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A Pattern of Discrimination at Boeing?

The biggest part of the gender-discrimination class action against Boeing (BA) involves allegations of pay discrepancies between women and men, but that's hardly the only charge (see BW, 4/26/04, "A New Black Eye for Boeing?"). In several sworn declarations, black female employees describe a racially hostile workplace, where, as cited in at least one case, a white co-worker made taunts involving sex, slavery, and the N-word, according to accounts in 12,000 pages of documents obtained by BusinessWeek.

Boeing kept locked in cabinets in secured rooms compensation studies dating back to at least 1994 that showed minorities -- not only women -- were paid less than white men. In one 1998 survey, some Boeing recruiters said they "were not always comfortable going to black colleges and universities," and said they didn't receive "clear direction regarding the importance of minority recruitment," according to the document obtained through an unsealing motion in a sex-discrimination suit.

Boeing spokesman Kenneth B. Mercer says the quotes from this study do not reflect how Boeing does business, then or now. "These excerpts reflect a suspicion, not fact," he says. "We did not believe the comments were accurate then, and we know that they are not accurate today."

"RACIAL BIAS" IN HIRING? Boeing denies it discriminates against minority or female employees. But its own internal documents indicate that minority employees were, in some cases, on the short end of the stick, earning less pay and receiving fewer promotions than their white colleagues. In 1998, for example, Boeing's Diversity Salary Assessment team concluded that "Asian and Black hires received, on average, lower starting salaries than Caucasians in the Northwest."

A 1997 internal Boeing audit concluded that "similarly situated women and minorities have lower starting salaries." The report said "women and minorities are placed in lower grade levels and lower-paying functions." In merit-pay reviews, the audit said, "African-Americans tend to receive lesser [percentage] increases in engineering." And in January, 1998, top Boeing executives who attended a diversity session at the company's annual Palm Springs meeting were briefed on an internal survey of its affirmative-action issues. The survey was reported to have found "racial bias" in hiring practices and "gender and racial bias" in promotion practices.

Boeing spokesman Mercer says Boeing is committed to equal rights. Originally intended to help identify and eliminate pay disparities, the various studies "can't capture all of the critical factors that go into pay or promotion decisions," Mercer says. He adds: "Boeing has a comprehensive program that actively recruits diverse employees. We've been successful at doing so and have been honored for that success."

VIGOROUS CONTESTS. At the time Boeing officials were conducting these compensation studies, the plane maker was battling a separate discrimination class action filed in 1998 by 43 African Americans and an audit into the same issues by the U.S. Labor Dept.'s Office of Federal Contract Compliance Programs (OFCCP). As the nation's second-largest federal contractor, Boeing receives more than $10 billion annually in government contracts and is required to comply with federal equal-opportunity and affirmative-action laws. A violation of these laws could strip Boeing of lucrative defense contracts.

That may explain why Boeing has contested these cases so vigorously. It won the first round in 1999, when it agreed to settle Labor's discrimination case for $4.5 million. Yet, Boeing's Marcella Fleming, then director of employee relations, later told colleagues, "We thought there was a lot more potential financial liability out there," according to a recently released transcript of a Dec. 1, 1999, meeting involving Boeing HR officials and those who had negotiated the OFCCP deal. After all, Boeing not only settled for a pittance but also got the OFCCP to agree to no on-site audits for four years. According to the meeting transcript, Fleming told her colleagues that Boeing's potential liability could have been upward of $120 million.

Also in 1999, Boeing agreed to pay some 3,600 African Americans $14.2 million to settle pay-and-promotion discrimination charges without admitting any liability. This case involved appearances by Reverend Jesse Jackson in support of the plaintiffs at rallies and meetings, including at least three meetings Jackson had with former Boeing CEO Philip M. Condit. But the legal agreement has been tied up in appeals court over some technical issues. Both sides are scheduled to meet with a court-appointed mediator this summer.

BUSY DAY IN COURT. Other discrimination claims haven't gone away, however. Now, Boeing faces two class actions seeking back pay and punitive damages, which if successful could cost the aerospace giant upward of a billion dollars, according to estimates by legal experts with knowledge of the cases. Fifty-five Boeing Asian-American employees, who filed a discrimination class action in 1999, are going to trial on May 17 in a federal court in Seattle.

That suit, which represents 1,500 Boeing engineers with ethnic ties to seven Asian countries, alleges that the plaintiffs were unfairly denied pay raises and promotions. Also on May 17, 38 women representing 28,000 female Boeing employees will take their sex-discrimination suit to trial in the same federal courthouse.

Boeing employee Aprill Linear tells a poignant story in an April, 2000, sworn declaration. The African-American woman claims in her declaration that she was denied promotion and overtime opportunities as a janitor and shop worker at Boeing's Auburn and Puyallup plants (both in Washington), even though male co-workers with similar skills were promoted and given opportunities to work overtime. She alleges that male co-workers harassed her, and she asserts that supervisors never took any meaningful action to stop them.

"SYSTEMIC DISCRIMINATION"? In July, 1999, a male co-worker demanded to see her "butt and legs" and told her other men wanted to see her body, according to her sworn statement. A month later, she said the same male co-worker told her that if slavery still existed, "the white man would rape me, and I would be required to breed children for the white man." Then he asked, "Aprill, what would you do if you were my house nigger?"

Boeing denies all the charges in the lawsuits and adds that it doesn't tolerate any racial or sexual harassment in the workplace.

Before the OFCCP matter was settled, probers from the Labor Dept. were telling Boeing in 1998 that they had found discrimination at various Boeing plants. At a helicopter plant in Philadelphia, OFCCP investigators told Boeing that they believed they had a "prima facie case of systemic discrimination concerning compensation of females and minorities," according to Labor Dept. documents disclosed in the gender case.

Fleming's apparent boast that Boeing had gotten off lightly in the final Labor Dept. settlement didn't sit well with Shirley Wilcher, who negotiated the Boeing settlement for Labor as the OFCCP's deputy director. In an expert report filed with the court on behalf of the plaintiffs in the current gender-discrimination case, Wilcher claims Fleming's statement "speaks volumes about the callous disregard that the Boeing Co. had demonstrated for the victims in this case." Now it's time for a jury to decide whether it agrees. By Stanley Holmes in Seattle

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