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Texaco Tapes Propel $176 Million Settlement of Race Bias Case

November 16, 1996 GMT

WASHINGTON (AP) _ The lawsuit was filed more than two years ago, but it took Texaco Corp. just 11 days to settle race discrimination claims after tape recordings of executives belittling black employees were played coast to coast.

The deal, which still must be approved by a court, will cost the oil giant $176.1 million, making it the largest race discrimination settlement in U.S. history.

``I have committed myself _ and the entire management team of this company _ to the elimination of any trace of discrimination in Texaco,″ Chairman and Chief Executive Peter I. Bijur said in a statement Friday after negotiators reached the agreement.

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Texaco agreed to pay $115 million to about 1,400 current and former employees and to give black employees 10 percent raises on Jan. 1.

The company also will spend $35 million on an independent task force with wide-reaching power to help open opportunities for black workers, monitor racial discrimination and develop diversity and sensitivity training.

The task force, which will operate for five years with its own staff, will determine whether to set numerical hiring or promotion goals and, if so, how to monitor them. Its decisions can be overturned only in court.

``No longer will we hear the excuse, `We just didn’t know,‴ said Michael D. Hausfeld, one of the plaintiffs’ attorneys.

He said establishment of a ``truly independent″ task force was the greatest sticking point among negotiators, who had been talking intensely since the tape surfaced nearly two weeks ago.

``This is an historic settlement and I am so proud to be a part of it,″ said plaintiff Bari-Ellen Roberts, 44, a senior financial analyst in Stamford, Conn. ``This has been a hard battle.″

The lawsuit, filed in 1994, claimed a ``good old boy″ network at Texaco reserved the best promotions and biggest raises for whites. Former and current black employees said they were called ``orangutans″ and ``porch monkeys″ to their faces. One was invited to join in a round of golf _ as a caddy.

The pressure on Texaco mounted dramatically last week after plaintiffs produced a tape of executives using racial slurs, mocking the black cultural festival Kwanzaa and plotting to hide or shred documents sought by the plaintiffs.

The recordings were made by a Texaco executive who gave the tapes to the plaintiffs after he lost his job in a downsizing. Company investigators said an electronic enhancement found that executives did not use the word ``niggers,″ as it had appeared, but the company said the tone of the conversation was still troubling.

The tapes focused public attention on the issue, Hausfeld told reporters. Without them, he added, ``I don’t think I’d be standing here right now.″

Texaco still faces a grand jury investigation into whether documents actually were destroyed. The company, based in White Plains, N.Y., has not disputed that executives talked about hiding evidence.

Texaco apologized for the tapes and suspended two executives, but civil rights activist Jesse Jackson called for a boycott to begin today and had demonstrations planned for several cities.

It was unclear if the protest would go forward. Jackson said the settlement was a good first step, but that Texaco must also commit itself to selling station franchises to blacks and to hire blacks for financial management positions.

``The mission is not complete,″ he said.

NAACP President Kweisi Mfume, who had threatened to urge Texaco stockholders to divest, said his organization will negotiate with the company over the next two weeks on other economic issues, and is prepared to call for a stock divestiture if it can’t reach an agreement.

``We’re prepared to do it if we have to,″ Mfume said. ``We believe it is much more swift. It creates much more economic pain than a boycott.″

Bijur said in his statement to employees that Texaco would indeed work to increase the number of Texaco stations owned by minorities and women and to increase business with minority companies.

``And we will act in all of these areas swiftly,″ he said, ``with a true sense of urgency in our mission.″