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The BBC's Stephen Evans in New York
"Coke has agreed to change its ways"
 real 28k

Thursday, 31 May, 2001, 00:26 GMT 01:26 UK
Coke race suit nears settlement
Coca-Cola cans
The company has not formally admitted wrongdoing
By Steven Evans in New York

The world's largest settlement for racial discrimination is about to be formally agreed.

Black employees accuse Coca-Cola of denying them fair pay or promotion.

A judge in Coke's hometown, Atlanta, has now said he will now approve compensation of nearly $200m to more than 2,000 employees of the world's biggest soft drinks company "within days".

Part of the agreement involves linking the pay of Coke's directors to progress toward getting more black employees.

'Pecking order'

Two years ago, black employees of Coca-Cola accused the drinks company of having a pecking order, where white employees were promoted faster and got paid more.

Coke has not formally acknowledged doing anything wrong, but it has agreed to pay $192m in compensation, with some former employees standing to get hundreds of thousands of dollars.

Coca Cola Chairman and CEO Douglas Daft
Executives' pay will be linked to improvement
The judge has now indicated he will approve the deal, saying he'll issue a written order authorising it within days.

Coke has agreed to change its ways, with directors having the incentive of knowing that their pay will depend on progress in hitting targets for raising the proportion of minorities in the workforce.

Coke's legal problems may not be over, though - seven other employees are holding out for compensation of $1.5bn dollars.

Ford problem

Coke is not the first big international company to fall afoul of anti-discrimination law; Ford in Britain found itself in trouble after a newspaper advert featured white faces which had been changed from black ones in a photograph.

At one of its British factories workers with an Asian background were taunted.

White lorry drivers made sure jobs only went to other white people.

Like Coca-Cola, the company at the very top realised that publicity would be damaging.

Ford's chief executive personally intervened to change policy.

Experts in race relations say that it is usually only when approval and disapproval is strongly voiced from the top that change comes.

Tying directors' pay to change is a new strategy.

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16 Nov 00 | Americas
Coca-Cola in race pay-out
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