DETROIT – Ford Motor Co. reached a preliminary settlement with plaintiffs in two age and gender class-action lawsuits Tuesday, agreeing to pay a total of $10.5 million without admitting wrongdoing.
The lawsuits challenged the automaker's management evaluation system, which the plaintiffs, current and former employees, alleged was unfairly biased against older, white male employees.
As part of the tentative settlement, plaintiffs agreed to drop their claims of race and gender discrimination, Ford said in a statement.
Each named plaintiff in the suits will receive up to $100,000, minus attorney fees, depending on the length of service and other considerations.
The attorneys will divide up to a quarter of the total settlement.
"The company is pleased to have resolved this difficult situation with our employees and is eager to put it behind," Joe Laymon, Ford vice president, corporate human resources, said in a statement.
"We are moving the company forward, focusing on building the world's best cars and trucks. Our employees are vital to our success," Laymon said.
Plaintiff's attorney Peggy Goldberg Pitt said in a statement, "The settlement appropriately and fairly resolves issues raised by the lawsuits."
The employees suing Ford argued that a management performance evaluation system put into place last year unfairly discriminated against older, white males by giving a disproportionate number of them low grades depriving the managers of raises or promotions.
The evaluation system was promoted by Jacques Nasser, who resigned under pressure on Oct. 30 as Ford president and chief executive officer. He was succeeded as CEO by chairman William Clay Ford Jr.
That same day, vice president of human resources, David Murphy, also resigned and was replaced by Joe Laymon.
Ford said he would make it a priority to attempt to settle the age discrimination suits in hopes of rebuilding the relationship between the company and its employees.
Plaintiff's attorney Glen Lenhoff said while he wasn't certain of any personal involvement by Ford, Nasser's departure was a "turning point" in moves to settle the cases without going to trial.
"After Nasser was replaced the attitude of the company changed and the company seemed to be more interested in settlement," Lenhoff said.
Both sides will be back in Wayne County Circuit Court on Thursday where a judge is expected to issue his preliminary approval, Ford spokeswoman Anne Marie Gattari said.
Before the settlement is final, a "fairness hearing" must be held where plaintiffs can convey their approval or disapproval on the proposed terms.
Gattari said that hearing likely would not be held before February.