Thursday, April 05, 2012

Judicial Terrorism: U.S. Department Of Labor Extorts $3 Million From FedEx In "Civil Rights Suit", Although There Were No Individual Plaintiffs

In his weekly column republished in the Anchorage Daily Planet, conservative Black columnist Thomas Sowell decries a recent outbreak of judicial terrorism by the federal government. The U.S. Department of Labor extorted $3 million from FedEx to settle a civil rights suit. Sowell contrasts the FedEx situation to a similar inquisition faced by Sears, in which Sears chose not to settle, to illustrate why so many companies choose to settle out of court rather than fight.

On March 21st, 2012, the New York Times reported more details on the FedEx case. What's disturbing is that the Department of Labor suit was not triggered by any specific complainants or victim; in fact, there were none. Instead, it was triggered by statistical analysis; the Labor Department regularly "audits" companies to "find" evidence of discrimination. Worse yet, racial disparity was the only specific triggering mechanism cited.

Patricia A. Shiu, director of the contract compliance office, said her office first uncovered evidence of discrimination at FedEx seven years ago during a regularly scheduled review, finding discrimination against Blacks, Hispanics, Asian-Americans and American Indians compared with similarly situated White applicants. As an example, the audit of a FedEx facility in Grove City, OH found that discrimination had affected 3,898 job applicants. The department found that 29.8 percent of the 6,178 men who applied were hired, compared with 18.7 percent of the 2,277 women. It found that 33.2 percent of the White applicants were hired, 21.9 percent of the Blacks, 18.7 percent of the Hispanics and 15.7 percent of the American Indians. Under the terms of the settlement, in which FedEx admitted no wrongdoing, the 3,898 rejected applicants at the Grove City facility will receive a total of $617,260 in back wages and will be extended 312 job offers. WMC Channel 5 in Memphis, where FedEx is headquartered, offers more details; companywide, the settlement will apply to 21,635 job applicants who were rejected for positions at 23 separate facilities. Of the 21,635 rejected applicants covered by the settlement, 61 percent were female, 52 percent Black, 14 percent Hispanic, two percent Asian, and less than one percent American Indian. None were White.

Read the Department of Labor's March 22nd press release HERE.

Patrick Fitzgerald, a spokesman for FedEx Ground, said “We agreed to the $3 million to avoid what would have been a prolonged and much more costly resolution process.” WMC Channel 5 reported that the $3 million settlement pales in comparison to FedEx's third quarter performance; third quarter profit more than doubled compared to the same time last year and an extra $290 million goes a long way.

Shiu said “the beauty” of the 4,000 regular audits her office does each year was that they could find evidence of bias even when applicants had not filed complaints and did not realize they had faced discrimination. Shiu does admit that her agency also interviewed job applicants and FedEx officials, but that was after they had launched their "audit", so most likely her office was looking for validation of their theory rather than an honest inquiry.

So Patricia Shiu has openly admitted two disturbing facts. First, any racial variation in hiring is presumed to be racial discrimination without regard for any other factors. And second, it is not required for any victims to launch specific complaints; litigation is triggered simply by a statistical model. Yet some companies seem to be exempted from these audits. For example, the National Basketball Association, which is 77 percent Black, hardly "looks like America", which is 15 percent Black, yet I am not aware of any Labor Department audit of the NBA. So apparently, a company can only be "too White" or "too male"; it can never be "too Black" or "too female".

So why didn't FedEx fight the complaint? Thomas Sowell cites the experience of Sears as an answer. Years ago, Sears spent $20 million fighting a sex discrimination charge lodged by a separate federal agency, the Equal Employment Opportunity Commission (EEOC), that took 13 years to make its way through the legal labyrinth. In the end, Sears prevailed in 1986 - if spending $20 million and getting nothing in return can be called winning. That's called a Pyrrhic victory.

It's no wonder that so many corporation are such enthusiastic cheerleaders for diversity and function as proxy enforcers of political correctness. With a rogue federal agency empowered to do 4,000 "audits" per year, these companies are merely trying to protect themselves against judicial terrorism.


  1. Ya its always cheaper to settle out of court. Why do you think mediation has become such a huge business. No one wants to go to court with 6 $800 an hour attorneys. It's a shame but maybe we should change the law for these types of cases in which they should be looked at individually instead of always using precedent to decide award amounts. Plus lawyers cost too much.

    1. Or else these civil rights bureaucracies need to change their paradigm and not assume that every racial disparity is attributable to discrimination. For a civil rights agency to launch an inquisition solely because of "statistical analysis" is ludicrous and is tantamount to profiling.

    2. I agree wholeheartedly. Actuarial science is not an exact one...has never been. There is no algorithm for human decency.