EEOC, YRC Settle Race Discrimination Suits

Kevin P. McGowan
BNA Daily Labor Report
July 02, 2012
View the original piece

The Equal Employment Opportunity Commission, Yellow Transportation Inc., and YRC Inc. have settled for $11 million an EEOC suit alleging that the trucking companies permitted the racial harassment of black employees at a now-closed Chicago Ridge, Ill., facility, EEOC announced June 29 (EEOC v. Yellow Transp. Inc., N.D. Ill., No. 09 CV 7693, preliminary approval granted6/28/12).

Magistrate Judge Susan E. Cox of the U.S. District Court for the Northern District of Illinois June 28 granted preliminary approval of a proposed consent decree that would settle EEOC's suit under Title VII of the 1964 Civil Rights Act. The court must grant final approval following a fairness hearing before the decree takes effect.

The proposed consent decree would settle both EEOC's suit and a private suit filed in 2008 by 14 black employees under the Civil Rights Act of 1866 (42 U.S.C. § 1981), which were consolidated for purposes of settlement.

Second Large Settlement With YRC

EEOC claimed that black employees at the Chicago Ridge facility, which closed in 2009, were subjected to multiple incidents of hangman's nooses and racist graffiti, comments, and cartoons. EEOC claimed that Yellow and YRC also subjected black employees to harsher discipline and closer scrutiny than their white counterparts and gave black employees more difficult and time-consuming work assignments. Although numerous black employees complained about these conditions, Yellow and YRC failed to act to correct the problems, EEOC alleged.

Yellow Freight operated the Chicago Ridge facility until its merger with Roadway Express, when the two companies combined to form YRC Inc. in October 2008, EEOC noted.

In 2010, EEOC and YRC had settled for $10 million a separate Title VII suit involving alleged racial harassment at two other company facilities in Chicago Heights and Elk Grove Village, Ill., which are still open (178 DLR A-13, 9/10/10).

“The company now has had to pay $21 million to resolve egregious racial harassment and discrimination at two of its facilities,” said John Hendrickson, EEOC regional attorney in Chicago. “Employers should not believe that because they are in an industry—like trucking—known for rough working conditions, they can ignore discrimination when it arises. A noose is not an acceptable symbol there or anywhere else—that's the law.”

A group of 14 black employees at YRC initially sued under Section 1981 in 2008 before EEOC filed its race discrimination suit the following year. In October 2006, 15 current and former black employees, including the 14 who had sued earlier, intervened as plaintiffs in EEOC's suit.

Yellow Freight and YRC Inc. admit none of EEOC's allegations by entering into the settlement, the decree provides.

Company Disputed EEOC's Claims

In a June 29 statement, YRC Freight in Overland Park, Kan., said it “vigorously disputed” EEOC's allegations but “amicably settled” the suits in order to avoid further legal fees and costs.

“We take any claim of harassment or discrimination very seriously,” said Kelly Walls, senior vice president of human resources for YRC Freight. “There may be isolated instances of improper conduct in any workplace, but the allegations in these cases did not reflect the real working environment at Chicago Ridge.”

The company said it had evidence “refuting the most scandalous allegations,” that the original lawsuit was filed by a small group of former employees, and that “many former employees declined to join” EEOC's subsequent lawsuit.

The company makes clear through its “Respect in the Workplace policy,” its training, and its internal communications that “respect for fellow employees is a fundamental component of being a part of the YRC Freight team,” Walls said in the statement.

YRC Freight, which has about 21,000 employees at nearly 280 U.S. locations, “actively recruits minorities, women, and veterans” for management, dock professional, and driver jobs, the company said.

Terms of Proposed Decree

The proposed decree will benefit as many as 324 African American employees who worked at Chicago Ridge as loading dock workers, hostlers, janitors, clericals, and supervisors from 2004 until the facility closed in September 2009, EEOC said.

Many black employees who formerly worked at Chicago Ridge currently work at YRC's Chicago Heights facility, where they are shielded from race discrimination or harassment under the terms of EEOC's 2010 consent decree with YRC covering that facility, EEOC said.

The proposed decree settles both the EEOC suit and the private plaintiffs' Section 1981 suit, which the district court in May 2011 certified as a class action. No member of the Section 1981 class opted out of the certified class, which covers current or former YRC employees who worked at the Chicago Ridge facility at any time between October 2004 and September 2009, according to the decree.

Class members covered by the decree will have an opportunity to object to its terms at a court fairness hearing, but will get no second chance to opt out of the Section 1981 certified class, the proposed decree provides.

Class counsel for the Section 1981 plaintiffs will receive $1.1 million representing attorneys' fees and costs, the proposed decree provides.

John C. Hendrickson, Gregory Gochanour, Richard J. Mrizek, and Ethan Cohen of EEOC in Chicago represented EEOC. Randall D. Schmidt of the University of Chicago Law School, Carol Coplan Babbitt in Chicago, and Catherine A. Caporusso in Chicago represented the private plaintiffs. Kevin W. Shaughnessy and Tracey L. Ellerson of Baker & Hostetler in Orlando, Fla., represented YRC Inc.

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