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Texaco, Inc.
A Racial Discrimination Suit
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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.”
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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?
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Texaco, Inc.Racial Discrimination Suit
The B Case
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November 4th, 1996
•The New York Times story breaks.
• Independent investigation: Texaco hired Michael Armstrong,
Manhattan lawyer.
• Initial Texaco press release.
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November 4th, 1996
•Bijur’s personally authored letter to employees.
•Broadcast message via satellite to employees.
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Behind the Scenes
•Bijur meets with: Board of directors Shareholder groups Influential individuals
•Bijur makes himself available to press.
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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.
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Subsequent Events
•December 1996 Texaco releases Work Force
Diversity Plan. Jackson drops boycott.
•Summer of 1997 Digitized tapes proved
transcripts incorrect.
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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
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Texaco, Inc.Racial Discrimination Suit
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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.
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