The U.S. Department of Labor said it reached an agreement with two FedEx Corp. (FDX) units that also work as federal contractors on allegations of hiring discrimination, concluding a compliance review that spanned seven years.
To settle the charges, the shipping giant agreed to pay $3 million in back wages and interest to 21,635 applicants who were rejected for entry-level jobs at 22 FedEx Ground facilities and one FedEx SmartPost location. Additionally, FedEx agreed to extend job offerings to 1,703 of the affected applicants as positions become available.
During regularly scheduled reviews, the Labor Department's Office of Federal Contract Compliance Programs said it found FedEx's hiring and selection procedures discriminated against applicants on the basis of sex, race or national origin at 23 facilities in 15 states. The affected workers included men and women, as well as African-American, Caucasian and Native American job seekers, and also applicants of Asian and Hispanic descent.
FedEx Ground said the company admits no wrongdoing over its hiring practices in certain locations.
"The allegations were based on computer statistical analysis rather than individual complaints or investigations," FedEx Ground said in a statement. "We agreed to pay $3 million to avoid what would have certainly been a prolonged and much more expensive resolution process."
It said it will continue to review and develop its hiring practices as part of its commitment to diversity.
As part of the settlement, FedEx Ground agreed to a wide range of reforms, the Labor Department said. The company agreed to correct any discriminatory hiring practices, develop and implement equal employment opportunity training, launch self-monitoring measures and engage an outside consultant for a review.
Earlier Thursday, FedEx said its fiscal third-quarter earnings more than doubled from a year earlier, as record holiday package shipping buoyed its ground division despite sluggish volume in its big express unit.
Shares were down 4% at $92.03. The stock is up 9% over the past three months.
-By Ben Fox Rubin, Dow Jones Newswires; 212-416-3108; firstname.lastname@example.org