BGE to pay $350,000 to resolve racial hiring concerns

Baltimore Gas and Electric Co. plans to announce today that it will pay $350,000 to a group of African-American job candidates to resolve hiring-diversity concerns raised by the federal government.

A routine audit by the U.S. Department of Labor found substantially lower levels of African-American hires in two utility trainee job classifications than would be expected between December 2007 and November 2008, based on the pool of applicants, BGE said.


BGE CEO Kenneth W. DeFontes Jr. said the audit did not find similar problems in the company's 229 other job categories. He said BGE independently concluded it had an imbalance in 2009 and changed its trainee-hiring process before the audit began that year.

"We've signed this agreement, we will comply certainly with both the spirit and intent, but we also want to make sure people know this is something we had already corrected," DeFontes said. "I think we're now on a trajectory that is really where we need to be as a company."


The Labor Department has not yet announced the settlement but confirmed BGE's account of it.

"Federal contractors agree to conduct hiring, promotions and compensation fairly … and all examples of noncompliance are concerning," said Michele Hodge, Mid-Atlantic regional director of the agency's Office of Federal Contract Compliance Programs. "We are pleased that Baltimore Gas and Electric, as part of this agreement, is taking proactive steps to come into compliance with the law and prevent workplace discrimination."

The Office of Federal Contract Compliance Programs originally zeroed in on BGE's cable installer trainee, cable splicer trainee and distribution construction trainee positions. African-Americans accounted for about a third of applicants for those positions in the 12 months the office analyzed, but about 8 percent of hires, BGE said.

Ultimately, the Labor Department office determined that the problem was limited to two of the trainee jobs: cable splicer and distribution construction.

DeFontes said he believes hiring decisions in those job categories were influenced by employee referrals. BGE has since altered that process to require that referred job candidates go through the same screening process as all other applicants, he said.

"If you're going to change your diversity mix over time, you have to make a concerted effort to do that, and we are doing that and have been," he said. "In these couple of classifications, though, we were getting a lot of referrals, which tends to distort the pipeline a bit."

The $350,000 payment will be split between 58 African-American job candidates, BGE said. DeFontes said the company also will hire at least six of the candidates.

He said more than 30 percent of the company's utility trainee hires are now minority applicants, same as BGE hiring overall.


"We are absolutely committed to being at the forefront as a company in having a workforce that represents the community that we serve," said DeFontes, who chairs the company's Diversity and Inclusion Council.

Michael Higginbotham, a University of Baltimore law professor, said it's simply good business for a company to make sure it reflects its community — and to take steps if some of its hiring practices are undermining that goal. A referral program can identify good potential employees, but it also can have unintended side effects, he said.

"If your workforce lacks diversity, particularly the senior members of your workforce … a referral program may distort the hiring practices," he said. "Because our society is still separated in many respects, that happens."