Package delivery company FedEx said it agreed to settle a racial discrimination lawsuit against its express unit, FedEx Express, for $53.5 million.
The suit alleged that FedEx Express discriminated against its African-American and Hispanic workers by passing them over for promotion, paying them less than white workers and treating them unfairly in evaluation and disciplinary proceedings.
Memphis-based FedEx has denied committing any acts of racial discrimination. "There has been no finding of wrongdoing on the part of FedEx," said FedEx spokeswoman Sandra Munoz.
The $53.5 million cost of the settlement will be covered by insurance, Munoz said.
FedEx said it entered into the settlement, which is subject to approval by the U.S. District Court for the Northern District of California, voluntarily.
The suit was filed in 2003.
James Finberg, a partner at San Francisco-based law firm Altshuler Berzon, which was handling the class-action lawsuit against FedEx, described the agreement as a "win-win situation for both sides."
"This is good for Latinos and African Americans at FedEx as it will provide them with more opportunities and fairer compensation," Finberg said. "It will be good for FedEx as the company will have qualified Latinos and African Americans in higher positions."
He added that the settlement had been mediated by a third party and said he was "quite confident" it would be approved by the court.
The settlement would affect about 20,000 Hispanics and African-Americans who work or have worked for FedEx in the company's western U.S. region, which includes the states of California, Washington, Utah and Hawaii, since October 1999.
"We think this agreement helps to reinforce our commitment to equal employment opportunities," Munoz said.
FedEx decided to settle to avoid a lengthy and costly litigation and appeals process, she added.
As part of the settlement, the company will tighten up and improve its human resources operations, Munoz said. "Even if the court does not approve the settlement, we will go ahead with this process," she added.
If the court did approve the settlement this Friday, it would send details to the class suit members seeking their consent, a process Altshuler Berzon's Finberg said could be completed by August.