copyright ©2009 pearson education, inc. publishing as prentice hall 5-1 texaco, inc. a racial...

Copyright ©2009 Pearson Education, Inc.

Publishing as Prentice Hall 5-1

Texaco, Inc.

A Racial Discrimination Suit



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.”



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.



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.



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.



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.



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.



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.



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.



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?



Texaco, Inc.Racial Discrimination Suit

The B Case



November 4th, 1996

•The New York Times story breaks.

• Independent investigation: Texaco hired Michael Armstrong,

Manhattan lawyer.

• Initial Texaco press release.



November 4th, 1996

•Bijur’s personally authored letter to employees.

•Broadcast message via satellite to employees.



Behind the Scenes

•Bijur meets with: Board of directors Shareholder groups Influential individuals

•Bijur makes himself available to press.



Subsequent Events

•November 6th, 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.



Subsequent Events

•December 1996 Texaco releases Work Force

Diversity Plan. Jackson drops boycott.

•Summer of 1997 Digitized tapes proved

transcripts incorrect.



Time Line of Events

Nov 4thNYTimesstory breaks

Nov 4thIndependentInvestigation

Nov 4thInitialPress

Release

Nov 4thBijur’sLetter

Nov 4thSatellite

Message to Employees

Nov 5thBijur meets

Stakeholders

Nov 5thBijur meets

Press

Nov 6thSix step plan

Nov 12thBijur meets

Jackson

Nov 15thRob v. Tex

Settled&

Bijur addresses employees

Dec 1996Work Force

Diversity Plan & Jackson

Drops boycott

Summerof 1997

DigitizedTapesShow

TranscriptsIncorrect



Texaco, Inc.Racial Discrimination Suit



CreditsA 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.

Power Point to accompany Opportunities and Challenges of Workplace Diversity: Theory, Cases, and Exercises

by Kathryn A. Cañas and Harris Sondak.

copyright ©2009 pearson education, inc. publishing as prentice hall 5-1 texaco, inc. a racial...

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