$2 Million Settlement in Back Wages and Interest for Hiring Discrimination by Government Contractor

Tuesday, June 26, 2012

Baldor Electric Co. has agreed to settle allegations of systemic discrimination stemming from the company's applicant screening process at its facility in Fort Smith, Ark. The Office of Federal Contract Compliance Programs investigators determined that the process violated Executive Order 11246 by creating a disparate impact on women and minorities. As a result, 795 qualified women, African-Americans and job seekers of Asian and Hispanic descent were denied the opportunity to advance to the interview stage when applying for production and laborer positions.

Under the terms of the conciliation agreement negotiated by OFCCP, Baldor will pay a total of $2 million in back wages and interest to the affected individuals and will make at least 50 job offers to members of the original class as positions become available. The company also has agreed to undertake extensive self-monitoring measures to ensure that all hiring practices fully comply with the law, including record-keeping requirements.

Baldor Electric, which is owned by Zurich, Switzerland-based ABB Ltd., manufactures industrial motors and generators. The company currently holds federal contracts worth more than $18 million with the General Services Administration and the U.S. departments of Veterans Affairs and Justice. From 1997 to 2010, Baldor received $79 million to produce batteries and generators for federal agencies including GSA, the Justice Department and the Army.

In addition to Executive Order 11246, OFCCP enforces Section 503 of the Rehabilitation Act of 1973 and the Vietnam Era Veterans' Readjustment Assistance Act of 1974. As amended, these three laws require those who do business with the federal government, both contractors and subcontractors, to follow the fair and reasonable standard that they not discriminate in employment on the basis of sex, race, color, religion, national origin, disability or status as a protected veteran. 

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