FedEx Ground announced Wednesday it will pay $3 million to settle a Labor
Department dispute over hiring practices in 25 markets around the country.
The ground parcel delivery unit of Memphis-based FedEx Corp. said it admitted no wrongdoing but agreed to a settlement "to put these matters behind us."
The allegations involved part-time package handlers and spanned several years dating to 2004.
They were based on "computer statistical analysis rather than on individual complaints or investigations," such as Equal Employment Opportunity, FedEx Ground spokesman Patrick Fitzgerald said.
"FedEx Ground has signed an agreement with the U.S. Department of Labor settling a multi-year disagreement over hiring practices in certain locations in an effort to put these matters behind us," he said.
"While we admitted no wrongdoing and believe the DOL's position was not supported by the law, we agreed to pay $3 million to avoid what would have been certainly a prolonged and much more expensive resolution process. We have and will continue to review and enhance our hiring practices to promote FedEx Ground's commitment to diversity and equal employment opportunity."
The FedEx announcement appeared timed to come out ahead of a company earnings release Thursday morning and a scheduled press call later Thursday by Secretary of Labor Hilda A. Solis and Patricia A. Shiu, director of the department's Office of Federal Contract Compliance Programs.
The department notified media Wednesday it would announce settlement of "a significant case involving systemic hiring discrimination."
A Labor Department spokesman didn't respond to an e-mail from The Commercial Appeal asking for confirmation that the case involved FedEx Ground.
But according to a story posted late Wednesday by the New York Times, the company agreed to make "wide-ranging changes to correct any discriminatory hiring practices." It also agreed to extend job offers to 1,703 people who the Labor Department said were rejected for jobs as part-time package handlers.
The Times, briefed in advance by the Obama administration on the agreement, quoted Labor Secretary Hilda L. Solis saying, in a statement: "When you do business with the government, we expect you to do the right thing. That includes giving all Americans an equal shot at a good job. It's about more than just the law -- diversity is smart for business."
FedEx Corp. told The Commercial Appeal that more than 40 percent of its total FedEx U.S. workforce and 27 percent of its management team are minorities.
The company has received numerous honors for its diversity, including Champion of Diversity Award from the New York Urban League, Black Enterprise magazine's top 40 companies for diversity and Minority Engineer magazine's top 50 employers.
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