News Article

Settling Lawsuits With A Gesture: More Firms 'Pay Up' By Naming A Building or Funding A Program

The Washington Post

Published: February 11, 2001

Call it creative sentencing for corporations.

Every year, thousands of lines of legal agreements require companies to make … gifts that are more symbolic gestures than direct awards to plaintiffs. Dismissed by some lawyers as fluff and hailed by others as valuable concessions that further important causes, they include creating minority scholarships, donating computers to schools, and even providing band uniforms.

Plaintiffs in race or sex discrimination cases often demand these gifts in addition to monetary damages because they believe they further the goals of the civil rights movement in the long run.

Cyrus Mehri has won huge cash settlements for his clients, including a $192.5 million award for black Coca-Cola Co. employees who sued for discrimination. But he said "symbolism is important" because more than money is needed to change the country's attitudes toward diversity in the workplace.

The Coke settlement does not mandate any type of scholarship or charitable donation. But the wording of the agreement is rich with symbolism that those who are close to the case could appreciate, Mehri said.

For example, one line states that Coke will strive to set the "gold standard" in diversity -- a phrase Mehri and his peers included as a perpetual reminder to Coke managers who ignored a 1995 report from a black senior executive.

When Coca-Cola announced the settlement agreement, it also announced that it would give $ 50 million to the Coca-Cola Foundation, which donates to educational organizations.