FedEx to pay $3 million settlement in discrimination case

Parcel service allegedly discriminated against 21,635 job applicants in 15 states

The U.S. Department of Labor’s (DOL) Office of Federal Contract Compliance Programs (OFCCP) today announced that it has struck a settlement with subsidiaries of FedEx Corp. to resolve allegations of hiring discrimination at 23 facilities across 15 states.

After reviewing compliance reviews dating back seven years, the OFCCP said it found evidence that FedEx’s hiring practices and selection procedures had violated Executive Order 11246 by discriminating on the basis of sex, race and/or national origin. Of the 21,635-person class, the OFCCP found that 61 percent were female, 52 percent were black, 14 percent were Hispanic, 2 percent Asian and 1 percent was Native American.

The OFCCP also said its reviews uncovered extensive violations of the executive order’s records-keeping requirements.

The terms of the settlement state that FedEx will pay $3 million in back wages and interest to job applicants who were rejected for entry-level package handler and parcel assistant positions at 22 FedEx Ground facilities and one FedEx SmartPost facility. The shipping giant also agreed to extend job offers to 1,703 of the affected workers when positions become available.

The OFCCP says that not only is the 21,635 workers class one of the largest classes of victims in its history, but that the $3 million conciliation agreement is the largest single financial settlement that it has negotiated since 2004.

"Being a federal contractor is a privilege and means you absolutely, positively cannot discriminate, not when you are profiting from taxpayer dollars," OFCCP Director Patricia Shiu said in a statement. "Under this agreement, FedEx will have to really examine and revamp its hiring practices across the entire company. The American people ought to have confidence that one of our nation's most trusted brands will not tolerate discrimination."

FedEx Ground has committed to reforming its hiring practices, and said that it will develop and implement equal employment opportunity training, launch self-monitoring measures to ensure compliant hiring practices and take all steps needed to meet all records-keeping requirements. FedEx Ground also agreed to employ an outside consultant to review and improve its hiring and employee and supervisor training practices.

The New York Times reported that a FedEx Ground spokesman said the DOL’s position wasn’t supported by the law, and that the company agreed to the settlement to avoid a more prolonged and costly resolution process.

“The bottom line is we admitted no wrongdoing,” the spokesman said. “The allegations and the whole drive for the settlement were based on a computer statistical analysis, rather than on any individual complaints or investigation.”

Contributing Author

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