$55 million settlement in FedEx race discrimination class action


In my view, this FedEx class action settlement is yet another sign that after years of near-dormancy, employment discrimination claims not based on disability, harassment, or termination of employment (e.g., those based on hiring and promotions) have become the biggest area of corporate employment law risk.

The ascendancy of these employment discrimination claims is led by very high-powered, fabulously wealthy class-action attorneys. Where [they] lead, I will follow. (Well, I won’t file these suits, but expect to be defending some as they become more common.)

Here’s today’s scoop:

Attorneys in a major race discrimination class action have reached a settlement that would force . . . FedEx Corp. to pay out almost $55 million and overhaul its pay, discipline and promotions practices.

The suit claimed that FedEx Express . . . harbored a culture of hostility toward people of color, allowing racial bias to infect its human resources decisions.

A FedEx spokeswoman said:

We voluntarily entered into the consent decree because we believe that this action demonstrates our deep commitment to diversity and equal employment opportunities. [In the consent decree, FedEx Express denies discrimination.]

Included is $15 million for attorney fees and costs, unspecified claims administration costs, and up to $360,000 for class representatives and people who gave declarations.

But [an attorney for the employees] was more eager to talk Tuesday about the part of the settlement that will promote equal employment opportunities for FedEx’s black and Latino employees.

“The money is nice, and people deserve to be compensated if they’ve been discriminated against. But the injunctive relief will go on for a long time and benefit people for years to come,” he said.

As part of the deal, FedEx agreed to stop using its “Basic Skills Test” as a prerequisite for promoting employees to higher-paid, more desirable positions.

[The attorney for the employees] said he could show that only 47 percent of blacks and 62 percent of Latinos pass the Basic Skills Test, as compared with 86 percent of white employees.

“So that test is a hurdle, and it’s keeping blacks and Latinos from getting these jobs,” he said.

Finberg said the class counsel brought in a UC-Berkeley psychology professor who determined that the Basic Skills Test is not a valid measure of success on the job and that FedEx could come up with another such test to take its place.

Under the proposed settlement, FedEx has also agreed to make its performance evaluation process less discretionary, while submitting policy changes to show that its revised practices do not continue to foster racial discrimination.

Source:

Law.com – FedEx, Workers Reach $55 Million Deal on Racial Claims

You don’t need a weatherman to know which way the wind blows

The gathering perfect storm of employment discrimination class action litigation gains strength from several factors:

Growing use of the disparate impact method of proving discrimination.

  1. Increased pursuit of hiring, compensation, and promotion employment discrimination claims challenging “systemic” discrimination, which lend themselves to disparate impact analysis and class actions.
  2. The involvement in the employment discrimination sphere of seasoned class action lawyers with the ability to bankroll big lawsuits using gains from prior settlements.
  3. The relative ease with which major corporations agree to multi-million-dollar employment discrimination settlements that include enormous sums allocated to attorneys’ fees (wonder what the $15 million comes to per hour?) I know the lawyers on both sides would laugh at my calling it “easy”; but the fact remains that I haven’t heard of a single such case going to trial (Wal-Mart may yet become the exception that proves the rule).
  4. The willingness of judges to endorse such settlements (why not, if nobody’s objecting to the fee award?).
  5. The failure of employment discrimination class members to object to the disproportionate amounts paid for fees.

How to save money and ward off the employment discrimination class-action lawyers

The preventive law approach for managing the substantial risk of such actions can be described simply, although its execution can be difficult and expensive in its own right.

Just beat these lawyers to the punch: closely monitor your employment practices and whether they have a significant disparate impact.

If so, look for alternatives without such an impact and/or assess your evidence of the business necessity for those practices that have a significant disparate impact.

If you are a government contractor or subcontractor (that is an awful lot of companies), much of this is part of the OFCCP compliance process.

See also:

6 Comments

  1. annmarie

    who was the attorney because I have a case of discrination
    towards a disability the americans with disability ADA
    and the title v11 civil rights act of 1964 .

    please email lawyers info so I can call him for my case .

    Annmarie
    ann109@optonline.net

  2. Juventino Garcia "Joe"

    Im a spanish single male that lives in Beckley, WV. I’ve recently have applied for an position with Fed Ex Ground and Fed EX Ground Home Delivery. I applied online with Fed Ex Ground and a week later they called me and told me to come in and fill out some more info on their computers and they would quote” get me in as soon as possible” as in like I was an good canidate for hire! I went in the local Fed Ex Ground office and fill out all the info needed for the position and the managers were very nice and were very positive on hiring me! An ex girlfriend heard I applied their, she is an package handler there for 2 years and she called me when she heard I had an interview there and she said she talked to the managers and told them she would quite if I was hired! Also she said that the managers didnt knew who I was because I apllied under my spanish name Juventino and they knew me as Joe when I was dating my ex! She said to her, not to worry, we wont hire him then!
    So, I was golden and was about to have a job until they found out I used to date an employee there! So i applied at Home Delivery which is in the same building and in saying I had two interviews, past a background scan, drug screen,driving test, and orientation and had my ID picture taken and got uniforms and after all that they found out also I dated an employee who is working for Ground on the other side of the building and based on my conversation with the Home Delivery manager, she mentioned their could be drama issues between me and my ex! I am even in their system with a file and they wont call me for work! Now does that sound like RETALIATION DISCRIMINATION,OR Refusal of Hire on unjustified negative refrences? I have not yet contacted my local EEOC or FEPA offices. What do you think I should do?

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