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. Last Updated: 07/27/2016

Texaco Settles Record Race Suit

WASHINGTON -- The lawsuit was filed more than two years ago, but it took Texaco just 11 days to settle race discrimination claims after tape recordings of executives belittling black employees were played throughout the United States.

The deal, which still must be approved by a court, will cost the oil giant $176.1 million, making it the largest settlement of a racial discrimination lawsuit in U.S. history.

"I have committed myself -- and the entire management team of this company -- to the elimination of any trace of discrimination in Texaco," Chairman and Chief Executive Peter Bijur said in a statement Friday after negotiators reached the agreement.

Texaco agreed to pay $115 million to about 1,400 current and former employees and to give black employees 10 percent raises Jan. 1.

The company also will spend $35 million on an independent task force with wide-reaching power to help open opportunities for black workers, monitor racial discrimination and develop diversity and sensitivity training.

The task force, which will operate for five years with its own staff, will determine whether to set numerical hiring or promotion goals and, if so, how to monitor them. Its decisions can be overturned only in court.

"No longer will we hear the excuse, 'We just didn't know,'" said Michael Hausfeld, one of the plaintiffs' attorneys. He said establishment of a "truly independent" task force was the greatest sticking point among negotiators.

The lawsuit, filed in 1994, claimed a "good old boy" network at Texaco reserved the best promotions and biggest raises for whites. Former and current black employees said they were called "orangutans" and "porch monkeys" to their faces.

The pressure on Texaco mounted dramatically last week after plaintiffs produced a tape of executives using racial slurs, mocking the black cultural festival Kwanzaa and plotting to hide or shred documents sought by the plaintiffs.

The recordings were made by a Texaco executive who gave the tapes to the plaintiffs after he lost his job in a downsizing. Company investigators said an electronic enhancement found that executives did not use the word "niggers," as it had appeared, but the company said the tone of the conversation was still troubling.

Texaco apologized for the tapes and suspended two executives, but civil rights activist Jesse Jackson called for a boycott to begin Saturday. His Rainbow Coalition continued the call for a boycott of Texaco stock and use of its credit cards "to keep the pressure on."

Jackson hailed the Texaco settlement as a good first step but said much remains to be done, including changes in employment practices and the working environment.