Judge Approves FedEx Skills Test Discrimination Suit Settlement

August 15, 2007 (PLANSPONSOR.com) - FedEx Express, a subsidiary of FedEx Corp., received final approval Wednesday of a settlement agreement in the class action lawsuit that alleged racial discrimination by the company.

According to a company press release, as part of the agreement FedEx Express will eliminate its Basic Skills Test (BST) it used as a prerequisite for promoting employees to higher-paid, more desirable positions.

The lawsuit alleged the FedEx Express unit harbored a culture of hostility toward people of color, allowing racial bias to creep into its human resources decisions (See Judge to Consider $55M FedEx Discrimination Settlement ).

While FedEx Express said in its press release it firmly believes the BST is a lawful and valid selection tool, discontinuing the BST removes the perception by some that it was a barrier to advancement for minority employees, the company said.

The settlement also includes a payment of approximately $55 million, paid by insurance, for administrative costs associated with the settlement, $15 million for the attorneys’ fees and costs of class counsel, and compensation for approximately 23,000 class members.