How The Right Thing Went Awry

Following affirmative-action guidelines often looks easier than it is. Just ask Liberty National Bank & Trust Co. of Louisville. For years, it enjoyed a local reputation as a model equal-opportunity employer. Yet this April, it agreed to pay more than $275,000 to avoid a federal discrimination lawsuit in what a Labor Dept. spokeswoman hailed as "one of the top 10 settlements nationwide this year."

Ironically, the problem arose, says Charles E. Allen III, the bank's attorney, "because of Liberty's long-term commitment to affirmative action and minority hiring." In 1989, Liberty hired 200 tellers and clerical workers; 16% of them were black. Since that number exceeds the percentage of minorities in the Louisville work force, the bank assumed that it was comfortably within federal guidelines. Not so, said the Labor Dept.'s Office of Federal Contract Compliance Programs. In a routine review of the bank's hiring practices, it discovered that 32% of the job applicantswere black. So more of Liberty's hirees should have been black. "If it weren't for the high percentage of minority applications, there wouldn't have been a case," says Allen. Among Liberty's 1,591 employees, 13% are black. Local civil rights officials confirm that the bank's track record in hiring is good--though they contend that, like other Louisville financial institutions, the bank still has too few blacks in upper-level positions. Minorities make up only 3.6% of bank officers, but that may soon change: Three of the 12 members in the management training program are black.

As part of its settlement with the government, Liberty will offer jobs to 18 of the minority applicants it turned down two years ago. Whether or not they accept, they will receive back pay equal to the amount they would have earned had they been working there since 1989--collectively, $277,833. It could actually be less, since any wages they have earned from other jobs will be subtracted from their back-pay awards.

Liberty is also establishing a minority committee to advise on recruiting and retaining black employees--a move motivated, if not mandated, by the settlement. Apart from that, the bank plans no change in its affirmative-action efforts. Says Janet Geurin, the bank's black Equal Employment Opportunity Coordinator: "My feeling is we are making steady progress, and that's my benchmark."

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