Food services company Sodexho Inc. agreed Wednesday to pay $80 million to settle a lawsuit brought by thousands of black employees who charged that they were routinely barred from promotions and segregated within the company.
The agreement, one of the biggest race-related job bias settlements in recent years, also includes detailed provisions for increasing diversity at the Gaithersburg, Md.-based company, including promotion incentives, monitoring and training.
The company said in a statement that it agreed to resolve the litigation in order to avoid protracting the case, which was set for jury selection Thursday in federal district court in Washington. It admitted no wrongdoing.
"This is an extremely positive result, both for the plaintiffs and for the company," said Kerry Scanlon, the lead attorney for the employees. "The opportunities that this settlement provides both for African-American employees and for the company are the best possible outcome."
In a statement, Sodexho's President and CEO Richard Macedonia said: "We are pleased this case has been resolved. ... We are a stronger and better organization as a result of this process."
The case was filed in March 2001 against the company's corporate predecessor, Sodexho Marriott Services, Inc., after midlevel black managers said they realized nearly all had been denied promotions into upper management, while less-qualified counterparts rose through the company.
The settlement will mean payouts to 10 lead plaintiffs and as many as 3,000 other black salaried workers who worked at the company between 1998 and 2004, according to the settlement decree.
The compensation amounts will depend on each person's tenure with the company: Those hired after 2001 will receive $2,000 each and those hired before that will get $492 for each month of employment at Sodexho up to a maximum of 120 months. The lead plaintiffs will also receive $120,000 each.
The cash payouts will come in addition to money spent to set up monitoring, training and other diversity initiatives, said Leslie Aun, a company spokeswoman.
Of the company's 100,000-plus North American employees in 2004, about one in eight managers were black, Aun said. She said there are no figures available for upper management, but court documents said that, in 2000, blacks held 18 out of 700 upper management jobs and none of the 188 top corporate jobs.
In addition, plaintiffs alleged that so-called black accounts — at historically black colleges and universities, for example — were overwhelmingly staffed with black employees and managers, who were rarely promoted outside of those accounts.
Cynthia Carter-McReynolds, the lead plaintiff in the case, has been a unit manager at Howard University, a predominantly black campus in Washington D.C., since 1986. She said that she has unsuccessfully applied for more than 50 promotions.
"I'm overjoyed that it's over," she said Wednesday. "This lawsuit, I'm hoping, will open up the doors for more opportunities for African-Americans in the company to pursue their dreams and hopes."
Ellen Early, a plaintiff who quit a low-level management post after suffering job-related anxiety attacks, called the company's environment "infuriating."
"There was a limit as to how far African-American employees could go, and a limit as to what facilities African-American employees could go to," said Early, who now works for a competitor in the Baltimore-Washington region.
Sodexho Inc. is the North American subsidiary of the France-based Sodexho Alliance. It provides food services to more than 6,000 businesses and organizations, including hospitals, cruise ships and universities. It's also the official supplier for the U.S. Marine Corps. Last year, the company had $6 billion in sales.
The settlement comes amid a growing wave of cases alleging race-and gender-based discrimination at large companies, experts said.
Black employees at BellSouth Corp., for example, are seeking a judge's authorization to go forward as a group in a discrimination case that could involve as many as 15,000 employees. At Wal-Mart, 1.6 million women are alleging in the largest job-related class-action lawsuit ever that they were assigned lower-level jobs based on their gender.
In 2000, Coca-Cola paid $192.5 million to settle the largest racial discrimination case in U.S. history.
"As a country, we're progressing in the area of equal opportunity," Scanlon said. "This is how the world changes — one company at a time."