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Coca-Cola settles race suit
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November 16, 2000: 4:52 p.m. ET
Soft drink maker agrees to pay $192.5M to settle racial discrimination lawsuit
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NEW YORK (CNNfn) - Coca-Cola Co. paid out $192.5 million Thursday and also agreed to a wide range of new programs and reforms to settle a racial discrimination lawsuit brought by black employees.
The amount, described by the plaintiffs as the largest ever in a race discrimination class action suit, includes $113 million in cash, $43.5 million to adjust salaries and $36 million for oversight of the company's employment practices. Coke also will pay $20 million in attorneys' fees.
The soft drink maker also agreed to have its employment practices reviewed by an outside group.
 "This settlement sets a new standard for corporate diversity," said plaintiff's co-lead counsel Cyrus Mehri, in a statement. "In short, the 'World of Coke' will be going through a 'World of Change.'"
Mehri said he was thrilled with the settlement. (363K WAV or 363K AIFF)
In a memo to employees worldwide, Coca-Cola Chairman and CEO Doug Daft said the settlement marked the closing of a "painful chapter" in the company's history.
"We will not rest until we have reclaimed our position as the best of the best in these matters and restored the confidence of every person who touches The Coca-Cola Company," Daft wrote. "Settlement of this suit is an essential step in attaining that goal, and other measures will quickly follow."
As part of its agreed changes, a seven-member task force will examine the company to ensure fair hiring, pay and other human resources practices over four years. The task force will make recommendations and see that they are carried out.
Coca-Cola (KO: Research, Estimates) retains the option to protest the task force recommendations in court if the company contends they are not financially or technically feasible.
The settlement was approved by U.S. District Judge Richard Story, in whose court the suit was filed in April 1999. Details of the settlement will be sent to about 2,000 class members beginning next month.
The company said it will take a $188 million one-time, fourth-quarter charge, covering all payments and initiatives involved in the settlement.
Scott Wilkins, an analyst with BofA Montgomery who follows Coke, said the settlement was "within the expected range" for investors.
"This event was pretty much incorporated into Coke's stock price," Wilkins said. "That's why we've seen a muted response in the stock."
Shares of Coca-Cola rose 62 cents to $61.94 in afternoon trading Thursday on the New York Stock Exchange.
 The lawsuit claimed Coca-Cola discriminated against black salaried employees in pay, promotions and evaluations. The company denied the claims.
The settlement covers salaried black employees in the United States who worked for Coke between April 22, 1995 and June 14, 2000.
A toll-free telephone line will be established to receive complaints 24 hours a day. A newly created ombudsman will investigate all complaints, report to Daft and give periodic reviews to the task force.
The task force is modeled after a similar group established four years ago in the settlement of a discrimination lawsuit against Texaco. Coca-Cola's will include former government officials in labor and civil rights, professors, lawyers and diversity consultants.
--from staff and wire reports 
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Coca-Cola
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