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Attorneys in a major race discrimination class action have reached a settlement that would force the national shipping company FedEx Corp. to pay out almost $55 million and overhaul its pay, discipline and promotions practices. The suit claimed that FedEx Express, a unit that performs overnight deliveries, harbored a culture of hostility toward people of color, allowing racial bias to infect its human resources decisions. If approved, the settlement would benefit some 20,000 hourly employees and low-level operations managers who have worked in the company’s western regional facilities since October 1999. Class counsel, led by James Finberg, a partner at San Francisco’s Altshuler Berzon, hammered out the deal with a defense team led by an in-house attorney from the FedEx corporate headquarters in Memphis, Tenn. A message for that attorney, Jeana Littrell, was returned Tuesday afternoon by a company spokeswoman who said, “We voluntarily entered into the consent decree because we believe that this action demonstrates our deep commitment to diversity and equal employment opportunities.” In the consent decree (.pdf), FedEx Express also continues to deny that it practiced discrimination. With monetary payments of about $54.9 million, Finberg said he believes the settlement in Satchell v. FedEx Express, 03-2659, would crack the top 10 discrimination settlements in U.S. courts. That figure includes $15 million for attorneys fees and costs, unspecified claims administration costs, and up to $360,000 for class representatives and people who gave declarations, according to a written agreement filed in court. But Finberg was more eager to talk Tuesday about the part of the settlement that will promote equal employment opportunities for FedEx’s black and Latino employees.
‘The money is nice, and people deserve to be compensated if they’ve been discriminated against. But the injunctive relief will go on for a long time and benefit people for years to come.’

James Finberg Altshuler Berzon

“The money is nice, and people deserve to be compensated if they’ve been discriminated against. But the injunctive relief will go on for a long time and benefit people for years to come,” he said. As part of the deal, FedEx agreed to stop using its “Basic Skills Test” as a prerequisite for promoting employees to higher-paid, more desirable positions. Finberg said he could show that only 47 percent of blacks and 62 percent of Latinos pass the Basic Skills Test, as compared with 86 percent of white employees. “So that test is a hurdle, and it’s keeping blacks and Latinos from getting these jobs,” he said. Finberg said the class counsel brought in a UC-Berkeley psychology professor who determined that the Basic Skills Test is not a valid measure of success on the job and that FedEx could come up with another such test to take its place. Under the proposed settlement, FedEx has also agreed to make its performance evaluation process less discretionary, while submitting policy changes to show that its revised practices do not continue to foster racial discrimination. Finberg said he hopes the injunctive relief measures prove to be a “win-win” situation for class members and FedEx. “Discrimination is not only evil; it’s stupid. And I think FedEx, by embracing this decree, will be a better company,” he said. U.S. District Judge Susan Illston will hear a motion for preliminary approval of the settlement on Friday afternoon. At that time, she will also consider adding Goldstein, Demchak, Baller, Borgen & Dardarian’s Barry Goldstein as class counsel in the case. Until now, Goldstein has served as a consultant for the class attorneys. Attorneys at Lieff, Cabraser, Heimann & Bernstein and Schneider & Wallace also represented the class, as did Oakland civil rights attorney John Burris and San Francisco’s Waukeen McCoy. Seyfarth Shaw’s Gilmore Diekmann Jr. has been preparing the defense case for trial, which had been set to begin next month.

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