Originally created 12/29/96

Discrimination makes business headlines in 1996



A secret tape catches Texaco executives belittling blacks. A defense contractor pays $13 million after showing older workers the door. The government sues an automaker, saying men groped and insulted women at an Illinois plant.

A look back at 1996 finds a litany of gloomy headlines about discrimination in the workplace. Injustices from the factory floor to the executive suite remind us that prejudice is still prevalent in corporate America.

But unlike years ago, public outrage is high and, if nothing else, the scandals of 1996 and settlements paid out may move companies to try harder to make workplaces more equal.

"It's been an eye-opening year," says David Thomas, a Harvard Business School professor who studies diversity in business. "But to the extent that such cases make us more conscious, it's been a good year."

The year's most dramatic case began with a tape recorder secretly slipped into a Texaco executive's pocket.

The recording caught executives at the country's 14th-largest corporation ridiculing blacks and plotting to destroy papers pertinent to a long-running racial discrimination lawsuit.

Days after the tape's release this past fall, Texaco agreed to a $176 million settlement, the largest ever for race discrimination. Civil rights leaders called a boycott and chairman Peter Bijur publicly apologized.

The case prompted corporate soul-searching as directors and human resource managers huddled to make sure their company was not the next Texaco.

After years of quotas, most companies have hired more than token numbers of women and minorities. Yet white men account for 90 percent of the senior ranks of all occupations, according to the Bureau of Labor Statistics.

Not surprisingly, white managers have trouble dealing with their corporate melting pots.

As far back as 1993, nine out of 10 companies had policies banning sexual harassment. Today an estimated 70 percent of the 1,000 largest corporations have diversity programs to help people work together.

Yet most such programs consist of training sessions that last less than a day, and few companies hold managers accountable for diversity efforts.

"Maybe we're all learning that just having handbooks and holding seminars is not going to be the answer," says Judith Vladeck, a leading employment discrimination attorney.

She and others bemoan the current attacks on affirmative action - most dramatically California's Proposition 209 ban, now mired in court fights. The year's discrimination cases show us workplaces are far from equal, says Ms. Vladeck.

Women hardly found equal footing at Mitsubishi's auto plant in Normal, Ill. Top managers stood by for years as male assembly line workers and low-level managers fondled, propositioned and cursed women workers, the Equal Employment Opportunity Commission contended in an April lawsuit.

The case against the Japanese carmaker's U.S. subsidiary could be the largest harassment case in EEOC history, both in the number of victims and the size of the penalties, according to the agency.

The government is also investigating sexual harassment at Astra USA, subsidiary of a Swedish pharmaceutical maker. And sexual harassment suits were filed in 1996 against brokerage Smith Barney and tobacco maker Philip Morris USA, among others.

Such cases are partly the legacy of Anita Hill's impassioned charges against Supreme Court Justice Clarence Thomas during his 1991 confirmation hearings. Women were inspired to speak out, legal advocates say.

That same year, women were allowed to receive monetary awards for the first time in sexual harassment cases, a change that has piqued lawyers' interest.

"Sexual harassment has come out of the closet and that's a major step forward," says Debra Ness, executive vice president of the Women's Legal Defense Fund.

The cause of older workers also moved forward this past year with Lockheed Martin Corp.'s recent $13 million settlement of one of the nation's biggest age discrimination suits.

Workplace discrimination cases of all types are grabbing more attention, civil rights lawyers say. And while the numbers of lawsuits haven't risen markedly in recent years, that could change.

"In the old days, the cases we heard about were individuals who couldn't get into the front door," says civil rights attorney Brad Seligman. "Now we're hearing about glass ceiling" class-action cases.

At the same time, employees are becoming more aware of their workplace rights and vocal about wrongs, and the federal government is taking a more aggressive stance, attorneys say.

Progressive companies such as Xerox, Texas Instruments and DuPont find a diverse and equitable work force profitable. In the same way that brainstorming works, using all types of workers in companies sparks more creativity.

But for companies slow to change, the year provides stinging lessons. A boycott against Mitsubishi continues and the boycott against Texaco is hurting dealers, although not harming sales. The oil company's stock, meanwhile, has yet to climb back to its trading level before the tape's release.

"These cases are damaging," says Patricia Digh of the Society for Human Resource Management. "But maybe damage is needed to propel us forward."

Workplace discrimination cases of 1996

Texaco: In November, Texaco settled a race discrimination lawsuit brought by 1,500 black workers by agreeing to spend $176 million on back pay and future raises for black employees and to set up a task force on diversity training and sensitivity. The settlement came 11 days after the revelation that top executives had been caught on tape belittling blacks and plotting to destroy documents in the case.

Mitsubishi: The federal government sued Mitsubishi Motor Manufacturing of America Inc. in April, saying company managers turned a blind eye as male workers harassed hundreds of female workers at the plant. The government has also joined 29 current and former female workers in a private suit against the carmaker.

Lockheed Martin Corp.: The company agreed in November to pay $13 million to settle one of

the nation's biggest age discrimination lawsuits, affecting 2,000 former employees of Martin Marietta Corp. The lawsuit contends Martin Marietta discriminated against workers age 40 and older. Martin Marietta is now part of Lockheed Martin Corp., the leading U.S. defense contractor.

Smith Barney: A suit was filed against Smith Barney in U.S. District Court in Manhattan in May, alleging that a Long Island branch of the brokerage was run like a lewd fraternity for more than a decade. A suit was also filed in California.

Chevron: Chevron agreed in November to pay $8.5 million to settle a class-action lawsuit that alleges it discriminated against hundreds of women in pay, promotions and assignments. The proposed settlement must be approved by a Superior Court judge at a Jan. 21 hearing.