Coke Settlement Brings Bias Responsibility To Board Level

Compiled ByMichael A. Verespej The record $192.5 million settlement by Coca-Cola Co. to settle a 21-month-old racial bias lawsuit isn't as important as the portion of the agreement that stipulates the board of directors of the world's largest soft-drink company will share responsibility with top management for ensuring there is equal employment opportunity for all throughout the company. Under the agreement, reached Nov. 16, the board is obligated to take into account the diversity record of senior managers in determining their pay. In addition, a seven-person task force -- three appointed by Coke, three by employees, and a chairman jointly selected by both sides -- will monitor Coke's diversity efforts over the next four years, recommend changes in employment practices, and make sure they are carried out. Coke can challenge the changes only if it believes the suggested changes are not financially or technically feasible. Coke -- which admitted no wrongdoing in settling the suit -- had been charged with discriminating against blacks in pay, promotions and performance evaluations. Under the terms of the agreement, the plaintiffs will receive $113 million -- or roughly $40,000 each. Another $43.5 million will be spent on salary adjustments. "Discrimination of any kind -- even if it is unintended, tolerated or simply overlooked - has no place at Coca-Cola Co.," said chairman and CEO Douglas Daft in a statement to employees. The settlement "is improving and making better whatever established business practices there were. Sometimes things happen in an unintentional fashion. I've made it very clear that can't happen anymore." The agreement, however, does not end all of Coca-Cola's legal troubles with race discrimination and sexual harassment. Still outstanding is a $1.5 billion lawsuit filed by four former workers who charge that Coke maintained racially biased hiring practices as well as a hostile work environment for blacks.