weight, overtime pay practices, and joint employment status kept a delivery driver’s wage claims alive against FedEx.

A delivery driver presented enough evidence for a jury to find that FedEx Ground Package System, Inc., may have improperly denied overtime pay by misclassifying him as exempt despite workweeks routinely exceeding 40 hours, prompting a federal court in Vermont to deny summary judgment on federal and state-law wage claims. The court concluded that factual disputes remained over the weight of vehicles the driver operated, whether FedEx jointly employed him through intermediary service providers, and whether his flat weekly pay was intended to compensate only the first 40 hours worked (Gensoli v. FedEx Ground Package System, Inc., No. 2:25-cv-00829 (D. Vt. May 15, 2026)).

Exemption defense. The driver worked in Vermont between April 2017 and April 2018 for two independent service providers that contracted with FedEx to deliver packages. FedEx uses businesses referred to as Independent Service Providers, or ISPs, whose employees pick up and deliver packages under agreements requiring the ISPs to treat drivers as their own employees. According to the driver, he generally worked between 50 and 60 hours per week and received a flat weekly rate that eventually increased from $620 to $700. He later brought federal and state wage claims alleging that he was improperly denied overtime compensation.

FedEx sought summary judgment on all claims, arguing primarily that the driver fell within the Motor Carrier Act exemption to the FLSA because he operated vehicles involved in interstate commerce. FedEx maintained that its records showed the driver either operated vehicles exceeding 10,000 pounds or vehicles whose weight could not be determined from the available data. The company also argued that the driver lacked evidence of unpaid overtime, could not establish willfulness sufficient to extend the statute of limitations, and was not entitled to overtime under Vermont law. The court rejected those arguments at the summary judgment stage, finding the record contained sufficient evidence for a reasonable jury to rule in the driver’s favor on multiple issues.

Vehicle weight. A central issue involved the so-called “light vehicle exception” to the Motor Carrier Act exemption. Although drivers engaged in interstate commerce ordinarily fall outside the FLSA’s overtime protections, employees who spend all or part of their time operating vehicles weighing 10,000 pounds or less may still qualify for overtime compensation.

FedEx argued that the driver could not rely on the exception because company records showed he drove either heavy vehicles or vehicles of unknown weight. According to the driver, however, he drove a 10-foot U-Haul truck and a Chevrolet Silverado that he believed weighed less than 10,000 pounds. He further stated that the Silverado he regularly used had a gross vehicle weight rating below the statutory threshold.

The court determined that the driver’s assertions, combined with gaps in FedEx’s records, created a factual dispute unsuitable for summary judgment. The court noted that FedEx received vehicle information from the ISPs and that records for some delivery vehicles identified only “unknown” weight classifications. The court also declined to disregard the driver’s assertions as contradictory or speculative, concluding that credibility determinations belonged to the jury rather than the court resolving summary judgment.

FedEx also contended that the driver should be judicially estopped from arguing that unidentified vehicles weighed less than 10,000 pounds because other drivers in related litigation allegedly took the opposite position. The court rejected that argument, finding no showing that FedEx suffered prejudice from any prior position and noting that FedEx itself acknowledged during the proceedings that there was “no ultimate prejudice” to the company.

Willfulness and limitations period. The court also refused to dismiss the federal overtime claim as untimely. FLSA claims generally carry a two-year statute of limitations, but the limitations period extends to three years for willful violations. FedEx argued that the extended limitations period did not apply because there was no evidence the company knowingly or recklessly violated overtime laws. The court concluded otherwise, finding sufficient evidence from which a reasonable factfinder could determine that FedEx knew or recklessly disregarded the possibility that drivers were working overtime without appropriate compensation.

According to the court, the record included evidence FedEx possessed the ability to monitor driver hours, review scanner data, assess compliance with federal and state employment laws, and obtain payroll information related to driver compensation practices. The court found a factfinder could conclude FedEx knew drivers worked more than 40 hours per week, had the ability to determine whether overtime was being paid, yet failed to ensure compliance.

Joint employment. Another issue involved whether FedEx could be treated as a joint employer alongside the ISPs that formally hired the driver. FedEx argued it was not responsible for maintaining payroll records because it was not the driver’s employer. The court rejected that argument for purposes of summary judgment, concluding that the FLSA’s broad definition of “employer” could encompass FedEx under the facts presented.

The court identified several factors supporting the driver’s position. FedEx imposed standardized job duties on ISP drivers, including package-scanning requirements, delivery procedures, pickup obligations, and vehicle-inspection rules. FedEx also required compliance with detailed operational policies governing customer interactions, delivery timing, scanning procedures, and driver conduct.

The court further noted that FedEx retained authority to impose hiring requirements, conduct background investigations, review driving histories, and disqualify drivers who failed to satisfy company standards. FedEx also maintained authority to suspend drivers, investigate accidents, and require ISPs to submit payroll and tax information concerning drivers. Consequently, a reasonable jury could conclude that FedEx exercised substantial control over drivers’ work and employment conditions.

Flat-rate compensation. The court also addressed whether the driver’s flat weekly pay included overtime compensation. FedEx argued that even if the driver worked overtime hours, his weekly salary compensated him for all hours worked, including overtime. Courts have adopted differing approaches to that issue but ultimately concluded that a rebuttable presumption applies under which a fixed weekly salary ordinarily covers only the first 40 hours worked unless the parties clearly agreed otherwise.

The court emphasized that allowing employers to rely on ambiguous pay arrangements to satisfy overtime obligations could undermine the FLSA’s protections for workers who regularly exceed 40-hour workweeks. Moreover, FedEx failed to present evidence conclusively establishing an agreement that the weekly salary compensated all hours worked, including overtime hours.

The driver stated that he routinely worked long days beginning early in the morning and often exceeding 10 hours. According to the driver, he arrived at terminals as early as 6:00 a.m., sometimes returned home after 9:30 p.m., skipped meal breaks, and generally worked between 50 and 60 hours each week. He also stated that his weekly pay remained the same regardless of whether he worked five or six days per week or how many hours he worked. The court concluded that the driver’s account of his work schedule and compensation created a triable dispute regarding overtime compensation.

Vermont law claims. FedEx separately argued that the Vermont overtime claim failed because state overtime protections do not apply to employees exempt under the Motor Carrier Act. The court acknowledged that the parties appeared to agree the state-law claim would fail if the federal Motor Carrier Act exemption applied. But because disputed factual issues prevented summary judgment on the FLSA claim, the same disputes also precluded summary judgment under Vermont law.

Additionally, the court rejected FedEx’s argument that the Vermont claim was untimely. FedEx initially argued the claim was subject to a two-year limitations period but later acknowledged that Vermont law imposes a six-year limitations period for unpaid overtime claims. Therefore, the court determined that the state-law claim was timely filed.

Damages methodology reserved. FedEx also asked the court to resolve the proper method for calculating any overtime damages before trial. The company argued that overtime should be calculated using a fluctuating-workweek approach that would divide weekly compensation by total hours worked to determine a regular hourly rate, resulting in only an additional half-time premium for overtime hours.

The court declined to decide that issue on summary judgment because the appropriate calculation depended on unresolved factual questions concerning the parties’ compensation agreement. The court noted that FedEx had not introduced evidence conclusively establishing an agreement that the weekly salary compensated all hours worked, including overtime. As a result, the proper damages methodology remains an issue for trial.

The case is No. 2:25-cv-829.

Judge: Lanthier, M.

Attorneys: Bradley S. Manewith (Lichten & Liss-Riordan) for Gerald Gensoli. David J. Kiefer, Federal Express Corporation, and Jessica G. Scott (Wheeler Trigg O'Donnell) for FedEx Ground Package System, Inc.

Companies: FedEx Ground Package System, Inc.

Cases: WageHour Overtime EmployeeStatus Exemptions RemediesDamages StateLawClaims Procedure VermontNews