Monday, April 16, 2007

Updated: FedEx settlement

Please note: This is an updated post that corrects an inaccurate fact I had posted, namely that the test in question was PSI's Basic Skills Test. This was not true. I relied on information from another blog, which turns out to have been incorrect. I sincerely apologize about the error on my part. No harm was intended.

FedEx Corp. has agreed to settle a class action employment discrimination claim (Satchell v. FedEx Express) for $54.8 million filed on behalf of black and Hispanic workers who claimed systematic discrimination in performance evaluations, promotion, compensation, and discipline throughout the Western Region. This is one of the larger settlements for this type of claim (the grand prize of $508 million goes to Hartman v. Powell)

The part of the suit involving a test claimed that it resulted in disparate impact against class members and FedEx failed to show they had the validation evidence to back it up. The settlement requires that FedEx discontinue the use of the test for courier, ramp transport driver, and customer service positions. The suit claimed that 86% of white employees had passed the test, compared to 47% of black employees and 62% of Latino employees, a clear violation of the "4/5ths rule."

Unfortunately at this point we don't have any details about the validation efforts (or lack thereof) that FedEx Express took to ensure that the test was being used appropriately. What this case does emphasize is the need for organizations to make sure they can stand behind their selection practices--particularly ones that result in adverse impact.

Some questions to ponder:

Do you track your applicant flow/adverse impact statistics (basic example here)?
If so, what do you do with the results?
If not, well...take this as a warning.


- Motion for class certification

- Plaintiff's reply memorandum in support of class certification

- Order approving class certification

- Notice to potential class members

Media articles about this case can be found (among other places) here and here.

George Lenard has discussed this case here, here, and here. Michael Harris discusses it here.


George said...

Thanks for the informed and informative post. I haven't reviewed the legal documents you cited, but certainly an interesting question is the quality of the evidence of validity -- as applied to these jobs.

One would hope that a company doesn't pay out this kind of money just to avoid cost of litigation when it has a good crack at prevailing on validity/business necessity!

George said...
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J. Weiner said...
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Doug Walner said...
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