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Companies Caught in Screening Snafus

Monday, October 1, 2012
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As part of a settlement between it and the Labor Department's Office of Federal Contract Compliance Programs, Baldor Electric Co. will pay $2 million to a group of nearly 800 women and minorities who had applied for jobs with the company.

The OFCCP says an audit of Baldor's applicant-screening process revealed that it unfairly blocked 795 qualified women, African-Americans, Hispanics and Asian-Americans from obtaining entry-level positions at the company, which is a federal contractor.

The agreement between the OFCCP and Baldor comes in the wake of one of the agency's largest settlements ever. In March, the OFCCP announced a settlement with FedEx Ground and FedEx SmartPost, both part of Memphis-based FedEx, in which the companies agreed to pay a total of $3 million in back wages and interest to 21,635 applicants who were rejected for entry-level positions at the companies' facilities.

The agency said its compliance officers found evidence that FedEx's hiring processes and selection procedures discriminated against men and women as well as people of every ethnic category, including Caucasian. The OFCCP also said the audit uncovered extensive violations of its record-keeping requirements for federal contractors.

The settlements are a reminder that the so-called "desk audits" of the past -- in which federal agencies such as the Equal Employment Opportunity Commission were more willing to accept company hiring data rather than conducting their own investigations -- are largely a thing of the past, says one attorney.

"They're doing fewer audits than before, but the ones they are doing are more in-depth," says Constantinos G. Panagopoulos, an employment attorney and partner at Ballard Spahr in Washington. "They're going to come in and slice the data in different ways."

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Under the terms of its agreement, Baldor will pay a total of $2 million in back wages and interest to the 795 applicants and will make at least 50 job offers to members of the original class as positions become available. According to Baldor spokeswoman Tracy Long, the company doesn't believe it's done anything wrong. but that "it was going to be a much lengthier process to fight it any longer."

Although companies that aren't federal contractors obviously don't have to worry about OFCCP audits, other government agencies -- including the EEOC -- are sharply focusing on applicant-screening policies that may be discriminatory, says employment attorney Jay Warren, a partner at Bryan Cave in New York.

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