Corporate America’s Black Eye

The latest rash of corporate misconduct has triggered new battles over the corrosive effects of bias in the American workplace

in a similar similar manner.

R.R. Donnelly & Sons Co.: A $500 million suit was filed against the nation’s largest commercial printer last November. The suit charged that hundreds of black workers were laid off during a plant closing while white employees were transferred to other plants.

Circuit City: In Richmond, Virginia, a jury awarded almost $300,000 to two black employees who charged they were passed over for promotions
because of their race. Another suit is pending.

Publix Supermarkets Inc.: A classaction suit was brought against this organization in 1991, covering more than 100,000 women who accused the company of systematically denying them promotions, raises and preferred assignments. The case was settled for $81.5 million in January. There was also a $3.5 million settlement with the EEOC following charges that the company had similarly denied such opportunities to African Americans.

Denny’s Restaurants: Its parent company, Flagstar, settled two classaction lawsuits in 1994 totaling $46 million. The lawsuits were brought by several Secret Service agents and a group of students who said they received discriminatory services at a Denny’s restaurant. The chain paid $54 million to nearly 300,000 customers to settle the lawsuits and committed $ 1 billion to minority hiring.

Texaco: In 1994, the conglomerate was accused of racial discrimination by two African American employees. Texaco vigorously fought the lawsuit, which was later joined by hundreds of other African American employees, eventually evolving into a class-action suit. It wasn’t until the discovery of a meeting–secretly taped by a senior executive–in which racial slurs were allegedly used that the suit came to a head. Following threats of a nationwide boycott, Texaco Chairman Peter Bijur agreed to pay the plaintiffs $ 176.1 million as well as award an 11% salary increase to current employees who were part of the class-action suit. Texaco subsequently announced plans to implement strong diversity programs within the company as well as increase its relationship with other African American businesses.

Pressure and public scrutiny can be effective tools. But a little financial pressure never hurts when seeking to resolve such a biased incident. In addition to Texaco’s stocks becoming vulnerable because of boycott threats, Texaco had added incentive to find a quick resolution. New York State Comptroller H. Carl McCall fired off a letter to Bijur shortly after the story broke asking for a full condemnation of the remarks. But McCall had an ace in the hole reserved to few. As the sole trustee of the $75 billion New York State Retirement Fund–which owns 1.2 million shares of Texaco–he indicated he’d have no problem selling the shares if the stocks lost money as the result of a boycott and if a settlement wasn’t made quickly.

Casellas sees a number of reasons for the increase in complaints, including a heightened awareness by the populace of the wage gap between minorities and whites and a public mood fueled by antiAffirmative Action rhetoric. But most significant was the strengthening of the Civil Rights Act of 1991. Before the 1991 change, victims of racial discrimination could only regain their old jobs

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