Novellus Systems, Inc. agreed to pay $168,000 to settle race harassment and retaliation claims brought by an African-American employee who complained that he was subjected to racist rapping by a co-worker.

Michael Cooke alleged that the co-worker routinely listened to — and rapped along with – music prominently featuring racial epithets including the N-word.  According to the EEOC, Cooke complained to supervisors that the music was offensive but the co-worker kept rapping and the company failed to take necessary corrective action for more than a year.

“The EEOC is not in the business of judging anyone’s musical tastes, but we are concerned when we find that an employer failed to respond promptly after being put on notice of racially offensive language or conduct in the workplace,” said Regional Attorney William Tamayo.

The settlement was part of a two-year consent decree under which the company agreed to adopt a zero-tolerance harassment policy and to specifically identify offensive music as a potential form of harassment in the policy. 

“We commend the company for resolving this action and for agreeing to modify its anti-discrimination policies,” said Tamayo.

The Lesson

In commenting on lessons employers might glean from this case, EEOC District Director Michael Baldonado said:  “How do you manage the culture clash — across generations, race and ethnicity, you name it — in a workplace that gets more diverse every day?  I think it’s critical to try to put yourself into the shoes of the other person and take all complaints of discrimination seriously.  Together we can try to defuse tensions and prevent situations from developing into discrimination and harassment.”

Well said.

The Kroger Co. has agreed to settle a class action race discrimination lawsuit for $16 million.

The lawsuit alleged that Kroger discriminated against African-American employees in Alabama, Georgia, Kentucky, Ohio, Tennessee and Texas in promotions and pay.  The plaintiffs also alleged that they were subjected to racial harassment.

In addition to the $16 million, a proposed consent decree would require Kroger to:

• establish minimum qualifications for all management positions 
• create a pay rate monitoring system that would allow store manager decisions to be overturned if unfair
• provide an annual report, including salary and promotion data, to the plaintiffs’ law firm

Kroger sent a letter to its employees that said:  “The plaintiffs who initiated this lawsuit seven years ago obviously felt strongly that the company was not treating them fairly or respectfully.  No one in our company should feel this way.”  The company added:  “We have taken steps over the past several years to build an inclusive culture that demonstrates our commitment to all associates.”  Among other things, the company said it has hired a chief diversity officer and created cultural councils to help promote inclusiveness.

As reported previously here on the Blawg, last year was a record for race harassment cases.  Unfortunately, that trend shows no signs of abating.

In the latest case, Conectiv Energy and three of its subcontractors agreed to pay $1.65 million to settle discrimination claims brought by four African-American employees who alleged they were subjected to egregious racial harassment, including racial slurs, KKK graffiti and nooses hanging in the workplace.

According to the EEOC, the harassment included:

• a life-size noose that hung from a beam in the workplace for more than ten days;
• repeated use of the “N-word” and other racially offensive comments; and
• racist graffiti in work areas, including statements professing hatred for African-Americans and love for the KKK.

In addition to the payments, the companies agreed to four-year consent decrees that enjoin them from engaging in racial harassment and retaliation and that require comprehensive anti-discrimination training, the posting of notices describing the settlement and reporting future complaints of harassment to the EEOC for monitoring.

The lesson?  In the words of EEOC District Director Marie Tomasso:  “Employers risk intervention by the EEOC when supervisors ignore racially offensive working conditions and fail to take prompt and effective remedial action to stop it.”

What should employers do?

Enforce EEO Policies and Investigate Claims.  As this and other disturbingly similar cases we’ve discussed illustrate, failing to adhere to anti-discrimination and anti-harassment policies can have drastic consequences.  Investigate all claims of discrimination fairly and thoroughly and take appropriate disciplinary action promptly and consistently.

Embrace Diversity.  As discussed in one of our Questions of the Week, diversity training alone does virtually nothing to improve workforce diversity.  Experts recommend a variety of mechanisms to supplement diversity training, including:  (1) accountability at the top; (2) mentorships; (3) creating a diversity point person or task force; and (4) recruiting from a wide variety of sources (e.g., minority colleges).  Diversity is far more than a feel-good program.  It’s an absolute business necessity.  Companies that start taking steps to build a diverse workforce will be ahead of the pack as the talent crunch continues to intensify.

A federal judge has approved a $24 million race discrimination settlement between Walgreen Co. and more than 10,000 of its African-American employees.

The settlement resolves a March 2007 lawsuit in which the EEOC alleged that the nation’s largest drugstore chain discriminated against African-American employees by making store assignments and denying promotions on the basis of race.

The settlement mandates comprehensive injunctive relief, including extensive training and a requirement that the company retain an external consultant to conduct an audit of the company’s employment practices.

EEOC General Counsel Ronald Cooper said the case is “a good example of the commission’s renewed emphasis on class and systemic litigation and furthers the agency’s E-RACE Initiative, which is designed to address major issues of race and color discrimination.”

Walgreen’s made no admission of liability and says that it voluntarily entered into the settlement “because the actions it has agreed to undertake underscore its strong commitment to diversity and equal opportunity.”

In a case that offers valuable lessons for employers, a federal court upheld a $1.4 million jury verdict awarded to an African-American supermarket employee who was denied a promotion to a management job.

The Facts

John O’Quinn worked for Raley’s Supermarkets in California.  After more than 30 years without a promotion, he applied for a customer service manager position.  He testified that the job was his “lifelong dream.”  He passed a written manager’s exam required by the company.  He volunteered to take a finance course during his vacation to boost skills needed for the position.

O’Quinn went through several rounds of interviews but ultimately was rejected.  The all-white interview panel awarded management positions to four white employees instead.

O’Quinn eventually resigned because he “felt his career was going nowhere” and then sued the company.

The Result

The jury awarded O’Quinn $455,500 in compensatory damages and $900,000 in punitive damages.

What was the tipping point in the case that led the jury to award significant damages?  More than anything else, it appeared to be the company’s distinct lack of diversity at the management level.  In its decision to uphold the verdict, the court repeatedly referenced the all-white interview panel, the all-white pool of successful candidates and the all-white store management.

As the court stated:  The evidence adduced at trial established that [O'Quinn] worked for [Raley's] for decades, that [he] was not promoted despite evidence of his qualifications (including passing the manager’s exam), that only white employees were promoted to the positions [he] sought, and that [Raley's] lacked any African-American store directors.  Given the above, the jury’s conclusion that [Raley's] acted with malice, fraud, or oppression is a reasonable conclusion . . . .

The Lessons

Companies that lack diversity at the management level operate at their own peril.  Besides being sitting ducks for discrimination lawsuits, they are far more likely to make bad decisions.  Studies show that diversity among decision-makers leads to a greater variety of viewpoints, a more complete analysis of relevant factors and, ultimately, better decisions.

On a more granular level, the “panel” approach used by the company in this case can be a useful tool.  However, if it’s not diverse and not conducted properly it actually increases the chances of a successful lawsuit.

In short, diversity is not only the right thing to do — it’s an absolute business necessity.

As discussed previously here on the Blawg, racial harassment claims hit an all-time high last year.  Unfortunately, that pattern shows no signs of slowing anytime soon.

Earlier this week, the EEOC announced a $1.9 settlement in a race and national origin harassment filed on behalf of African-American and Hispanic workers against Allied Aviation Services.  In allegations disturbingly familiar to other recent cases, the EEOC asserted that the employees were subjected to nooses, swastikas, racial slurs, graffiti and a race-based “hit list” posted in the workplace.

Former Dallas Cowboys running back Eric Mitchel started the lawsuit after finding his name and the names of other black employees on the hit list.  Mitchel said he helped organize the suit despite threats that “men in white hooded robes” would visit his house and warnings from a manager that he should quit. 

“It was, in layman’s terms, a modern-day lynching,” said Mitchel.  ”White employees would pass around KKK membership cards, they would call black people ‘boy’ and ‘coon,’ and they had been doing it so long that no one challenged them.  Those who did were threatened they’d be killed.”

Francisco Ochoa, a Hispanic employee, alleged that when he met with a supervisor to discuss his concerns he was shocked to see himself depicted in a racially offensive cartoon displayed on the manager’s desk.  According to the suit, Mr. Ochoa was so traumatized by the incident that he was hospitalized for two weeks as a direct result.

Allegations from other employees included threats that employees should be sent “back to Africa” and frequent use of racial epithets, including the N-word.  Employees alleged that the harassment was “commonplace” and often occurred “in plain sight.”

The EEOC investigated the allegations and concluded that the perpetrators of the alleged incidents had received virtually no discipline.  For example, it found that one employee who was convicted of a hate crime after drawing swastikas in the workplace was merely transferred but not fired.

“The harassment that was involved was egregious, but we see cases like this all the time,” said EEOC attorney Suzanne Anderson. “The thing that stood out in this case was the fact that management took no action.” 

Allied Aviation vehemently denied any wrongdoing.  “We disagree with the whole characterization of the case,” said company owner Robert Rose.  “It is grossly unfair.”  He maintains that when senior management was made aware of the alleged harassment it “took steps to ensure it would be properly investigated.”  Despite the denials of wrongdoing, the company ultimately agreed to settle the suit so that “all parties could move forward and put the matter to rest.”

The $1.9 million will be divided among a group of fifteen African-American and Hispanic employees, six of whom still work for the company.  The company must also provide diversity training to all employees and post a notice in each of its facilities.

“It is appalling that racial harassment remains a persistent problem at some job sites across the country in the 21st century, more than 40 years after passage of the landmark Civil Rights Act,” said EEOC Chair Naomi Earp.  “Employers must be more vigilant and make clear that race discrimination, whether verbal or behavioral, has no place in the contemporary workplace.”

Postscript:  To help reverse the growth in race harassment claims, the EEOC has launched an initiative called E-RACE (Eradicating Racism And Colorism from Employment), a national outreach, education and enforcement campaign.  To read more, click here.

More on the infamous “dog-food-in-the-spaghetti-prank-gone-bad” case . . .

Last year, a jury awarded Tennie Pierce, a black L.A. firefighter, $1.43 million for racial harassment.  The centerpiece of the allegations was a “prank” in which a co-worker slipped dog food into Pierce’s spaghetti dinner.

Following the incident, the L.A.F.D. promptly suspended two captains, Chris Burton and John Tohill.  Burton and Tohill responded by filing their own suit, alleging that they were the victims of reverse discrimination.

The Facts

According to court records and newspaper accounts, here’s what seems to have transpired . . .

In October 2004, Tohill brought a can of dog food to work, intending to give it to Pierce as a “joke trophy” for winning various sports tournaments.  Pierce apparently referred to himself as “Big Dog” during the tournaments.

Unbeknownst to Tohill, firefighter Jorge Arevalo spotted the can on the counter and thought it would be funny to put some in Pierce’s spaghetti dinner.  Two bites into his meal, Pierce noticed that something tasted strange.  When he saw his co-workers were laughing, he asked if someone had put something in his food.  No one responded, although Arevalo offered to make him another plate.  Pierce stormed out of the room.

His co-workers were surprised by Pierce’s reaction.  Apparently, Pierce had a reputation as something of a prankster himself.  In fact, just two days earlier he had participated in a prank in which a co-worker was strapped down and doused with A1 sauce.  Photos surfaced of other questionable pranks involving Pierce, including one in which he can be seen smearing shaving cream around a co-worker’s groin area and another in which he is laughing at a colleague wrapped in a sheet on which someone had written “Oy Vey!  I’m Gay!”

Arevalo apologized to Pierce and offered to eat some of the dog food himself.  Pierce declined his invitation.

Pierce says he was then called into a meeting with Burton and Tohill.  According to Pierce, they admitted they knew the dog food was on the plate but said that Pierce wasn’t supposed to eat it.  Pierce says they apologized.  Burton and Tohill say that Pierce demanded that the incident be “kept quiet” and they obliged.

A black co-worker of Pierce’s testified that he and Pierce discussed the incident that night.  He says they both concluded that the incident “didn’t have to do with race.”  Pierce says he doesn’t recall using those exact words.

The city claimed that the two captains were present when the prank occurred and actively participated in a cover-up.  The captains deny acover-up and insist that the city bowed to political pressure and unfairly made them scapegoats.  They contend that they took immediate action to address the matter and that the city failed to conduct a fair investigation before suspending them.  They also pointed to the fact that Arevalo — who is Latino — was suspended for only six days, compared to 30 for Burton and 24 for Tohill.

The Result

The jury sided with the captains, awarding them a total of $1.6 million — $170,000 more than Pierce received in the original lawsuit.  

Interestingly, the captains were ready to settle the case for $250,000 apiece early on but the city balked.

The Lessons

There are several:

1. Employers must have policies and procedures in place to ensure full and fair investigations of all claims of harassment and discrimination.  Check out our handy investigation checklist to make sure you get all the facts and make the right decisions.
2. Discrimination is discrimination — favoring minority employees over non-minority employees can result in reverse discrimination claims.
3. Think long and hard before taking any case to trial.  Settlement may be your best option, particularly if you consider the prospect of additional attorneys’ fees and potentially negative PR.

A federal court awarded a black former municipal employee $120,000 in damages after he proved that his firing for setting off a firecracker in the workplace was discriminatory.

Ronald Madden was fired in 2006 by the Chattanooga Public Works Department for setting off a firecracker at work.  Company representatives testified that they were unaware of any similar incidents at the time of Madden’s firing and that they would have taken the same action against any other employee who had done the same thing.

However, Madden and several of his co-workers provided evidence that white employees had set off firecrackers at least twice in the past without incurring any discipline.  In one incident, the employee — who had the same supervisor as Madden — threw firecrackers at work less than a year before Madden’s firing.  Unlike Madden, the only response to that employee’s conduct was an informal admonition that he should “knock off the horseplay.”  There was also evidence that the supervisor himself had set off firecrackers at work and was never disciplined.

In a separate incident, a white employee threw a firecracker into a city truck carrying black employees, causing some of the employees to jump out of the truck while it was still moving.  Again, no discipline was issued and the situation was treated as “humorous and not one warranting discipline.”

Despite the company’s protestations that it was unaware of the prior incidents, the court found that setting off firecrackers at work was “not uncommon” and that “there was no effort to conceal their use.”  Based on the company’s disparate treatment of Madden and its willful ignorance of prior incidents, the court found the city liable for race discrimination under Title VII and awarded Madden $52,765 in front pay, $36,935 in back pay and $30,300 for emotional distress.

The lesson?  Prior to any termination, conduct an investigation to ensure that the discipline issued (1) fits the “crime” and (2) is consistent with prior discipline (or lack thereof).

The EEOC and Lockheed Martin have settled a race discrimination and retaliation claim for $2.5 million, a record for a race case involving a single claimant.

Charles Daniels, a Navy veteran formerly employed as an aviation electrician for Lockheed Martin, alleged that he was subjected to threats and racial epithets and was laid off in retaliation for his complaint.

Among other things, Daniels claimed that co-workers repeatedly called him the “N-word” and threatened to make him ”disappear” with the assistance of the Aryan Nation, a white supremacist group.  He also alleged that a co-worker said:  ”We should do to Blacks what Hitler did to Jews.”

Daniels says that after he complained to supervisors the harassment increased and he received more death threats.  He alleges that company officials told him they would “blackball” him in the industry and ultimately laid him off in retaliation for his claims.

According to Lockheed, the conduct was isolated to “a small number of first-line employees in a small, single operating unit of the company.”  It says that when management was made aware of the allegations, it “conducted investigations and took the appropriate remedial actions based on the facts presented at that time.” 

As part of the settlement, the company agreed to terminate the alleged harassers, to make policy changes to deter future discrimination and to mandate extensive anti-harassment training.

Daniels’ attorney, Carl Varady, says that the case demonstrates the risks inherent when a company relies exclusively on its own internal investigation in matters of a serious nature.  According to Varady, such companies are more interested in covering up the facts rather than conducting a true investigation and taking appropriate action.

The Lesson?  In significant matters, consider having a neutral external person (e.g, an outside attorney) conduct the investigation.  That investment could help ensure that you get all the facts, make the right decision and maybe even avoid a multi-million-dollar verdict.