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Avis Pays $3

December 23, 1997 GMT

Avis Pays $3.3 Million To Settle Portion of Lawsuit Filed by Would-Be Black Customers Who Accused N.C. Avis Franchisee of Discrimination

Three black motorists sued Avis and New Hanover Rent-A-Car last year after they said the company failed to discipline New Hanover dealer John Dalton despite dozens of complaints against him to Avis customer-service operators.

Affidavits by former New Hanover managers claim Dalton’s rental car outlets placed additional requirements on blacks in order to justify denying them rentals. Such requirements included higher credit-card maximums and proof of employment, the affidavits said.


Both Dalton and Avis, based in Garden City, N.Y., have denied discriminating against blacks.

Avis admits no wrongdoing and does not condone any actions by Wilmington-based New Hanover Rent-A-Car, according to the out-of-court settlement announced late Monday afternoon by Avis and plaintiffs’ attorneys.

According to the tentative settlement, Avis will contribute $1.85 million to a settlement fund for any black customers who said they were denied rentals by the Wilmington-based dealer on account of their race.

The company also would pay an additional $1.43 million for legal and administrative costs associated with processing claims for a class-action settlement, said John Relman, an attorney for the plaintiffs.

Since the initial lawsuit, the number of plaintiffs named in the lawsuit have increased to 14. And more than 100 people have signed affidavits saying they were discriminated against at one of Dalton’s five Avis outlets in North Carolina and South Carolina, Relman said.

The out-of-court settlement must be approved by U.S. District Court in Wilmington, where the lawsuit was filed by three black motorists in May 1996. If approved, the plaintiffs would end its legal action against Avis.

``We’re very pleased with the settlement,″ Relman said Monday night in a telephone interview. ``We have done the eight thing and we think the settlement is appropriate.″

But the lawsuit will continue against New Hanover Rent-A-Car because Relman said they are not satisfied with Dalton’s reponse to the lawsuit.

``We had had concerns about Avis, but we think that they have addressed those problems,″ said Relman with the Washington Lawyers’ Committee for Civil Rights and Urban Affairs. ``... But in the New Hanover Rent-A-Car case there has been done nothing to change our concerns against it.″


Relman said his plaintiffs agreed to a settlement with Avis because ``the evidence does not show a pattern or practice of discrimination by Avis at corporate or independent licensee locations across the country.″

No date has been set for the lawsuit against New Hanover Rent-A-Car to go to trial, although Relman said it could begin within the next few months.

An Avis spokesman did not return a telephone call Monday evening. But Craig Hoenshell, Avis chairman and chief executive officer, said in the release announcing the settlement that company managers have been working to reinforce Avis’ commitment to non-discrimination at all levels.

``Our new management team has moved aggressively to enforce our policy of `zero tolerance’ of discrimination and to promote diversity and inclusiveness among Avis’ workforce,″ Hoenshell said. ``... We are pleased to be putting this litigation behind us.″

Dalton’s franchise runs offices in Wilmington, Greenville, New Bern and Jacksonville and in Florence, S.C.

The allegations became public in November 1996 when the lawyers’ group filed documents to expand legal action by the three motorists to a class-action lawsuit.

Details on how the money would be divided among the customers won’t be decided upon until legal action against New Hanover Rent-A-Car is completed.

Earlier this year, allegations surfaced that Avis knew about the discrimination complaints but nothing to resolved the problems.

An Avis internal investigation in December 1996 blamed two corporate attorneys for knowing about racial bias complaints in 1992 but deciding not to respond.

But a former employee said in a statement filed in federal court that Joseph Vittoria _ Avis chief executive officer until his retirement in February _ attended meetings at the Avis reservation center in Oklahoma in which complaints against Dalton were discussed.

Another former employee said in a sworn declaration that sales agents at the Avis reservation center were told to reject new corporate accounts for businesses run by ultra-Orthodox Jews.