The grocery chain will pay $10-million to end a lawsuit contending it discriminated against black employees.
Publix Super Markets Inc. on Friday agreed to pay $10-million to settle a class-action discrimination case alleging that as many as 15,000 African-Americans were fired or passed over for promotion because of their race since 1993.
Publix admitted no wrongdoing in the case, in which seven current and former black employees of the Lakeland supermarket chain charged the company engaged in a pattern of passing over black employees for promotion in favor of less-qualified white employees.
A Florida State University economist who reviewed the company's records found that even though Publix's African-American payroll increased from 6 percent to 11 percent of the company's 150,000 workers between 1993 and 1996, that was well below the percentages of blacks in each of the four states where it operates. The study also found that blacks rarely got management jobs in the 646 Publix stores, were less likely to be promoted to full-time jobs and were twice as likely to be fired as whites.
The suit, which was scheduled for trial in March, was the second of four discrimination cases that have confronted the nation's seventh-biggest grocer over the past seven years. In 1995 Publix paid $81.5-million to settle a similar case alleging sexual discrimination filed on behalf of 161,000 women employees. At the same time, the company paid $3.5-million to settle racial discrimination claims filed by the Equal Employment Opportunity Commission on behalf of all black store employees. A fourth class-action suit alleging sex and race discrimination at Publix warehouses and food plants was dismissed this year.
"We think this settlement is a win-win situation for both the class we represent and the company," said Kent Spriggs, the Tallahassee lawyer whose firm will get $2.4-million for handling the case and monitoring Publix's compliance with the settlement for the next seven years. "We think we secured as much, if not more, money for our class members as the claimants got in the women's case."
Publix spokeswoman Jennifer Bush said, "This settlement really builds on what we already had put in place to settle the earlier discrimination case." Publix agreed in the earlier settlement to post all job opportunities, set hiring and promotions goals for minorities and set up an appeals process for disputes.
Since 1997, blacks in Publix store management jobs rose 31 percent to 8.4 percent of all managers.
The company, which is employee-owned but controlled by its founding family, said the $10-million settlement will not affect its financial strength or ability to grow. In the most recent quarter,Publix reported earnings of $113.9-million on revenues of $3.5-billion.
Both sides filed a preliminary settlement agreement Friday. The agreement will not be finalized until after a fairness hearing is held by U.S. District Judge James Whittemore. No date has been set for the hearing.
The settlement essentially formalizes for African-Americans the job protection and promotion mechanisms Publix agreed to in settling with the EEOC and the women's group five years ago.
But it also includes hiring an outside industrial psychologist to rewrite a multiple-choice test Publix uses in helping pick employees for promotion; the exam was found to discriminate against blacks. And it adds the outside mediator to referee disputed racial discrimination claims over the next seven years.
Unlike the women's case _ which centered on females being denied promotions, assigned to dead-end career tracks and the company tolerating a hostile work environment _ the race case also alleged wrongful firings.
As a result the rewards will be based on a complicated formula that includes different types of discrimination that employees allegedly endured. Highlights of the settlement:
More than half the money _ $5.45-million _ will be split among those who claim they lost their job because of race. Rewards may be reduced or eliminated for those who were fired for stealing from the company, falsifying time cards, lying or drug-related offenses.
The seven named plaintiffs, whose on-the-job experiences were determined to be common among all black workers at Publix, will each get $55,000.
African-Americans who claim they were passed over for promotion because of their race will share $2.25-million.
It will not be known how much individual class members will get until attorneys calculate how many file a claim, a process that will not begin for months. In Florida, rewards will be available to any African-American who worked in a Publix store since April 3, 1993. Different dates apply to Publix store employees in Georgia, Alabama and South Carolina. Black females who already shared in a reward from the women's case can collect again because of their race.
Earlier the case was expected to provide rewards to as many as 50,000 African-Americans. The eligibility list was slashed by two-thirds by setting eligibility dates, limiting rewards to people at least 20 years old when they left Publix and requiring they worked there a minimum of 90 days.