Well, according to a recent court settlement, if you’re FedEx you blame it on al Qaeda.
In a settlement reached with the government last week, FedEx agreed to pay a whopping $8 million to “avoid continued litigation” over accusations that the company regularly faked excuses for being late on guaranteed deliveries to government agencies and facilities.
According to the Settlement Agreement, a whistleblower and former FedEx employee named Mary Garofolo alleged that:
“(I)n the aftermath of the September 11, 2001 terrorist attacks, FEDEX began us to use a ‘delivery exception code’ to denote when FEDEX was unable to meet its delivery commit times because of increased security measures that it’s couriers faced at government buildings. The exception code is known within FEDEX as a ‘DEX 5’ or ‘security delay’ code.”
ABC News reported that Garofolo “had been instructed by managers to justify late deliveries by blaming the beefed-up security measures at government buildings that came after the September 11 terror attacks.” And not just in Washington, DC. ABC News says the abuse occurred “at federal buildings around the country.”
“They used 9-11 to profit,” Garofolo told ABC News, “and they did it for years.” Indeed, according one of Garofolo’s lawyers, the abuse “continued at least until the fall of last year.”
Garofolo charged that FedEx’s misuse of the DEX 5 code, as well as DEX 8 (“customer not in”) and DEX 24 (“recipient unavailable”) was “done purposefully in order to excuse or exempt FEDEX’s own failures to make on-time deliveries to government customers.”
According to the government complaint lodged against FedEx, the company misused the DEX 5, 8 and 24 codes to avoid late delivery penalties in instances caused by traffic jams and a driver’s inability to find convenient parking.
In addition, the company also used the codes “when the government facility’s security measures did not, in fact, delay delivery” or “where the government facility had routine, regular or daily security procedures of which FEDEX was aware.”
Most egregious, however, according to the complaint, the excuse codes were sometimes used “before the FEDEX delivery vehicle left the FEDEX service station” and “prior to the FEDEX courier’s arrival” at the government facility where the security measures allegedly caused the late delivery.
Did FedEx hire Carnac the Magnificent as a driver without anyone knowing about it?!!
Now here’s the hilarious part.
Without admitting guilt or liability, FedEx agreed to pay the government $8 million; however, the agreement specifically stipulates that the payment must be made by – wait for it – ELECTRONIC FUNDS TRANSFER!
I guess the old saying about “fool me once, shame on you; fool me twice shame on me” came into play here. No sense in risking late delivery of multi-million dollar check, huh?
Unfortunately, this settlement continues a rather disturbing pattern of FedEx abusing, misusing or stretching the law for its own gain – including misclassification of the independent contractors in its Ground division and exploiting a loophole in federal labor law that allows it to classify its Express division drivers as jumbo jet pilots.
I guess $8 million sounds like a lot of money to the average person, but it’s a drop in the bucket for an international company like FedEx. On the other hand, it’s another black eye that possibly moves the company one step closer to a serious day of reckoning.