Consolidated Freightways to Pay $2.75 Million for Racial Harassment at Kansas City Facility

January 14, 2005

The U.S. Equal Employment Opportunity Commission (EEOC) this week announced the settlement of an employment discrimination lawsuit under Title VII of the 1964 Civil Rights Act against Consolidated Freightways Corp. of Delaware for $2,750,000 on behalf of 12 African American dockworkers who were reportedly subjected to a racially hostile work environment at the Kansas City, Mo., facility.

The Commission alleged in the lawsuit that co-workers subjected the African American employees to racial intimidation which included hanging nooses in the workplace, assaults, threats of physical harm, displaying racially offensive graffiti, damaging property and other harassment. Consolidated, which filed a petition for relief under the Bankruptcy Code on Sept. 3, 2002, and is now in the process of liquidation, was one of the largest freight transportation companies in North America.

In EEOC’s suit, filed on May 31, 2002, in the United States District Court for the Western District of Missouri, Western Division (No. 4:02-CV-00519-DW), the Commission alleged that Consolidated knew about but did nothing to stop the racial harassment, and that it disciplined one of the employees for complaining about the harassment. The litigation was filed by EEOC after the agency investigated charges of discrimination, found merit, and exhausted its conciliation efforts to reach a voluntary pre-litigation settlement.

The settlement, in the form of a Consent Decree, provides monetary relief to former dockworkers at Consolidated’s Kansas City, Mo.-based facility. It calls for Consolidated to pay $2,750,000 to the former employees and their private attorneys. The amount of the actual recovery will be determined by the Bankruptcy Court based on the company’s remaining assets.

Lynn Bruner, director of the EEOC’s St. Louis District Office, said, “No employee should be subjected to graphic racial symbols, racial graffiti or threats of physical violence, and no company should tolerate such behavior in their workplace. By continuing to pursue this case even after the company filed for bankruptcy, EEOC hopes to alert employers everywhere that it considers this issue to be extremely serious and will act accordingly.”

Consolidated denies the EEOC’s allegations of race discrimination and asserts that it is entering into the Consent Decree because it believes that it is in the best interests of its bankruptcy estate and its creditors.

Robert Johnson, the EEOC’s regional attorney in St. Louis, said, “The company’s bankruptcy keeps us from obtaining full relief for these victims of gross racial harassment, but we expect that they will soon receive substantial compensation from the bankruptcy proceedings.”

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