Fastenal Company, a Minnesota-based manufacturer and distributor of fastening products, has agreed to pay $1.2 million in back wages and hire more minorities and women, a discrimination settlement announced yesterday.
The U.S. Department of Labor's Office of Federal Contract Compliance Programs found that the company, a federal government contractor, discriminated against 171 job applicants in Indianapolis and Atlanta. The applicants were seeking warehouse positions at two of the company’s distribution facilities.
Under the agreement, Fastenal committed to hire 154 African-American and 17 female applicants who were declined jobs and pay $1,253,611 in back wages and interest to the 7,398 African American and 1,055 female applicants who were named in the class-action complaint against the company.
Fastenal did not admit liability.The violations occurred while Fastenal received more than $35 million in government contracts for its products.
"Fastenal has taken a step in the right direction by working closely with our agency to resolve these issues," OFCCP Director Patricia Shiu said in a statement. "Together, we will ensure that the company continues to maintain all required employment records and only uses employment tests that are job related to the position for which they are applying."
Investigators from OFCCP's Indianapolis and Atlanta offices found that the company engaged in screening and testing practices that discriminated against African Americans and women. Government contractors are required to hire a certain percentage of minorities and women.
Based on the percentages, of the 794 female and African American applicants Fastenal interviewed from 2010-11, they should have hired 171 of them, said Rhonda Burke, spokeswoman for the Department of Labor.
Burke said a DOL review revealed that the company knew internally that they had not offered a proportionate number of jobs to African Americans and women but did nothing to address the issue. The review also revealed that Fastenal was using a commercially available written test that asked irrelevant questions of applicants for their warehouse positions, such as whether they had ever worked in retail operations or in clerical jobs.
"Selecting people out for employment through this written test was not a valid indicator of employment," said Burke. "You can make the leap it must be African Americans and women who dont' do as well on the test--but we don't know that for sure."
As part of the settlement, Fastenal has agreed to discontinue use of the written test and to revise its hiring and recordkeeping practices to ensure they fully comply with the laws and regulations that apply to federal contractors.
Based in Winona, Minnesota, Fastenal produces threaded fasteners, such as bolts, nuts, screws, and washers used in manufactured products and building projects. The company also sells a wide range of other industrial and commercial supplies. Fastenal operates approximately 2,700 stores located primarily in North America with additional locations in Asia, Europe, Central and South America, and Africa. The company also has 14 distribution centers in the U.S., Canada and Mexico.