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FedEx To Pay $3 Million To Settle Hiring Discrimination Charges

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FedEx has settled a Labor Department case alleging its subsidiaries FedEx Ground and FedEx Post discriminated against job seekers because of their race or gender at 23 facilities in 15 different states. | AP

WASHINGTON -- Shipping giant FedEx has agreed to pay $3 million to settle federal charges that the company had a widespread pattern of discriminating against job applicants, the Labor Department announced Thursday.

In the charges brought by the department's contract-compliance office, FedEx subsidiaries FedEx Ground and FedEx Post were accused of discriminating against job seekers because of their race or gender at 23 facilities in 15 different states. "The affected workers include men and women as well as African-American, Caucasian and Native American job seekers, as well as job seekers of Hispanic and Asian descent," the department said in a statement.

The Labor Department's contract-compliance office enforces equal employment and affirmative action laws in private businesses that have contracts with the federal government. The office conducted seven years' worth of compliance reviews in the FedEx case, and the settlement is the largest in the office's history.

In a statement, FedEx officials said they disagreed with the premise of the Labor Department's investigation and said they agreed to pay out only to avoid more costly litigation.

"The company admitted no wrongdoing and believes the DOL's position was not supported by the law," the statement read. "The allegations were based on computer statistical analysis rather than individual complaints or investigations. We agreed to pay $3 million to avoid what would have certainly been a prolonged and much more expensive resolution process."

On a call with reporters Thursday, Patricia Shiu, director of the contract-compliance office, said statistical analysis helps the department examine hiring trends. "There are a lot of different ways to prove discrimination," Shiu said. "You don’t need a sign saying 'African-Americans or Hispanics need not apply.'"

Shiu said that most of the jobs in question were part-time and paid $10 to $15 an hour for entry-level work handling packages. Under the agreement, Memphis, Tenn.-based FedEx will pay $3 million in back wages and interest to roughly 21,000 qualified minority and female job seekers who were turned down for 1,703 positions. As part of the settlement, FedEx has agreed to hire 1,703 of those 21,000 applicants as jobs open up.

"They deserved these jobs at the time of their applications; they deserve these jobs today," Labor Secretary Hilda Solis said on the call.

FedEx announced Thursday that its earnings for last year's fourth quarter had doubled over the previous year's, thanks in part to the shipments made from strong holiday shopping.

This story has been updated to include comments from Patricia Shiu's call with reporters and additional details of the settlement.

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