FedEx will pay $3 million to more than 21,000 rejected job applicants to settle allegations of hiring discrimination, the Labor Department said Thursday.
The settlement caps a review of FedEx hiring practices by the Office of Federal Contract Compliance Programs. It is the largest OFCCP settlement since 2004.
“Under this agreement, FedEx will have to really examine and revamp its hiring practices across the entire company,” said OFCCP Director Patricia A. Shiu.
In its review, the OFCCP said it found evidence of discriminatory hiring practices at 22 FedEx Ground and one FedEx SmartPost site from 2004 through 2011.
Those facilities, from California to New York, discriminated against a wide variety of applicants based on gender, race and national origin, according to the OFCCP.
FedEx Ground, based in Pittsburgh, has more than 75,000 “team members,” including driver contractors, and handles more than 3.5 million packages a day.
The package delivery unit, which has 33 ground hubs, had $8.5 billion in annual sales in FedEx’s 2011 fiscal year, including revenue from FedEx SmartPost.
The OFFCP agreement was announced as FedEx reported a $521 million corporate net profit on $10.6 billion in revenue for the quarter that ended Feb. 29.
FedEx Ground increased package volume 5 percent in that quarter, pushing revenue up 14 percent to $2.48 billion and reporting operating income of $465 million.
Under the OCFFP agreement, FedEx Ground will pay $3 million in back wages and interest to 21,635 applicants who were rejected for entry-level package jobs.
FedEx also has agreed to offer 1,703 of the affected workers jobs as positions become available and committed to wide-ranging hiring reforms, the OFFCP said.
The company promised to correct any discriminatory practices, implement equal employment opportunity training, and launch self-monitoring measures.
FedEx Ground also agreed to engage an outside consultant to perform an extensive review of the company’s hiring practices, the Labor Department agency said.