Racial Discrimination at FedEx

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Case Details:

Case Code : HROB074
Case Length : 16 Pages
Period : -
Pub. Date : 2005
Teaching Note :Not Available
Organization : -
Industry : -
Countries : -

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"We take allegations of discrimination very seriously, and we will not tolerate discrimination of any kind in the workplace. We pride ourselves on having a progressive people philosophy and a diverse workforce."¹

- Cornell Christion, FedEx spokesman in 2002.

"FedEx's policies do not provide fair treatment. If a company is going to claim to treat people fairly, it should do so. All employees should be rewarded for their hard work, loyalty, and track records. We minorities were singled out for discipline and passed over for promotions compared to our counterparts who were not minorities. That is not fair treatment."²

- Derrick Satchell, Lower-level Manager at FedEx Express in 2005.

Introduction

On September 28 2005, the federal judge of San Francisco approved a class action³ discrimination lawsuit on FedEx Express, an operating company of the FedEx Corporation (FedEx) filed by the company's minority employees.

FedEx was accused of discriminating against these employees on the basis of race, and denying them fair pay scales, performance evaluations, and promotions (Refer Exhibit I for US Federal Law which protects individuals from discrimination in employment based on race). Commenting on FedEx's practices, the plaintiff's lawyers said that FedEx followed racial discrimination without considering that discrimination of any kind was unacceptable and that minorities were protected by the Civil Rights Act of 1964. According to one of the plaintiffs' lawyers, Waukeen McCoy, "The evidence in this case shows that FedEx treats its minorities as though the civil rights movement never happened".⁴

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The plaintiffs claimed that FedEx's policy and practice of racial discrimination against its minority employees caused them pain and agony. One of the plaintiffs said, "When I first joined FedEx almost 10 years ago, I believed I was joining a company where everyone has a chance to succeed regardless of race. Then I saw my white peers getting promotions with little effort, while I and my African-American peers got rejection letters. FedEx needs to change its policies and its culture to treat minorities fairly."⁵

It was not the first time that Fedex was being accused of racial discrimination. During the late 1990s and early 2000s, many discrimination related suits had been filed against FedEx. Responding to these allegations, FedEx claimed that the company did not allow any sort of employee discrimination and considered 'objective factors' which stressed the employees' skills, performance, discipline and experience to promote or reward them. FedEx was in fact listed on Fortune magazine's list of "50 Best Companies for Minorities" for 2000-01 and for 2003. FedEx was also named among the "100 Best Companies to Work for in America" for consecutive years 1998-2005 and the "World's Most Admired Companies" in 2005 (Refer Exhibit II for Awards & Recognition).

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1] Julie N. Lynem, "FedEx suit alleges racial discrimination; minority workers charge unfair treatment," www.sfgate.com, December 13, 2002.

2] "Class Counsel announce that Federal Court certifies Class Action Lawsuit by African-American and Latino employees against FedEx Express," www.hola-arkansas.com, September 29, 2005.

3] A class action is a suit brought out by individuals on behalf of a large group of people (from 20 individuals upwards) who are affected or may be affected by a perceived fraud or misconduct of a similar nature. A judge has to decide if the case meets the legal requirements for a class action.

4] "FedEx sued for racial discrimination," www.money.cnn.com, December 12, 2002.

5] "Class Counsel announce that Federal Court certifies Class Action Lawsuit by African-American and Latino Employees against FedEx Express," www.hola-arkansas.com, September 29, 2005.