Coke Announces $192.5 Million Settlement
A T L A N T A, Nov. 16, 2000 -- The Coca-Cola Co. agreed today to pay $192.5million to settle a racial discrimination suit by black workers.
The amount includes $113 million in cash, $43.5 million toadjust salaries, $36 million for oversight of the company’semployment practices. Coke also will pay $20 million in attorneys’fees and plans to donate $50 million to its foundation forcommunity programs.
The soft drinks maker also agreed to have its employmentpractices reviewed by an outside group.
To cover the cost of the settlement, the company will take a$188 million charge in the fourth quarter.
Shares of Coca-Cola fell 6 cents to $61.44 in afternoon tradingon the New York Stock Exchange.
The settlement was approved by U.S. District Judge RichardStory, in whose court the suit was filed in April 1999. Details ofthe settlement will be sent to about 2,000 class members beginningnext month.
The lawsuit claimed Coca-Cola discriminated against blacksalaried employees in pay, promotions and evaluations. The companydenied the claims.
The settlement covers salaried black employees in the UnitedStates who worked for Coke between April 22, 1995, and June 14,2000.
Watchdog Group At Center of Suit
The seven-member watchdog group, charged with making sureCoca-Cola is fair in pay, promotions and performance evaluations,was a centerpiece of the settlement. Three members will beappointed by the plaintiffs’ lawyers, three by Coke and a chairmanjointly appointed by both. The task force will recommend changesand ensure they are carried out; Coke retains the option ofchallenging changes it feels are not financially or technicallyfeasible.
A toll-free telephone line will be established to receivecomplaints 24 hours a day.
A newly created ombudsman will investigate all complaints,report to Coca-Cola Chairman Doug Daft and give periodic reviews tothe task force.
The agreement also requires Coke’s board of directors to monitorthe company’s progress in meeting its new obligations, including:
—Reviewing and changing policies and practices on pay,promotions and performance evaluations as necessary.
—Compiling employment data and working with the task force toimprove working conditions.
—Ensuring managers make fair decisions about employeecompensation, including initial salaries, merit increases, bonusesand stock options.
The task force is modeled after a similar group established fouryears ago in the settlement of a discrimination lawsuit againstTexaco.
Coca-Cola’s will include former government officials in laborand civil rights, professors, lawyers and diversity consultants.