Cummings v. FedEx Ground Package System, Inc.

Gary Cummings, James Bittle, and Sean Steiner (collectively, the drivers) (plaintiffs) separately entered virtually identical contracts with FedEx Ground Package System, Inc. (FedEx) (defendant) to serve as delivery contractors. Prior to entering the agreements, FedEx allegedly made certain oral representations to the drivers regarding the amount of money they would make and assistance they would receive when it came time to sell their routes and trucks. Based on these representations, the drivers agreed to enter operating agreements with FedEx, purchased FedEx trucks, and worked delivery routes. The drivers eventually resigned. According to the drivers, they were unable to make the amount of money they had been told they would be able to make and received no assistance in selling their trucks and routes. The drivers sued FedEx in state court alleging various claims, including breach of implied contract (fourth claim) and breach of the implied covenant of good faith and fair dealing (fifth claim). The fourth and fifth claims related to FedEx’s duty and failure to help the drivers in the way that FedEx had orally or impliedly represented it would. FedEx removed the case to federal district court and filed a motion to compel arbitration of the fourth and fifth claims based on the operating agreements’ arbitration clause entitled “Arbitration of Asserted Wrongful Termination.” The arbitration clause required arbitration in the event that FedEx “act[ed] to terminate” the agreement, including claimed acts of constructive termination. The district court denied FedEx’s motion to compel arbitration, finding that the arbitration clause was narrow and did not cover the alleged claims. FedEx appealed.