1. A Racial Discrimination Suit
Texaco, Inc.
A Racial Discrimination Suit
A Notre Dame Case Study prepared by research assistants Tanya Goria, DeWayne Reed, and Dan Skendzel under the direction of
Professor J. S. O’Rourke, IV. Copyright 2000.

2. The Situation Peter Bijur, Texaco CEO. Roberts v. Texaco, Inc.
Pending lawsuit from 1994.
$520 million filed by six employees on behalf of almost 1,500 other minority workers.
Texaco “fostered a racially hostile environment.”

3. Background Texaco: #11 on the Fortune 500 list.
More than 27,000 employees worldwide.
Ranked third behind Exxon and Mobil in the petroleum industry.
$45 billion in revenues in 1996.

4. Background On ABC’s Nightline, Bijur offered the following:
16.6% of its U.S. work force of 27,426 employees were minorities in 1991.
In June of 1996, 22.3% of its 19,554 employees were minorities.
Of those, minorities in management positions were at 6.8% in 1989 and 9.5% in 1994.

5. Background
In 1996:
EEOC found that black workers seeking promotion were chosen “at rates significantly below those of their non-black counterparts.”
The U.S. Department of Labor found that it took minorities up to twice as long as white workers to win promotions.

6. The Meeting Meeting participants - August 1994.
Alleged racial epithets:
Statement characterizing African Americans in unflattering terms.
“You know how black jelly beans agree.”
References to National Anthem incident.
References to Hanukkah & Kwanzaa.

7. The Meeting
Richard Lundwall, Senior Coordinator for Personnel Services in Finance Dept.:
Recorded and transcribed as minutes of the meeting.
Turned information over to plaintiffs of Roberts v. Texaco class-action suit.

8. The Meeting Response of Bob Ulrich, Texaco Finance Manager:
“Black jelly bean” term, in and of itself, is not derogatory.
Claims to have recalled term from a conference on diversity.

9. Public Outcry
Seemed to confirm preconceived notions of corporate America.
Jesse Jackson became the voice of the black community.
Called for boycott of Texaco.
Market response: drop of 5 points within a week, to 95 3/8.

10. Bijur’s Next Step? Best approach in public-relations disaster?
How to respond to the released tapes?
Should employees be addressed separately from the public sector?
Is discrimination part of the Texaco culture?
Are reparations necessary?

11. Texaco, Inc. Racial Discrimination Suit
The B Case

12. November 4th, 1996 The New York Times story breaks.
Independent investigation:
Texaco hired Michael Armstrong, Manhattan lawyer.
Initial Texaco press release.

13. November 4th, 1996 Bijur’s personally authored letter to employees.
Broadcast message via satellite to employees.

14. Behind the Scenes Bijur meets with:
Board of directors.
Shareholder groups.
Influential individuals.
Bijur makes himself available to press.

15. Subsequent Events November 6th, 1996 November 12th, 1996
Bijur publicly outlines six-step plan.
November 12th, 1996
Bijur meets with Jesse Jackson.
November 15th, 1996
Texaco settles Roberts v. Texaco.
Bijur addresses employees.
Interview with Tom Brokaw of NBC.

16. Subsequent Events December 1996 Summer of 1997
Texaco releases Work Force Diversity Plan.
Jackson drops boycott.
Summer of 1997
Digitized tapes proved transcripts incorrect.

17. Time Line of Events Dec 1996 Work Force Diversity Plan & Jackson
Drops boycott
Nov 4th
Initial
Press
Release
Nov 4th
Satellite
Message to
Employees
Nov 12th
Bijur meets
Jackson
Nov 4th
NYTimes
story breaks
Nov 5th
Bijur meets
Press
Nov 4th
Independent
Investigation
Nov 4th
Bijur’s
Letter
Nov 5th
Bijur meets
Stakeholders
Nov 6th
Six step plan
Nov 15th
Rob v. Tex
Settled
&
Bijur
addresses
employees
Summer
of 1997
Digitized
Tapes
Show
Transcripts
Incorrect

18. Texaco, Inc. Racial Discrimination Suit