Transcript No Slide Title

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.
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 4th
Nov 4th
Initial
NYTimes
Press
story breaks Release
Nov 4th
Independent
Investigation
Nov 4th
Bijur’s
Letter
Nov 4th
Satellite
Message to
Employees
Nov 5th
Bijur meets
Press
Nov 5th
Bijur meets
Stakeholders
Nov 12th
Bijur meets
Jackson
Nov 6th
Six step plan
Nov 15th
Rob v. Tex
Settled
&
Bijur
addresses
employees
Dec 1996
Work Force
Diversity
Plan & Jackson
Drops boycott
Summer
of 1997
Digitized
Tapes
Show
Transcripts
Incorrect
Texaco, Inc.
Racial Discrimination Suit