May 15, 2026|Franchise Frontlines
May 15, 2026 | United States District Courts for the Districts of Vermont and Maine | Slip Copy Opinions
Executive Summary
In two slip-copy decisions issued on the same day, Judge Mary Kay Lanthier of the United States District Court for the District of Vermont and Judge Stacey D. Neumann of the United States District Court for the District of Maine addressed related FLSA overtime claims brought by delivery drivers against FedEx Ground Package System, Inc. The plaintiffs worked for FedEx Independent Service Providers, or ISPs, and alleged that FedEx nevertheless acted as their joint employer. FedEx argued, among other things, that the Motor Carrier Act exemption barred overtime claims, that the plaintiffs could not establish the light-vehicle exception for weeks with missing or unknown vehicle-weight data, that some claims were time-barred, and that damages should be limited under FedEx’s proposed compensation methodology. The courts did not decide that FedEx was a joint employer or that the plaintiffs were entitled to overtime. But both courts allowed significant portions of the claims to proceed, emphasizing factual disputes involving vehicle-weight records, overtime proof, willfulness, damages methodology, and, in Gensoli, the degree of operational control that could support a joint-employer finding. Eppich also gave FedEx a meaningful defense ruling by rejecting equitable tolling for older FLSA claims that predated the three-year willfulness period.
Relevant Background
FedEx operates a nationwide package-delivery network and contracts with third-party businesses known as ISPs to provide pickup and delivery services between FedEx sorting stations and customers. ISP employees perform the pickup and delivery work. The FedEx ISP agreements state that ISPs have discretion over staffing, hiring, training, supervision, assignment, discipline, compensation, benefits, and other employment terms, and that ISPs must treat their personnel as their own employees.
Both cases arose from broader FedEx driver overtime litigation that began outside the transfer courts. Drivers first filed a class action in Massachusetts, and after that case was limited to Massachusetts drivers, non-Massachusetts drivers filed a separate class action in the Western District of Pennsylvania. The Pennsylvania court later severed the named plaintiffs’ claims and transferred them to the districts where the plaintiffs worked. Gensoli’s case proceeded in Vermont, and Eppich’s case proceeded in Maine.
Gerald Gensoli worked as a delivery driver in Vermont for two ISPs, 2LS4G Corp. and James J. Miner, Inc. He testified that he was paid a weekly rate that started at $620 and later increased to $700, and that he generally worked between fifty and sixty hours per week. FedEx’s records reflected that, during the relevant period, Gensoli delivered packages either in a specified vehicle or in vehicles of “unknown” weight. The record also showed that FedEx’s vehicle-weight data was incomplete because FedEx received that information from ISPs and did not have the data when ISPs did not provide it.
Frederick Eppich worked as a delivery driver in Maine for several ISPs, but he sought overtime damages only for certain periods involving RF Delivery Service, Inc. and UML Inc. FedEx’s scanner data showed that Eppich drove vehicles weighing 10,000 pounds or less on 736 days and drove vehicles of unknown or heavy weight on 682 days. Like in Gensoli, the scanner data did not itself capture vehicle weight. Instead, the vehicle number had to be cross-referenced against FedEx’s internal system, and FedEx lacked the data when ISPs did not provide vehicle-number information.
FedEx moved for summary judgment in both cases. It argued that the Motor Carrier Act exemption barred overtime claims for drivers engaged in interstate delivery work, that the plaintiffs failed to prove the light-vehicle exception for weeks involving vehicles of unknown weight, that limitations defenses narrowed or barred claims, and that damages should be calculated under a methodology more favorable to FedEx. In Gensoli, FedEx also directly challenged whether the record supported the plaintiff’s overtime and joint-employer theories. In Eppich, FedEx did not move for summary judgment on joint employment, but the court addressed the pending joint-employer dispute in connection with willfulness and the overall factual record.
Decision
The courts first addressed the Motor Carrier Act exemption and the light-vehicle exception. Both courts recognized that delivery drivers may fall within the Motor Carrier Act exemption, which can remove them from FLSA overtime protections. But both courts also addressed the Technical Corrections Act’s light-vehicle exception, under which a driver may still qualify for overtime protection if the driver’s work, in whole or in part, affects the safe operation of vehicles weighing 10,000 pounds or less.
In Gensoli, the Vermont court declined to decide which party bore the burden of proving the light-vehicle exception because the plaintiff had produced enough evidence to create a triable issue even if the burden fell on him. Gensoli testified that he drove a ten-foot U-Haul truck for part of his employment, submitted evidence that the truck had a gross vehicle weight rating under 10,000 pounds, and testified that he was 95 percent certain that his regular Chevy Silverado weighed under the threshold. FedEx argued that the testimony was unclear, but the court concluded that credibility and factual disputes could not be resolved at summary judgment.
In Eppich, the Maine court took a more direct position on the incomplete-records issue. FedEx asked for summary judgment on weeks when Eppich drove vehicles of unknown or heavy weight. The court declined to place the burden on the employee to produce vehicle-weight information generated, stored, or controlled by FedEx and its contractors. The court reasoned that, where the light-vehicle issue depends on vehicle-weight records, it would conflict with the purpose and spirit of the FLSA to bar overtime recovery based on missing or incomplete employer-side records. The court also warned that placing the burden on the employee could incentivize employers not to maintain records that would later bear on overtime eligibility.
Both courts rejected FedEx’s efforts to treat unknown vehicle-weight weeks as a basis for summary judgment. In Gensoli, FedEx’s own records contained vehicles of unknown weight, and the plaintiff provided testimony that could support the light-vehicle exception. In Eppich, the court found a genuine dispute of material fact for weeks with missing or unknown vehicle-weight data and denied FedEx’s request for summary judgment on those weeks.
The courts also addressed judicial estoppel. In both cases, FedEx argued that the plaintiffs should not be permitted to rely on unknown vehicle weights because of positions allegedly taken earlier in the broader litigation. Both courts rejected the argument. In Gensoli, the Vermont court found no showing that any prior position gave the plaintiff an unfair advantage over FedEx, and FedEx acknowledged that it suffered no ultimate prejudice. In Eppich, the Maine court found no inconsistency because the earlier position concerned whether opt-in plaintiffs could show that they drove small vehicles more than a de minimis portion of the time, while Eppich undisputedly drove small vehicles for over half of his employment.
The joint-employer analysis was most developed in Gensoli. The Vermont court applied the Second Circuit’s Zheng factors and concluded that the record contained enough evidence for a reasonable juror to find FedEx was Gensoli’s joint employer. The court found that one factor weighed against joint employment because the record did not show that Gensoli used FedEx premises or equipment. But several other factors supported a triable issue. The court noted evidence that FedEx’s ISP agreement imposed uniform delivery duties, that package delivery was integral to FedEx’s business, that ISP agreements contained materially consistent terms, that FedEx imposed detailed delivery and scanner requirements, that FedEx controlled driver qualification and disqualification standards, that FedEx required reporting of citations and accidents, that FedEx maintained certain driver records and compliance processes, and that FedEx restricted drivers from working for competitors.
The Vermont court also addressed recordkeeping. It held that if FedEx were found to be a joint employer, the FLSA would require FedEx to maintain employment records to the same extent required of any employer. The court relied on the FLSA’s text, remedial purpose, and authorities recognizing the nondelegable nature of recordkeeping duties under the Act.
The limitations rulings differed in important ways. In Gensoli, the Vermont court declined to grant summary judgment on the FLSA statute of limitations because willfulness remained a fact-intensive issue. The court found that a reasonable factfinder could conclude that FedEx knew or recklessly disregarded the possibility that drivers were not being paid required overtime, based on evidence of FedEx’s alleged ability to monitor driver hours, review scanner data, assess wage-and-hour compliance, and obtain payroll records.
In Eppich, the Maine court also found enough evidence to support an inference of willfulness for claims accruing within the three-year period. But it granted FedEx partial summary judgment for FLSA damages accruing before July 10, 2017. The court rejected Eppich’s effort to extend an earlier Western District of Pennsylvania order tolling the notice period into tolling of his individual claims. The court emphasized that equitable tolling requires an individualized showing of diligence and extraordinary circumstances. Because Eppich did not make that showing, older FLSA claims outside the three-year period could not proceed.
The courts also addressed state-law overtime claims. In Gensoli, the Vermont court denied summary judgment on the Vermont claim for the same reasons it denied summary judgment on the FLSA claim, and it applied a six-year limitations period to Vermont overtime claims. In Eppich, the Maine court likewise denied summary judgment on the Maine overtime claim because the parties did not identify a material difference between Maine and FLSA overtime protections, except that Maine’s limitations period preserved all of Eppich’s state-law overtime claims.
Finally, both courts declined to decide the proper damages methodology at summary judgment. FedEx argued that the plaintiffs’ compensation should be treated in a way that limited recovery to a half-time premium. The plaintiffs argued that their flat weekly or daily compensation covered only the first forty hours absent a contrary agreement. In Gensoli, the court adopted a rebuttable presumption that a weekly salary covers only the first forty hours unless the parties agreed otherwise, and it found no evidence of a different agreement at summary judgment. In Eppich, the court concluded that damages methodology was premature because factual disputes remained regarding FedEx’s liability, if any, and the regular rate presented a fact question.
Looking Forward
These related decisions should be read cautiously. Neither court held that FedEx was liable for overtime. Neither court held, as a final matter, that FedEx was a joint employer. Neither court decided that the Motor Carrier Act exemption failed. Both courts applied summary-judgment standards that required disputed inferences to be drawn in favor of the plaintiffs. That posture should guide how employers, franchisors, and contracting businesses evaluate the decisions.
The practical lesson is that incomplete records can undermine early dispositive motions. FedEx relied on the Motor Carrier Act exemption, but both courts focused on unknown or missing vehicle-weight information. If a company relies on vehicle weight, job duties, hours, routes, interstate-commerce facts, exemption status, or compensation methodology as a defense, it should maintain records that can prove those facts. A statutory exemption is strongest when the factual record is complete, contemporaneous, and tied to the legal standard.
The light-vehicle analysis has particular significance for contractor-based delivery systems. The courts did not treat missing vehicle-weight data as automatically fatal to the plaintiffs’ claims. In Eppich, the court expressly declined to place the burden on the employee to produce vehicle-weight information generated or maintained by the company or its contractors. That reasoning creates risk for companies that rely on third-party operators but do not maintain exemption-related records in a usable form.
The Gensoli joint-employer analysis also deserves careful attention. The court did not hold FedEx was a joint employer, but it found enough evidence to let a jury decide. The court focused on detailed operational requirements affecting delivery methods, signatures, scanning, driver qualifications, disqualification, accident reporting, preventability determinations, recordkeeping, wage-and-hour compliance assessments, and restrictions on working for competitors. For companies using contractor, ISP, vendor, or franchise-adjacent models, those kinds of controls may create litigation risk when they appear to regulate the workers rather than only the service output.
For franchisors, the analogy should remain cabined. These opinions involve FedEx’s ISP delivery model, not a franchise system. The courts did not analyze franchise agreements, franchisor brand standards, or franchisor-franchisee relationships. Still, the cases are relevant because plaintiffs may try to analogize detailed brand, safety, customer-service, technology, or operational standards to employment control. Franchisors should preserve the distinction between protecting the brand and directing a franchisee’s employees.
That distinction should appear in both documents and daily practice. Franchise agreements, operations manuals, training materials, field-support communications, and compliance programs should focus on brand standards, customer experience, trademark protection, and system quality rather than employee hiring, firing, discipline, scheduling, wage-setting, timekeeping, or supervision. Where employment-law compliance support is appropriate, franchisors should work with counsel to structure it as guidance to the franchisee, not control over the franchisee’s workforce.
The Eppich limitations ruling provides an important employer-side counterbalance. While the court allowed many issues to proceed, it rejected the plaintiff’s attempt to use earlier notice-period tolling to revive older individual FLSA claims. The court required individualized proof of diligence and extraordinary circumstances for equitable tolling. That holding may help employers resist efforts to convert collective-action procedural rulings into automatic tolling of individual damages periods.
The damages discussions also reinforce the need for clarity in compensation arrangements. Both courts declined to resolve damages methodology in FedEx’s favor at summary judgment. In Gensoli, the court adopted a presumption that weekly compensation covers only forty hours absent a different agreement. In Eppich, the court declined to decide the issue while liability and regular-rate facts remained disputed. Employers and contractor-based systems should document whether compensation is hourly, daily, weekly, salary-based, or intended to cover a specified number of hours, and they should ensure that any overtime methodology complies with applicable law.
The willfulness analysis offers another compliance lesson. Courts may treat compliance tools, scanner data, hour monitoring, audit rights, wage-and-hour assessments, and payroll-record access as relevant to what a company knew or should have known. Those tools are not inherently problematic. In fact, they may help companies improve compliance. But companies should use them in a way that creates a record of good-faith compliance efforts, follow-up, and corrective action rather than a record of unresolved wage-and-hour risk.
For employers, franchisors, and businesses using contractor-based delivery or service models, the combined message is straightforward: control and records matter. Detailed operational controls may be necessary to protect customers, safety, quality, or brand standards, but they should not unnecessarily reach employment decisions. Records supporting exemptions, hours, vehicle weights, compensation, and entity roles should be maintained before litigation begins. And when a company relies on independent operators, it should ensure that the independence reflected in the contract also appears in practice.
Gensoli and Eppich are not liability rulings. They are litigation-risk rulings. Their value lies in showing why courts may hesitate to end overtime cases early when operational-control evidence, incomplete records, and compensation ambiguities remain unresolved. For companies operating through ISPs, vendors, contractors, or franchisees, the best response is proactive: audit the model, clarify records, define roles, and separate system standards from employment control.
This article is based solely on the opinions of the Courts in these matters. The author has not conducted any independent investigation into the facts. For the avoidance of doubt, each statement related to the law and facts in this article is drawn from the Courts’ opinions in these cases.
Thomas O’Connell is a Partner at Buchalter LLP and Chair of the firm’s Franchise Practice Group. For questions about this article or media inquiries, you can contact Tom at toconnell@buchalter.com.
This communication is not intended to create, and does not create, an attorney-client relationship or any other legal relationship. No statement herein constitutes legal advice, nor should it be relied upon or interpreted as such. This communication is for general informational purposes only and is not a substitute for legal counsel. Readers should not act or refrain from acting based on any information provided without seeking appropriate legal advice specific to their situation. For more information, visit www.buchalter.com.
