Cyrus Mehri

At four in the afternoon on June 14, 2000, the parties resolved the final details of a settlement in principle with Coca-Cola. The employees’ class-certification motion was due that day; filing had to begin before the clerk’s office closed. Cyrus Mehri, H. Lamar Mixson and Jeffrey Bramlett were the three co-lead class counsel, working with a broader team for four named employees and a nationwide salaried class.

Backpay remained unsettled. The parties agreed to submit that question to binding arbitration by neutral employment-discrimination experts, assisted by a neutral labor economist. Discovery and negotiations had brought them to an agreement on workplace reform while leaving a defined process for resolving the disputed amount.

The formal agreement, signed on November 16, 2000, placed an independent task force inside the company’s employment systems. It could examine personnel data, speak with employees and recommend changes that Coca-Cola would have to implement unless it obtained judicial relief. Annual public reports would show what the company had done and what remained unfinished.

Linda Ingram’s Call

Linda Ingram had contacted Mehri in the spring of 1998. His firm led a lengthy investigation of employee accounts, company records and specialist analysis before class allegations were added to the federal complaint in April 1999.

Ingram, Elvenyia Barton-Gibson, George H. Eddings Jr. and Kimberly Gray Orton became the class representatives. They challenged the systems governing compensation, promotion, performance evaluation and advancement through Coca-Cola’s salaried workforce. They alleged racial disparities that kept African-American employees away from influential divisions and higher corporate levels.

The representatives helped identify witnesses, reviewed pleadings and participated personally in mediation. Mehri, who had represented more than a hundred class representatives, described these four as “more involved in prosecuting this case and negotiating the settlement” than any he had previously encountered. Their participation continued through the negotiations over the remedy.

The class covered African-American employees in salaried exempt and non-exempt positions in Coca-Cola’s United States operations from April 22, 1995 through June 14, 2000. That boundary mattered in a business whose products also passed through independently owned bottlers: employees of those separate companies were outside the settlement.

Coca-Cola sought dismissal of the class allegations, but Judge Richard Story denied its motion in July 1999. Counsel built the record for class certification while pursuing court-directed, confidential, nonbinding mediation. The litigation continued during the talks.

To reach employees, the class team sought emergency relief from local rules restricting communication with class members. Counsel examined human-resources databases and diversity reports, reviewed more than 140,000 pages of documents, gathered over 150 employee affidavits and deposed senior management.

The June 2000 agreement in principle and the later backpay determination still required judicial approval. Under Rule 23, notice and a fairness hearing gave absent class members an opportunity to assess the proposed resolution. On June 7, 2001, after reviewing the compromise and the class’s representation, the court granted final approval. Supervised implementation could begin.

Seven Seats and a Right to Investigate

Coca-Cola selected three task-force members, class counsel selected three, and the parties jointly chose a chair, all subject to court approval. Former Labor Secretary Alexis Herman chaired the seven-member body. M. Anthony Burns, Gilbert F. Casellas, Edmund D. Cooke Jr., Marjorie Fine Knowles, Bill Lann Lee and René A. Redwood held the other seats.

These members worked outside the company’s management hierarchy. They could examine relevant nonprivileged books, records and workforce data, communicate directly with officers and employees, commission anonymous surveys and focus groups, and receive confidential information from the ombuds office. They could also investigate complaints, retain independent consultants and obtain legal assistance, including from class counsel, with reasonable expenses reimbursed under the agreement.

That access gave the task force a way to identify defects in employment practices and test proposed corrections. Its written annual reports went to the chief executive, the board, the court and class counsel, and became public. The task force also presented its findings to board leadership.

A recommendation carried an obligation to act. Coca-Cola had thirty days to petition for judicial relief, unless the company and task force agreed to extend the deadline. To prevail, the company had to prove by a preponderance of the evidence that the recommendation involved unsound business judgment, was technically infeasible or was not cost-effective. Before a petition, the parties and task force had to make a good-faith effort to resolve their disagreement.

The agreement treated temporary delay separately. To postpone implementation while seeking relief, Coca-Cola had to file a stay motion with its petition. Filing that motion paused the obligation to implement the disputed recommendation until seven days after the motion was denied. A challenge without a stay motion did not itself suspend implementation.

Coca-Cola continued to manage its business, and the task force’s authority covered the employment systems defined by the settlement. Within those limits, Mehri and his co-lead counsel had secured a process that reached from evidence to action: the task force could examine a problem, recommend a correction and monitor compliance. A recommendation did not depend on a fresh enforcement order; the company had to bring its objection to court and satisfy the agreed standard.

Relief on Different Timelines

The settlement’s financial provisions addressed both past losses and future earnings. Approximately $58.7 million went to a compensatory fund, $24.1 million to make-whole and backpay relief, and $10 million to a promotional-achievement fund addressing advancement after settlement.

Other figures described work still to be done. Class counsel’s experts estimated approximately $43.5 million in pay-equity adjustments over ten years, including future salary effects and promotion-related corrections. Counsel estimated a further $36 million in programmatic expenditures during the task force’s original four-year term, covering systems, experts, monitoring and implementation.

Those future benefits required continuing review. Access to personnel records and independent analysis allowed the task force to examine whether salary adjustments and changes in advancement practices reached employees.

How a Vacancy Was Filled

The task force organized its work around nine connected systems: performance management, staffing, compensation, diversity education, equal employment opportunity, problem resolution, career development, succession planning and mentoring.

Staffing made the changes tangible. Coca-Cola introduced internal job postings and candidate-pool requirements. Openings at lower salaried grades generally required at least three candidates, including a woman or minority candidate. At higher grades, a nondiverse slate required senior human-resources review and reporting to the task force.

Performance reviews used common criteria and provided appeal rights. Compensation design linked base pay, bonuses and stock options to documented performance and potential, while pay-equity analyses tested the results. Measures of managers’ leadership of employees connected diversity performance to managerial compensation.

Employees also gained ways to raise concerns beyond their immediate supervisors. A confidential ombuds office reported directly to the chief executive. A telephone service operated around the clock, and written procedures governed investigations and their disposition.

Joint experts Dr. Kathleen Lundquist and Dr. Irwin Goldstein supplied audits, workforce analyses and system reviews. Their work informed the task force’s judgments. The board’s public-issues committee and the annual reports provided recurring oversight above the company’s human-resources administration.

What the 2003 Audits Found

The December 2003 report assessed the first major year of implementation during Coca-Cola’s large “S2” restructuring of its North American business. Some systems had advanced considerably; others had been delayed. Because the report was public, employees could see both the changes and the remaining obligations.

The posting system was operating, and employees reported better visibility into openings. Diversity and equal-opportunity training drew positive responses. Adverse-impact monitoring had expanded, one-on-one mentoring continued, the ombuds office was receiving substantial use, and board vacancies were being filled more diversely.

Performance-management training remained incomplete. Interim reviews were missing from nearly half the audited appraisals. Career-development and structured-interview work had been delayed, diverse slates remained weak for many executive openings, and the report identified promotion disparities during the restructuring.

The figures made some of those shortcomings precise. Of 526 audited postings, 94 missed the candidate-pool requirements, mostly because fewer than three candidates had applied; four lacked a woman or minority candidate. A smaller sample of internal-only postings raised adverse-impact concerns that the task force directed Coca-Cola to investigate.

A 2002 pay-equity analysis had produced 194 salary increases. A computer-system conversion then delayed analysis of the next cycle. In response to implementation gaps raised by the task force, company leadership committed resources, closer monitoring and more frequent accountability reviews.

The Final Conference

At Coca-Cola’s request, Judge Story extended the task force’s original four-year term through December 2006. On December 1, 2006, he found that the company had met or exceeded the agreement’s requirements through that date, thanked the seven members and the joint experts, and relieved them of further duties. Mehri appeared for Linda Ingram at the final settlement conference, more than eight years after she had first contacted him.

Mehri is a founding partner of Mehri & Skalet and co-founded Working IDEAL with Pam Coukos and Jenny Yang. There he advises on workplace policies, leadership practices and measures of equity, bringing his experience negotiating and monitoring employment reforms to the design of companies’ everyday practices.