Did FedEx Really Overcharge Its Business Customers?

A series of emails authored by Alan Elam, a sales executive in Scottsdale, Arizona, and Chris Suhoza, the company’s vice-president for solutions, point to a culture at FedEx (NYSE:FDX) of systematically overcharging business and government customers for many years.

Why is FedEx Being Sued?

A complaint filed in Tennessee in 2011 by Manjunath Gokare, an immigration attorney, and the California-based legal firm Goldstein Demchak Baller Borgen & Dardarian accused FedEx of charging residential rates for sending time-sensitive documents to business offices. The filing claimed that the company levied a $3 per package fee on approximately 500,000 occasions.

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The Elam emails were included with the 11 documents that were unsealed on Monday by the judge handling the case, according to Bloomberg.

In August 2011, Elam wrote to his superior questioning the company’s practice of charging residential rates to business customers. “We are systematically overcharging our customers for residential delivery fees,” he wrote in an email seen by the Financial Times. “I have brought this to the attention of multiple people over the past five years and am confident that many MDs and VPs are aware of the issue. To date, no one has taken it up and recognized it to be a problem.”