Baldor to pay $2 million fine; disputes allegations

Baldor Electric Co. has agreed to pay a $2 million fine and implement new hiring practices under an agreement with the U.S. Department of Labor, but the company disputes the allegations that resulted in the action.

The U.S. Department of Labor’s Office of Federal Contract Compliance Programs announced Monday (June 25) that the company 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.”

According to the DOL compliance program, each contractor with 50 or more employees and $50,000 or more in government contracts must develop an affirmative action plan for all its locations.

“I am pleased with this settlement, which reflects a mutual commitment between the Department of Labor and the leadership of Baldor to ensure that all workers have a fair and equal shot at competing for good jobs,” Secretary of Labor Hilda L. Solis said in a statement. “Our shared goal is to create lasting change so that anyone who comes looking for work at Baldor can be sure that discrimination will never be a factor in determining who gets the job.”

Under the deal, Baldor will pay $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. Baldor is also required to “undertake extensive self-monitoring measures to ensure that all hiring practices fully comply with the law, including record-keeping requirements.”

But Baldor Spokeswoman Tracy Long said the DOL review and findings were based only on statistical analysis.

“It was pure modeling. …  We never had any complaints from this group. There were no complaints,” Long said Monday. “I think most folks in our area know that Baldor has always been committed to doing the right thing, for our communities and the people who work for us.”

She added that the company finally decided to agree to DOL terms to make the long-standing issue go away.

“Rather than go through anything lengthier or more expensive, we decided we’d just like to be done with it,” Long explained.

Long also said the “actions taken by them (DOL) could convince a company that it’s easier to take their operations offshore, but that’s not what Baldor wants to do. … We’re committed to keeping those (manufacturing operations) in the U.S., and taking care of our people here.”

According to the DOL statement, Baldor now has 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.

Prior to being acquired in a $4.2 billion deal by Zurich, Switzerland-based ABB Ltd. in early 2011, Fort Smith-based Baldor employed between 7,000 and 7,500 in 26 plants in five countries and sales offices serving more than 80 countries. About 2,000 were then employed in the Fort Smith area.