Package delivery company FedEx Corp. said Wednesday that it had agreed to settle a racial discrimination lawsuit brought against its express unit, FedEx Express, for $53.5 million.
The suit alleged that FedEx Express discriminated against its African American and Latino workers by passing them over for promotion, paying them less than white workers and treating them unfairly in evaluation and disciplinary proceedings.
Memphis, Tenn.-based FedEx has denied the accusations.
"There has been no finding of wrongdoing on the part of FedEx," company spokeswoman Sandra Munoz said.
The settlement cost will be covered by insurance, Munoz said.
FedEx said it voluntarily entered into the settlement, which is subject to approval by the U.S. District Court for the Northern District of California.
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, said the agreement was a "win-win situation."
The settlement would affect about 20,000 employees who work or have worked for FedEx in the company's western U.S. region, which includes 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 said.
As part of the settlement, the company will 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 approves the settlement at a hearing slated for Friday, it would send details to class suit members for their consent, a process Finberg said could be completed by August.