HVAC system maker Daikin Industries will pay $100,000 in back wages and interest to resolve alleged race-based hiring discrimination against 98 Black applicants at a facility in Verona, Virginia.
The agreement with the Department of Labor comes after an agency review found the industrial machinery maker allegedly discriminated against Black applicants for assembler positions at the Verona plant from Jan. 1, 2020, to Dec. 31, 2020.
Japan-based conglomerate Daikin Industries operates 66 manufacturing subsidiaries and has over 96,000 employees worldwide. The company has contracts with the U.S. General Services Administration to provide federal agencies with HVAC systems, according to the release. The Verona site produces Daikin Applied’s chiller products.
The allegations violate an executive order prohibiting federal contractors from discriminating in hiring, the Department of Labor said. The company entered into a conciliation agreement with the Office of Federal Contract Compliance Programs on Sept. 29.
Within the company’s $100,000 payment, Daikin will pay $88,734.20 in back pay and $11,265.80 in interest to be distributed among the eligible class members.
“Daikin Applied appreciates the efforts of the U.S. Department of Labor (DOL) and other government agencies that help ensure equitable hiring practices,” Daikin said in a statement to Manufacturing Dive, HR Dive’s sister publication. “While there was no finding of wrongdoing, we reached a voluntary agreement with the DOL in this matter. Daikin has long cultivated an environment in which all individuals have equal opportunities for employment and advancement.”
In addition to providing monetary compensation, Daikin must modify its employment practices and evaluate its selection process regarding the assembler positions. It must also stop using pre-employment tests as part of its selection process.
Class members will also be prioritized over other candidates for the assembler position until three individuals from the list of affected applicants have been hired or the list has been exhausted, according to the agreement.
The HVAC system maker must retain personnel and employee records and implement an auditing system for its affirmative action program. Daikin must submit progress reports to the Department of Labor through the end of next year.
“Federal contractors that accept taxpayer funds to fulfill contracts know that equal employment opportunity and compliance with federal regulations are non-negotiable,” Office of Federal Contract Compliance Programs Philadelphia Regional Director Samuel Maiden said in a statement. “The Office of Federal Contract Compliance Programs will make certain the issues raised in this compliance evaluation are resolved and that Daikin Industries puts procedures in place to safeguard the process for future applicants.”
