By Lisa Baertlein
LOS ANGELES (Reuters) – FedEx Corp on Friday asked a federal judge in Tennessee to stop one of its largest delivery contractors from “spreading misinformation about our business to unlawfully promote its own business for financial gain.”
The lawsuit seeks injunctive relief and monetary damages from a “coordinated and multi-faceted campaign orchestrated” by Spencer Patton, who has 225 FedEx Ground routes in 10 states as well as businesses that offer services to the roughly 6,000 U.S. contractors that transport and deliver packages for that unit.
Patton says up to 35% of its delivery providers are at risk of financial failure and is urging the company to better compensate them. He has taken the unusual step of going public with the challenges at FedEx Ground, and has been rallying other contractors to his cause.
FedEx alleged that Patton is “disparaging” its Ground business “through a series of false and misleading statements” about its commercial activities.
FedEx says the escalating conflict is harming its business and forcing it to spend money on damage control. Patton said he would not back down.
“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,” Patton said in a statement. “I will continue to advocate” on their behalf, he said.
Unfavorable news coverage stemming from Patton’s campaign could harm Ground’s reputation with the shippers that pay it to deliver packages and to erode goodwill within the contractor network, FedEx alleged in its complaint in the U.S. District Court for the Middle District of Tennessee.
FedEx alleged that Patton’s actions are a “promotional campaign” for Route Consultant, his company that offers consultancy, brokerage, and other services to delivery contractors.
Patton is seeking to position Route Consultant as the “industry leader” in providing consultancy and other services to contractors, representing them individually or in collective negotiations with FedEx Ground, FedEx alleged.
And, the company said, Patton has obliquely encouraged actions that could disrupt its crucial Christmas delivery business.
At a conference hosted by his business last weekend, Patton said that if terms of his contract were not adjusted, he would shutter his FedEx Ground contracting business on Nov. 25, the start of the holiday shipping season.
Although Patton “claimed to be speaking ‘only on behalf of (his) individual businesses,’ he was plainly attempting to influence a group walk-out or boycott,” FedEx said in the lawsuit.
(Reporting by Lisa Baertlein in Los Angeles; Editing by David Gregorio)