Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 5-1 Texaco, Inc. A Racial Discrimination Suit

Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 5-2 The Situation Peter Bijur, Texaco CEO. Roberts v. Texaco, Inc.  Pending lawsuit from  $520 million filed by six employees on behalf of almost 1,500 other minority workers.  Texaco “fostered a racially hostile environment.”

Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 5-3 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.

Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 5-4 Background On ABC’s Nightline, Bijur offered the following:  16.6% of its U.S. work force of 27,426 employees were minorities in  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.

Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 5-5 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.

Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 5-6 The Meeting Meeting participants - August 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.

Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 5-7 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.

Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 5-8 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.

Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 5-9 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.

Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 5-10 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?

Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 5-11 Texaco, Inc. Racial Discrimination Suit The B Case

Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 5-12 November 4th, 1996 The New York Times story breaks. Independent investigation:  Texaco hired Michael Armstrong, Manhattan lawyer. Initial Texaco press release.

Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 5-13 November 4th, 1996 Bijur’s personally authored letter to employees. Broadcast message via satellite to employees.

Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 5-14 Behind the Scenes Bijur meets with:  Board of directors  Shareholder groups  Influential individuals Bijur makes himself available to press.

Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 5-15 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.

Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 5-16 Subsequent Events December 1996  Texaco releases Work Force Diversity Plan.  Jackson drops boycott. Summer of 1997  Digitized tapes proved transcripts incorrect.

Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 5-17 Time Line of Events Nov 4th NYTimes story breaks Nov 4th Independent Investigation Nov 4th Initial Press Release Nov 4th Bijur’s Letter Nov 4th Satellite Message to Employees Nov 5th Bijur meets Stakeholders Nov 5th Bijur meets Press Nov 6th Six step plan Nov 12th Bijur meets Jackson 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

Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 5-18 Texaco, Inc. Racial Discrimination Suit

Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 5-19 Credits 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 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 5-20