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 $10.5 million settlement would put an end to the suits, which charged a management evaluation system put in place by former president and CEO Jacques Nasser discriminated against older, white men.
As part of the tentative settlement, plaintiffs agreed to drop their claims of race and gender discrimination, Ford said in a statement.
According to plaintiff's attorney James Fett, about 620 current and former Ford employees could see some of the settlement money.
Each named plaintiff in the suits will receive up to $100,000, minus attorney fees, depending on the length of service and other considerations. Up to a quarter of the total settlement is set aside for the attorneys.
"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.
Plaintiff's attorney Peggy Goldberg Pitt said in a statement, "The settlement appropriately and fairly resolves issues raised by the lawsuits."
Both sides are due in Wayne County Circuit Court 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. Gattari said that hearing likely would not be held before February.
Ford's year-old performance evaluation system - which has since been revised - had been used to evaluate about 18,000 managers and supervisors, or about 5 percent of Ford's work force.
Employees were graded A, B, or C. Those receiving a C could lose bonuses and raises, and two consecutive C's could mean dismissal. Initially, at least 10 percent of employees were to be graded C, but that was lowered to 5 percent.
The plaintiffs claimed that before the grading program, they had received positive evaluations. Under the new system, they said, they got C's while some women and minorities with less experience or inferior work records were rated higher.
The evaluation system was promoted by 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.
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.
© MMI, CBS Worldwide Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report