Corporate America's black eye: the latest rash of corporate misconduct has triggered new battles over the corrosive effects of bias in the American workplace.

The latest rash of corporate misconduct has triggered new battles over the corrosive effects of bias in the American workplace

Just Take Your Pick. In The Last Several months, lofty multimillion-dollar corporations such as Stores Inc., Mitsubishi and Morgan Stanley have all become synonymous with the racism often expressed among the corporate elite in America. Whether it's racial slurs coming via e-mail in a business office, being passed over for a deserved promotion or having high-ranking executives refer to you as a "black jelly bean" in a backdoor meeting, it's clear the glass ceiling is alive and well in corporate America. Only in the case of African Americans in the business arena today, the glass ceiling is increasingly more like a concrete wall.

Never has corporate America's reliance on monetary settlements as a form of crisis management been more in vogue than in recent years. And as blacks have sought legal recourse in growing numbers--with complaints about hiring practices, promotions or wages against the corporations they work for--millions have been spent in the last several months alone by corporations, either to refute racism or, when all else fails, allegations to make huge settlements.

Not since the height of the civil rights movement in the 1960s have there been so many race, sex and age discrimination lawsuits, says Gilbert F. Casellas, chairman of the Equal Employment Opportunity Commission. The organization is often the first step toward filing a racial discrimination suit and can decide the merit of particular cases, in some instances seeking out settlements as opposed to jury cases. However, Casellas says cases are now more often directed toward Fortune 500 companies to enforce or establish many of the victories from the civil rights era. According to a recent survey, the number of companies with employees in litigation against them rose to 63% in 1995, a 10% increase over 1993. The most common charge was race discrimination. Last year alone, private sector employees filed more than 77,000 complaints of discrimination with the EEOC--a decrease from the 91,000 cases logged in 1994 but still an increase over the 62,000 cases reported in 1990. Following are some of the more recent high-profile cases:

Avis: Avis, the nation's second-largest rental car company, and New Hanover Rent-A-Car were named in a class-action suit filed in November in the U.S. District Court in Wilmington, Delaware, by three black women who say they were denied rentals. Avis severed ties with the franchise owner, John Dalton, amid charges Avis executives had been aware of racial bias complaints against Dalton's franchise for several years. An internal investigation by Avis found an additional 26 complaints of racial discrimination logged against Dalton's franchise over eight years. According to lawsuit depositions, former employees say they were trained on how to avoid renting cars to blacks.

Mitsubishi Motor Manufacturing of America: Mitsubishi recently settled a class-action sexual harassment case with the EEOC for $150 million. Twenty-nine women filed separate lawsuits making similar claims of verbal and physical harassment. A separate settlement was made with the EEOC on behalf of African Americans who charged they were treated in a similar manner.

R.R. Donnelly & Sons Co.: A $500 million suit was filed against the nation's largest commercial printer last November. The suit charged that hundreds of black workers were laid off during a plant closing while white employees were transferred to other plants.

Circuit City: In Richmond, Virginia, a jury awarded almost $300,000 to two black employees who charged they were passed over for promotions because of their race. Another suit is pending.

Publix Supermarkets Inc.: A class-action suit was brought against this organization in 1991, covering more than 100,000 women who accused the company of systematically denying them promotions, raises and preferred assignments. The case was settled for $81.5 million in January. There was also a $3.5 million settlement with the EEOC following charges that the company had similarly denied such opportunities to African Americans.

Denny's Restaurants: Its parent company, Flagstar, settled two class-action lawsuits in 1994 totaling $46 million. The lawsuits were brought by several Secret Service agents and a group of students who said they received discriminatory services at a Denny's restaurant. The chain paid $54 million to nearly 300,000 customers to settle the lawsuits and committed $1 billion to minority hiring.

Texaco: In 1994, the conglomerate was accused of racial discrimination by two African American employees. Texaco vigorously fought the lawsuit, which was later joined by hundreds of other African American employees, eventually evolving into a class-action suit. It wasn't until the discovery of a meeting--secretly taped by a senior executive--in which racial slurs were allegedly used that the suit came to a head. Following threats of a nationwide boycott, Texaco Chairman Peter Bijur agreed to pay the plaintiffs $176.1 million as well as award an 11% salary increase to current employees who were part of the class-action suit. Texaco subsequently announced plans to implement strong diversity programs within the company as well as increase its relationship with other African American businesses.

Pressure and public scrutiny can be effective tools. But a little financial pressure never hurts when seeking to resolve such a biased incident. In addition to Texaco's stocks becoming vulnerable because of boycott threats, Texaco had added incentive to find a quick resolution. New York State Comptroller H. Carl McCall fired off a letter to Bijur shortly after the story broke asking for a full condemnation of the remarks. But McCall had an ace in the hole reserved to few. As the sole trustee of the $75 billion New York State Retirement Fund--which owns 1.2 million shares of Texaco--he indicated he'd have no problem selling the shares if the stocks lost money as the result of a boycott and if a settlement wasn't made quickly.

Casellas sees a number of reasons for the increase in complaints, including a heightened awareness by the populace of the wage gap between minorities and whites and a public mood fueled by anti-Affirmative Action rhetoric. But most significant was the strengthening of the Civil Rights Act of 1991. Before the 1991 change, victims of racial discrimination could only regain their old jobs with back pay. Now the law allows a litigant to sue for money damages as well as attorney fees, a factor which gives attorneys additional incentive to take on such cases.

"The court has continually been relied upon for the ultimate resolution of disputes about the obligation of private entities like corporations to not treat people in a discriminatory way," says Alvin Thornton, chairman of the political science department at Howard University in Washington D.C. "As long as women and blacks are disproportionately excluded, there will always be litigation of this nature."

But what are the long-lasting effects of these recent cases? Is it just a matter of paying off a few while the corporate behavior as a whole remains the same, or will their impact reverberate into changing corporate culture as it relates to race?

Different companies have handled their "predicaments" differently. Since the Denny's case was settled, Flagstar has gone into a public relations blitz announcing a series of new initiatives aimed at increasing its number of minority franchisees. In January, the corporation announced it would contribute $100,000 to eight civil rights organizations and $625,000 to the United Negro College Fund.

At Texaco, Bijur announced the company would modify the way it handles recruitment, hiring, retention and career development of minorities its contractual efforts with more minority companies.

Mitsubishi agreed to institute new economic programs and policies over the next five years, at a cost of about $200 million, to improve minority opportunities, including pay raises and new car dealerships, a part of an agreement with the Rev. Jesse Jackson to call off a nationwide boycott of the organization.

"We want corporations to stop the formula of targeting us for consumption and then boycotting us--a humiliating imbalance of trade and limited jobs and economic development opportunities," Jackson says. He sees measures taken by Texaco, Mitsubishi and others as an important first step. But Jackson believes the most important leverage is how and with whom the African American community spends its money. "We must become more highly disciplined in the use of our dollars as a leverage to bring about economic change."

It's not a new refrain. But Jackson added something new and potentially dynamic to the mix when he recently announced the formation of the Rainbow/PUSH Wall Street Project. According to Jackson, the office will monitor the top 100 corporations where blacks consume in the greatest numbers to determine if the company in question reciprocates back into the black community.

Jackson says the companies will be judged by creating a measuring system to rate them based on the diversity and effectiveness of their board of advisors, employment patterns, investment portfolios, money managers and their contract practices, among other indicators. For added incentive, Jackson has inferred he might publish details on how well 100 of the largest corporations treat minorities. "There are product lines where African Americans [consume] 50%-75% of the products. In these instances, we are the majority," says Jackson. "So many corporations depend upon our appetites, upon our membership, upon our pension moneys and upon our labor. But we've never effectively harnessed our economic strength. Now we must do that in the private sector."

Among the cases Jackson says his new organization will be monitoring is the suit brought by two African American employees against Morgan Stanley & Co. The suit alleges white co-workers traded racist "jokes" via the company's in-house computer electronic mail. The prominence of this case and others like it against Fortune 500 firms highlights a fundamental problem within the business industry. McCall says they put pressure on shareholders who "are often in denial that racism exists in corporate America."

But as the population of the country changes and more people of color enter the workforce, companies will have to adjust how they handle these employees to function in the global marketplace. Corporate America "is not representative of our country in terms of its face," says Thornton. While the belief among most diversity experts is that corporations can't force employees to change their personal attitudes and beliefs, strict corporate polices must be enacted to mandate behavior at the workplace. "If the corporation is going to compete internationally," adds Thornton, "it's going to have to deal with the international prejudice that still manifests itself right in its own boardrooms."