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A Racial Discrimination Suit

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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

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