Texaco Discrimination Case
Two weeks after it was disclosed that top Texaco executives had been caught on tape apparently plotting to destroy documents and using racial slurs against African-Americans, Texaco agreed Nov. 15, 1996 to pay $176.1 million to settle a 2-year-old race discrimination suit.
At a news conference in Washington, an attorney for the plaintiffs said the settlement included a $115 million cash payment, $26.1 million in pay raises over five years for black employees and $35 million in sensitivity and diversity training programs. The following are some of the key documents in the case.
Texaco's Diversity Plan
Civil rights leaders halted a nationwide boycott of Texaco following the oil company's pledge to give women and minorities better treatment. The following is Texaco's new diversity policy outlined in a press release on December 18, 1996.
Former Texaco Executive Indicted
Former Texaco executive, Richard Lundwall, has been charged with obstruction of justice in connection with the racial discrimination lawsuit against Texaco. Lundwall secretly taped conversations in which Texaco executives allegedly belittled minority groups and plotted to conceal and shred documents crucial to the plaintiffs' case. Lundwall turned over these tapes to plaintiffs' attorneys after he was fired from Texaco in August. The following is the November 19, 1996 Department of Justice press release along with the criminal complaint.
The Settlement Agreement
Texaco settles the largest ever racial discrimination suit, agreeing to pay $115 million to approximately 1,400 class members, $26.1 million in raises over the next five years to minority workers, and $35 million to fund a Task Force to implement changes in the company's human resources programs.
Derivative Suit by Shareholders
Edith Citron and Martin Philip are lead plaintiffs in a shareholder's derivative action brought against Texaco. The complaint charges that the company's named directors and officers "grossly" mismanaged the company, breached their fiduciary duty, and damaged Texaco. As a result of this mismanagement, plaintiffs claim that "the image, reputation and financial condition of Texaco have been damaged, it has been exposed to substantial financial liability, it was the target of an extensive investigation by the [EEOC] regarding possible violations of the federal and state civil rights laws, as well as having been named in several litigations alleging violations of the civil rights statutes."
Report from Independent Investigator
Texaco released this report titled "Interim Report of Independent Counsel" appointed to investigate allegations that Texaco executives had used racial slurs in a meeting and discussed destroying documents. This interim report addressed the first of these allegations, concluding that executives were misquoted and that the references to "black jelly beans" did not appear to have been intended as derogatory to African-Americans.
Order to Show Cause
Attorneys representing African-American Texaco employees successfully sought an order to show cause why Texaco should not be sanctioned for discovery abuse. Also included is an affidavit from one of plaintiffs' counsel describing audio tapes in which Texaco executives disparage minority employees and discuss shredding and purging certain documents, as well as excerpts from those tapes.
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