The Labor Department says the ground delivery unit of FedEx Corp. will pay $3 million to settle federal charges of hiring discrimination.
The settlement with the department's Office of Federal Contract Compliance Programs covers wages and back interest to more than 21,000 job applicants who were rejected for positions at 23 facilities in 15 states.
The agreement stems from a seven-year investigation into hiring practices at FedEx Ground Package System Inc. and FedEx SmartPost Inc.
FedEx has agreed to offer jobs to about 1,700 of the affected workers as openings become available.
The Labor Department says the allegations involved discrimination on the basis of race, sex and national origin, as well as record-keeping violations.
FedEx spokeswoman Angela Wheland says the company admits no wrongdoing and settled to avoid costly litigation.