|
Texaco settles bias suit
|
 |
November 15, 1996: 9:00 p.m. ET
Oil giant will pay $175 million to settle race discrimination suit
|
NEW YORK (CNNfn) - Texaco agreed Friday to a multi-million-dollar settlement of a racial-discrimination lawsuit filed on behalf of the oil giant's minority employees.
Lawyers for the approximately 1,400 employees say the settlement is worth $175 million.
Texaco agreed to pay $115 million to current and former employees who were part of the suit, along with a one-time salary increase of about 11 percent, or about $26 million for current employees, effective January 1, 1997.
The oil giant will also spend $35 million on diversity training and sensitivity programs.Texaco plans to create a task force with three members appointed by the company, three by the plaintiffs and a chairman will be chosen by both sides. In addition, the company will allow an independent monitor of its minority relations over the next five years.
Plaintiffs' Attorney Michael Hausfeld, said the case makes a statement to companies across the United States.(159K WAV) or
(159K AIFF)
In a statement to employees, Texaco's Chairman Peter Bijur, pledged Texaco management is committed to the elimination of any trace of discrimination in the company.(150K WAV)
or (150K AIFF)
Six Texaco workers originally filed the case in 1994, but the case grew to cover 1,400 employees.
Although plaintiffs brought the suit two years ago, progress toward a settlement had been slow until last week.
That's when plaintiffs' lawyers made public a secretly-made audio tape of Texaco executives allegedly making racist remarks and plotting to destroy documents usable in the case.
However, Texaco claimed an expert enhancement of the tape failed to demonstrate the executives had actually used slurs.
Still, civil-rights groups threatened to launch demonstrations, boycotts and a campaign to convince institutional investors to sell Texaco shares unless the company settled the case by Saturday.
Kweisi Mfume, president of the National Association for the Advancement of Colored People, called Friday's agreement the "first step towards racial reconciliation. It calls our attention to the need to be eternally vigilant."
Texaco lost more than a $1 billion dollars of it's capitalization during this saga. The companies stock rallied immediately Friday after a week of volatile trading.
"The $175 million works out to 67 cents a Texaco share. Not a big deal compared to what investors initially, in the trading days that followed this news, did to the stock," said William Randol, oil analyst for Lehman Brothers.
The settlement reduces but does not eliminate pressure on Texaco. The boycott threat is on hold, and the NAACP says it will be watching Texaco's commitment to minorities before it decides whether to urge Texaco investors to sell their shares.
There remains the crucial matter of whether Texaco executives conspired to destroy documents. A federal grand jury is investigating possible criminal acts, and has issued a target letter to the Texaco executive who made the audio tape.
|
|
|
|
|
|
Texaco
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
