Prior to founding Mehri & Skalet, Cyrus Mehri was co-lead counsel on what was at the time the largest employment race discrimination case in history. Cyrus represented a class of African-Americans employed by the oil giant Texaco Inc. in litigation alleging racially discriminatory employment practices. The plaintiffs alleged that while working at Texaco they hit a “glass ceiling” which prevented them from rising through the ranks to upper level management and supervisory roles. The suit also alleged that Texaco failed to compensate African-American employees at comparable levels to their white counterparts when holding similar positions.
Through thorough investigation of the business practices and promotions procedures at Texaco, plaintiffs were also able to determine that the company kept an undisclosed list of employees with ‘high potential for advancement’ which was used in making decisions regarding promotions. No African-American employees were included on this list that virtually insured advancement.
Through the course of the investigation plaintiffs and their attorneys believed that Texaco was actively attempting to withhold documents that would be detrimental to their defense. These suspicions were vindicated when secret tape recordings emerged of Texaco executives discussing withholding sensitive human resource documents and expressing the racially insensitive attitudes that were prevalent in their board room. These tapes were eventually released to the general public in November 1996. The release of the tapes led to a national scandal; provoked the company’s chairman to publicly denounce the attitudes expressed, and prompted settlement negotiations to resolve the lawsuit.
The settlement provided for the creation of a Task Force, chaired by Deval Patrick, to evaluate Texaco’s human resource policies and advised the company as to what policies needed to be corrected to ensure an equitable workplace.
Among the changes implemented by the Task Force was the creation and implementation of a company-wide diversity training program and a mentoring program that can be taken advantage of by all employees. Procedures regarding promotions and employee development were also significantly improved.
In addition to these, and other, initial changes the Task Force was charged with evaluating the results of the new policies and practices, reporting their findings yearly and correcting any issues that emerged.
The financial settlement in this case was in the amount of $172 million. Of this total sum, $115 million was placed into a class fund which was distributed among the approximately 1,500 current and former Texaco employees that made up the class.
Additionally all current Texaco employees who were class members received a one-time salary increase of 10%, this provided an additional approximately $26.1 million to the class.
The remainder of the settlement went to fund the operational budget of the Task Force which was appointed to implement the necessary programmatic changes to Texaco policies, and to compensate the class representatives and attorneys for their work.
Texaco Settles Race Bias Suit for $176 Million
Los Angeles Times, November 16, 1996
By Thomas S. Mulligan and Chris Kraul
Roberts vs. Texaco: A True Story of Race and Corporate America
By Bari-ellen Roberts and Jack E. White
Harper Perennial, March 1999