Swann v. Charlotte-Mecklenberg Board of Education Appendix Vol. 1 pp. 1-464

    UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK

x

BARI-ELLEN ROBERTS, SIL CHAMBERS, :
JANET LEIGH WILLIAMS, MARSHA HARRIS,
BEATRICE HESTER, and VERONICA SHINAULT, :

Individually and as 94 Civ. 2015 (CLB)
Class Representatives, :

Plaintiffs, :

-against- :

TEXACO INC., :

Defendant. :

x

STIPULATION AND SETTLEMENT AGREEMENT

This Stipulation and Settlement Agreement (“Settlement Agreement”) is entered 

into this 21st day of January 1997 by and between Plaintiffs in the above-captioned litigation 

(the “Action”), both individually and on behalf of the stipulated Settlement Class as defined 

herein, and defendant Texaco Inc., including all its predecessors, successors and subsidiaries 

(“Texaco”). For purposes of this Settlement Agreement, “subsidiaries” shall mean entities in 

which Texaco Inc. has, directly or indirectly, more than a 50% ownership interest.

Doc #1356400.NY



WHEREAS, Plaintiffs are prosecuting the Action on behalf of a purported class 

of present and former salaried African-American employees of Texaco;

WHEREAS, Plaintiffs, through their counsel, have alleged in the Action that 

certain Texaco employment policies and practices had a disparate impact on the individual 

plaintiffs and the class alleged in the complaint in violation of Section 1981 of the Civil Rights 

Act of 1871, Title VII of the Civil Rights Act of 1964, and Section 296 of the New York 

Human Rights Law;

WHEREAS, Plaintiffs, through their counsel, have conducted an extensive 

investigation into the facts of this case and have conducted substantial class action discovery in 

the Action;

WHEREAS, Plaintiffs, through their counsel, moved for class certification in 

the Action and the court had scheduled a hearing on that motion for December 6, 1996,

WHEREAS, Texaco has denied Plaintiffs’ allegations in the Action, and 

specifically the claims of discrimination against Plaintiffs and the members of the class they 

purport to represent;

WHEREAS, Texaco opposed Plaintiffs’ motion for class certification 

contending, among other things, that individual questions raised by the purported class 

members’ claims of discrimination predominate over any common questions among the 

purported class;

WHEREAS, on November 15, 1996, Texaco and Plaintiffs, through their 

counsel, entered into an Agreement in Principle to Settle (the Agreement in Principle ) the 

individual and class claims (hereafter the “claims”) asserted in the Action,

Doc #1356400.NY 2



WHEREAS, in the Agreement in Principle, the parties, solely for purposes of 

settlement, agreed to stipulate, subject to Court approval, to certification of a settlement class 

consisting of all African-Americans employed in a salaried position subject to the Texaco 

Merit Salary Program in the United States by Texaco or its subsidiaries at any time from 

March 23, 1991 through and including November 15, 1996;

WHEREAS, on November 22, 1996, pursuant to the Agreement in Principle, 

Texaco deposited with Citizens Bank of Maryland (the “Escrow Agent”) the sum of 

$115,000,000 in cash (the “Settlement Fund”), upon which interest is accruing, in partial 

resolution of this Action, pursuant to the terms of the Escrow Agreement attached hereto as 

Exhibit A;

WHEREAS, Plaintiffs, through their counsel, have concluded, after carefully 

considering the facts and applicable law, that it would be in the best interest of the Settlement 

Class to enter into this Settlement Agreement to avoid the uncertainties of continued litigation 

and ensure a benefit to Plaintiffs and the members of the Settlement Class;

WHEREAS, this Settlement Agreement is the result of arm’s length negotiations 

between counsel for Plaintiffs and Texaco, and counsel for Plaindffs have concluded that this 

Settlement Agreement is fair, reasonable and adequate and in the best interests of Plaintiffs and 

the Settlement Class they represent;

WHEREAS, Texaco has concluded that it is in its best interests to enter into this 

Settlement Agreement to eliminate the expense, inconvenience, burden and uncertainties of 

continued litigation and to avoid any further distractions and controversies related to the Action 

and the allegations therein; and

Doc #1356400.NY 3



WHEREAS, this Settlement Agreement shall not be deemed or construed as an 

admission or evidence of any violation of law or any liability or wrongdoing by Texaco or the 

existence of a class satisfying the requirements of Fed. R. Civ. P. 23;

NOW, THEREFORE, IT IS AGREED by and among the undersigned counsel, 

on behalf of their respective clients, that, subject to Court approval as provided herein, all 

claims against Texaco in the Action shall be settled, compromised and dismissed on the merits 

and with prejudice on the following terms and conditions:

1. Finality of Spttlement. This Settlement Agreement shall become Final 

on the occurrence of all the following events: (a) entry of an Order by the Court certifying the 

action as a class action on behalf of the Settlement Class; (b) entry of the Dismissal Order 

(subject to the Court’s ongoing jurisdiction during the Monitoring Period), including dismissal 

of all claims in the Action against Texaco by members of the Settlement Class who do not opt 

out, with prejudice, incorporating the Release on behalf of all members of the Settlement 

Class; and (c) the time for appeal of the Dismissal Order and final judgment has expired or, if 

an appeal is noticed, it has been dismissed or the final judgment has been affirmed in its 

entirety and the affirmance has become no longer subject to further appeal or review (the 

“Finality Date” or “Effective Date”).

2. Spftlpmpnt C lass. Solely for purposes of this Settlement Agreement and 

subject to Court approval, Plaintiffs and Texaco agree that this Action may be maintained as a 

class action on behalf of a settlement class consisting of all African-Americans employed in a 

salaried position subject to the Texaco Merit Salary Program in the United States by Texaco or 

its subsidiaries at any time from March 23, 1991 through and including November 15, 1996

Doc #1356400.NY 4



(the “Settlement Class”). Employees whose salaried position was not subject to the Texaco 

Merit Salary Program are not within the Settlement Class. For purposes of this Settlement 

Agreement, African-Americans shall mean persons who, pursuant to the EEOC’s Race/Ethnic 

Identification form, designated themselves to Texaco as “Black”, including those who signed a 

release of claims in exchange for an enhanced severance package.

3. Release. When this Settlement Agreement becomes Final, each member 

of the Settlement Class who does not opt out will have released Texaco from, and have 

covenanted not to sue it on, any and all claims under federal or state law that have been, or 

could have been, asserted against Texaco arising out of or relating to any employment 

discrimination (including retaliation) or disparate treatment or impact in their employment by 

Texaco prior to November 16, 1996 (the “Release”), including any claim for discrimination 

on the basis of age, disability, gender, national origin, race, religion or any other factor or 

protected classification.

4. Texaco stipulates for purposes of this Settlement Agreement that, 

pursuant to Rules 23(b)(2) and (b)(3), plaintiffs Sil Chambers, Janet Leigh Williams, Marsha 

Harris, Beatrice Hester, and Veronica Shinault (the “Class Representatives”) are adequate 

representatives of the Settlement Class and that their claims are typical of the claims of Class 

members, and that the following counsel adequately represent the Settlement Class: Michael

D. Hausfeld and Cyrus Mehri of Cohen, Milstein, Hausfeld & Toll, P.L.L.C.; and Daniel L. 

Berger and Steven B. Singer of Bernstein Litowitz Berger & Grossmann LLP.

5. With respect to equitable and injunctive relief to be provided to the 

Settlement Class, including the creation of the Equality and Tolerance Task Force described

Doc #1356400.NY 5



herein, Plaintiffs and Texaco agree that the Settlement Class should be certified pursuant to 

Rule 23(b)(2) of the Federal Rules of Civil Procedure and, upon the Effective Date, all such 

relief will be binding on all Class members, whether or not they opt-out. With respect to the 

monetary relief to be provided to the Settlement Class, including both the distribution from the 

Settlement Fund and the Salary Increase described herein, Plaintiffs and Texaco agree that the 

Settlement Class should be certified pursuant to Rule 23(b)(3) of the Federal Rules of Civil 

Procedure, and Class members will have the right to opt-out of such relief and pursue their 

individual claims.

Settlement Consideration

6. In full and complete settlement and satisfaction of all claims asserted 

against it and any other obligations Texaco has or might have to pay for class notice, the cost 

of administering the payment of claims, costs of suit, and reasonable attorneys’ fees and 

expenses, under 42 U.S.C. §§ 1981, 1988 and 2000e-(5)(k), and in consideration for the 

Release and the other benefits of this Settlement Agreement, Texaco agrees to the following:

Monetary Relief

7. On November 22, 1996, Texaco deposited with Citizens Bank of 

Maryland the sum of $115,000,000 in cash, upon which interest has been accruing since that 

date, in partial resolution of this Action. No portion of this Settlement Fund was attributed in 

negotiations to any back pay claim. The Settlement Fund shall be used to satisfy: (i) monetary 

claims; (ii) the cost of class notice; (iii) the cost of suit, including reasonable attorneys’ fees 

and expenses, including expert (both consulting and witness) fees and expenses, as approved 

by the Court under Fed. R. Civ. P. 23; (iv) the cost of administration of the Plan of Allocation

Doc #1356400.NY 6



described herein; (v) any obligation Texaco might otherwise have in connection with payments 

or distributions from the Settlement Fund; and (vi) any other purpose the Court may order. 

Class Counsel may draw on or seek reimbursement from the Settlement Fund to pay the costs 

of notice to the Settlement Class, plus taxes, if any, which may be due on interest earned from 

the Settlement Fund. Class Counsel may obtain the services of an appropriate organization to 

assist in the administration of the Settlement and the distribution of the Settlement Fund. If 

this Settlement Agreement is not approved by the Court in whole or part, either preliminarily 

or finally, or if this Settlement Agreement is terminated under paragraph 37 hereof, the 

Settlement Fund (including accrued interest), but excluding the cost of administration already 

expended, shall promptly revert to Texaco.

8. When this Settlement becomes Final, payment of Class members’ claims 

shall be made out of the Settlement Fund in accordance with a Court-approved plan of 

allocation (the “Plan of Allocation”). The proposed Plan of Allocation is annexed as Exhibit

B. Texaco will have no responsibility for, standing, or involvement with the development or 

administration of the Plan of Allocation. The cost of such administration shall be paid solely 

from the Settlement Fund. All federal, state and local income taxes will be withheld and paid 

from the Net Settlement Fund to the appropriate tax authorities, as appropriate. Tax counsel 

will be retained to seek a private letter ruling from the Internal Revenue Service regarding the 

amount, if any, of the distribution from the Net Settlement Fund subject to employment 

(including employer’s share) taxes. A portion of the Net Settlement Fund will be retained 

pending receipt of the private letter ruling. Upon receipt Class Counsel will abide by the IRS

Doc #1356400.NY 7



ruling. Any indicated employment taxes will be paid from the Net Settlement Fund. If 

necessary, a second distribution to class members will be made.

9. When this Settlement becomes Final, each Class member then employed 

by Texaco who was so employed on November 15, 1996, will receive an 11.34% increase 

over such employee’s November 15, 1996 base annual salary retroactive to January 1, 1997 

(such percentage representing, as of November 15, 1996, an aggregate annual salary increase 

of $4 million) (the “Salary Increase”). This increase is in addition to and not in lieu or 

replacement of any other pay increase any member of the Class would receive in 1997 in the 

ordinary, customary or usual course of employment. Within 30 days after the Settlement 

becomes Final, the portion of the Salary Increase accrued from January 1, 1997 to the date of 

payment will be paid to each such employee. Any Class member employed at Texaco on 

January 1, 1997 who did not voluntarily leave Texaco but whose employment was terminated 

by Texaco prior to such date of payment, will be paid on such date the portion of the Salary 

Increase applicable to that employee’s actual period of employment after January 1, 1997.

Programmatic Relief

10. Texaco affirms the following “Statement of Equality and Tolerance

Objectives”:

Texaco Inc. is affirmatively committed to the fullest extent to an 
environment of inclusion; to eradicate all forms of prejudice 
within the company; to promote and foster complete equality of 
job opportunities within the company to all applicants and 
employees regardless of race, gender, religion, age, national 
origin and disability; and to ensure tolerance, respect and dignity 
for all people.

Doc #1356400.NY 8



This paragraph does not create any contractual causes of action or other rights of action that 

would not otherwise exist.

11. Immediately upon the Settlement becoming Final, Texaco and Plaintiffs 

will activate an independent Equality and Tolerance Task Force (“Task Force”) to determine 

revisions and additions to Texaco’s current human resource programs and to oversee, in 

conjunction with the President of Texaco’s Human Resources Division, the implementation by 

Texaco of the human resource program changes agreed to or resulting from the terms of this 

Settlement Agreement including, but not limited to, the specific programmatic changes 

described below.

12. The Task Force will have authority for a period of five years, under 

Court supervision, to determine the policies and practices that should be developed, 

restructured or implemented to meet the programmatic relief objectives of this Settlement 

Agreement. The Task Force will have reasonable access to all relevant books, data,1 

documents and other sources of information, in whatever form they are maintained in the 

ordinary course of business, necessary or appropriate to the exercise of their authority. Given 

the need of the Task Force to review confidential business information of Texaco, each Task 

Force member will sign a Confidentiality Agreement.

13. Texaco will be responsible for implementation of all programmatic relief 

under the terms of this Settlement Agreement, except as otherwise provided in this Settlement 

Agreement. Texaco is not precluded from developing and implementing its own inclusion

1 If there is a disagreement between the Task Force and Texaco as to the accuracy and/or 
completeness of any Texaco data, an independent accounting firm (selected by the Task 
Force from among the six nationally recognized accounting firms) will be appointed to 
certify its accuracy and/or completeness at Texaco’s expense.

Doc #1356400.NY 9



programs as it may find appropriate. In formulating its determinations, the Task Force will 

take such programs into account.

14. The Task Force will consist of three Texaco appointees, three Plaintiffs’ 

appointees, and one independent appointee agreed to by the parties who serves as Chairperson. 

The nominees to the Task Force, including the Chairperson, shall be individuals the Court 

finds responsible and appropriate. They will come from diverse backgrounds, including racial 

and gender diversity. They will come from the following fields:

a. former government officials in the labor/civil rights area;

b. professors/academics specializing in labor/employment 

issues;

c. current or former Texaco executives with experience and 

knowledge of the Company and its workforce needs for 

running its operations;

d. professional employment/diversity consultants;

e. legal profession, including judiciary, knowledgeable in 

employment/diversity matters; and/or

f. business, with practical experience in managing a diverse workforce. 

Names and backgrounds of the nominees are to be submitted to the Court. Should the Court 

disapprove of any nominee, an appropriate replacement is to be submitted. In the event a Task 

Force member is unable or unwilling to continue to serve as a member of the Task Force, the 

party who selected the Task Force member shall have the authority to replace that member, 

subject to the Court approving that nominee. If the Chairperson is unwilling or unable to

Doc #1356400.NY 10



continue to serve as Chairperson the parties shall jointly select a new Chairperson, subject to 

the Court approving the nominee. Texaco shall compensate all Task Force members, 

including the Chairperson, at customary market rates or other terms acceptable to Texaco and 

the Task Force members.

15. The Task Force will evaluate all existing employment policies and 

practices and develop and design, in conjunction with the President of the Human Resources 

Division, procedures, practices and methodologies to achieve the programmatic relief 

objectives of this Settlement Agreement as well as to measure and demonstrate program 

progress and results. The determinations of the Task Force will apply to all salaried non­

officer job positions at all grade levels, in all departments, divisions and subsidiaries 

nationwide. Texaco will provide all funding necessary to fulfill the work of the Task Force, 

including the reasonable compensation of the Task Force members, and the cost of reasonable 

staff, consultants, statisticians, and other appropriate experts.

16. Within the first six months after the Finality Date or at such other 

reasonable time as is agreed upon by the Task Force, Texaco will:

a. Adopt and implement a company-wide diversity and sensitivity 
training program.

b. Adopt and implement a company-wide mentoring program.

c. Insure that Equal Employment Opportunity (“EEO”) and 
Diversity Performance is included in management objectives and 
in determining management compensation.

d. Develop and implement an ombudsperson program.

e. Implement national job posting through at least pay grade 18, and 
commence evaluation of posting at higher grade level positions.

Doc #1356400.NY 11



f. Develop recommendations for the creation and implementation of 
a mechanism to minimize feax of retaliation in connection with 
complaints of employment discrimination.

The Task Force will review the effectiveness of these programs.

17. During this period, the Task Force will, and the President of Human

Resources Division may also begin to:

a. Evaluate and revise or replace the Performance Management 
Program (“PMP”), including the PMP Appeal Process, to ensure 
that the PMP accurately measures employee performance and, 
among other things, that the standards for performance objectives 
are specific, measurable, achievable, relevant, time bound and 
documented.

b. Evaluate and revise or replace methods for determining the 
appropriate competencies needed for a job position or positions. 
Once accepted, Texaco will begin implementation of the changed 
methods within sixty days. Such implementation will include, if 
appropriate, job analyses to identify, but not be necessarily 
limited to, critical job tasks, knowledge, skills and abilities. The 
Task Force will monitor implementation.

c. Review Affirmative Action Plans (“AAPs”) developed under 
Executive Order (“EO”) 11246 to ensure they are properly 
constructed. The Task Force, the Chairman of the Texaco Inc. 
Board of Directors (the “Chairman”) and the Texaco Inc. Board 
of Directors (the “Board of Directors”) shall be informed of the 
compliance performance of each establishment covered by these 
plans. The Task Force may recommend appropriate action where 
deemed necessary.

d. Evaluate and revise or replace the promotion and employee 
development process, including High Potential List procedure, 
and making known to all employees objective Promotability 
Criteria.

e. Establish an Employment Selection and Performance 
Management Oversight/Monitoring System.

f. Evaluate and revise job posting procedures.

Doc #1356400 NY 12



g. Develop and implement centralized monitoring of employee
compensation to ensure no disparate treatment or impact based on 
race which is not job related and/or consistent with business 
necessity. Review appropriate data to ensure against unfairness 
which is not job related and/or consistent with business necessity. 
Data may be furnished in such a form as to protect the identity of 
individuals.

18. The Task Force will, and the President of the Human Resources 

Division may review and revise, as appropriate, the Company’s policies and practices for:

a. Recruitment;

b. Hiring;

c. Training;

d. Special Opportunities;

e. Assignments; and

f. Promotion.

19. The Task Force will, within one year of the Effective Date, complete its 

own review and evaluation of all current employment policies and practices, through, among 

other means, the use of surveys and employee interviews conducted through Texaco. Subject 

to the terms of the Agreement, Texaco will implement such changes or additions as the Task 

Force deems necessary and appropriate to achieve the Equality and Tolerance Objectives and

the terms of this Settlement Agreement.

20. The Task Force will, within one year or less of the Effective Date, 

complete its initial determinations in all of the areas set forth. Thereafter, for the duration of 

the Task Force, it will be responsible for continuing the review and evaluation of all ongoing 

employment policies and practices of the Company, as well as monitoring the impact and

Doc #1356400.NY 13



effectiveness of the implementation of its determinations. The Task Force will continue during 

this time to determine revisions or modifications to ongoing employment policies and practices 

in order to achieve the Equality and Tolerance Objectives and the terms of this Settlement 

Agreement.

21. The Task Force will establish the timetable for the implementation and 

completion of compliance with any of its determinations, subject to the terms of this 

Settlement Agreement.

22. The President of the Human Resources Division will implement each 

final determination of the Task Force unless within seven business days after receiving a 

determination, Texaco files an objection with the Court that the Task Force’s determination, in 

whole or in part, involves the application of unsound business judgment or is technically not 

feasible.

23. In the event Texaco files an objection with the Court to a determination 

of the Task Force, Plaintiffs’ counsel will participate in the proceedings with the Court in 

support of the Task Force determination objected to by Texaco. All reasonable fees and 

expenses of Plaintiffs’ counsel, including reasonable expert fees and expenses, in so doing will 

be paid by Texaco.

Monitoring

24. Every six months, beginning on the Effective Date and continuing 

though the fifth anniversary (“the Monitoring Period”), the Task Force will provide to the 

Court, the Chairman, the Board of Directors, and Plaintiffs’ counsel, information which 

reflects the impact of this Settlement Agreement.

Doc #1356400.NY 14



Reporting

25. At the end of each year, the Task Force will submit a detailed report to 

the Court and Plaintiffs’ counsel, reviewing and evaluating Texaco’s employment policies and 

practices, the determinations made by the Task Force, and the impact of the actions taken in 

achieving the Equality and Tolerance Objectives and the terms of this Settlement Agreement. 

The report will also identify what remains to be done by the Task Force and by the Company, 

why it needs to be done, and a timetable for accomplishing it.

26. The work of the Task Force and the supervision of the Court will 

continue for the full Monitoring Period, five years, unless, upon good cause shown by either 

party, the period is shortened or extended by the Court.

General Provisions

27. This Settlement Agreement and any proceedings taken hereunder shall 

not in any event be construed nor be deemed to be a concession or admission by or on the part 

of Texaco of any liability or wrongdoing or evidence of the truth of any allegation made 

against Texaco in any court or legal proceeding.

28. The parties hereto agree to undertake their best efforts, including all 

steps contemplated by this Settlement Agreement, to effectuate this Settlement Agreement. In 

this connection, counsel for the Plaintiffs and Texaco will use their best efforts to effectuate 

this Settlement Agreement.

29. The parties shall have the authority to enforce any aspect, term or 

provision of this Settlement Agreement and can take appropriate measures to effectuate 

enforcement of this Settlement Agreement and any of its terms or provisions.

Doc #1356400.NY 15



30. The parties agree that notice of this Settlement Agreement shall be 

provided to members of the Class in the form agreed upon and annexed hereto as Exhibit C 

(the “Notice”). Notice shall consist of mailing the Notice to the last known address of the 

Class members. Plaintiffs’ counsel will make reasonable efforts to obtain current addresses for 

individuals whose Notices are returned undeliverable and to re-send such Notices.

31. The parties will seek entry of an order satisfactory to the parties 

dismissing all claims in the Action with prejudice and without costs to any party except as 

expressly provided herein, and incorporating the Release on behalf of all members of the Class 

and directing the entry of a final judgment (the “Dismissal Order”). Neither Plaintiffs nor 

their counsel nor any Settlement Class member shall be liable to Texaco for any court costs or 

attorneys’ fees incurred by Texaco in connection with this action.

32. At or following the hearing to approve the Settlement, Class Counsel 

shall apply to the Court for an award of attorneys’ fees and reimbursement of expenses, which 

award shall be contingent upon approval of the Settlement by the Court. The attorneys fees 

and reimbursement of expenses, as awarded by the Court, shall be paid out of the Settlement 

Fund.

33. Texaco shall have no obligation under this Settlement Agreement to pay 

any money except only as expressly set forth in this Settlement Agreement. Texaco shall not 

be liable for any of Plaintiffs’ or the Settlement Class’ costs or attorneys’ fees. In the event 

this proposed settlement is not approved by the Court, the costs incurred in notifying members 

of the Settlement Class and any other costs approved by the Court shall be paid from the 

Settlement Fund. Texaco further shall not be liable for any of the expenses of notice to the

Doc #1356400.NY 16



Settlement Class or administration of the Settlement Fund. Such expenses, as approved by the 

Court, shall be paid out of the Settlement Fund. Since Texaco’s creation of the Settlement 

Fund will fully discharge any obligation it might otherwise have for attorneys’ fees, costs, and 

expenses, the named plaintiffs waive any and all rights to payment of attorneys’ fees and costs 

directly by Texaco. Texaco agrees not to oppose the fee and expense application of Plaintiffs’ 

counsel or incentive awards for the named Plaintiffs.

34. Texaco will not object to or participate in the allocation or distribution of 

the Settlement Fund. Texaco will not oppose the application of counsel for the Settlement 

Class to serve as disbursing agent for the Settlement Fund.

35. If requested, Texaco promptly shall provide such consents as may be 

necessary to release funds from the,Settlement Fund to meet administrative expenses, as such 

releases may be approved by the Court.

36. In the event this Settlement Agreement does not become Final, this 

entire Settlement Agreement shall become null and void and of no force and effect and all 

funds in the Settlement Fund shall be returned to Texaco within ten (10) business days after 

demand upon Class Counsel therefor, less any expenses related to the cost of notice to the 

Settlement Class or other administrative costs that have been paid out of the Settlement Fund 

pursuant to this Settlement Agreement and pursuant to procedures which have been approved 

by the Court.

Doc #1356400.NY 17



Texaco’s Right To Withdraw

37. Texaco will have a right to withdraw from the Settlement if, in its 

discretion, it deems the number of class members who opt out of the Settlement to pursue their 

own claims to be substantial. Such right shall be exercised within seven calendar days 

following the date established by the Court for final receipt of written opt-out requests from 

class members.

38. The Plaintiffs and their counsel agree that, except as otherwise required 

by law, within twenty (20) days after this Settlement Agreement becomes Final, or at such 

other date agreed to by the parties, all materials produced by or discovered of Texaco or any 

of its present or former directors, officers or employees, including all copies thereof 

(collectively the “Texaco Materials”), in the possession or control of the Plaintiffs or their 

counsel, experts, consultants or agents shall be returned to Texaco. However, plaintiffs 

counsel may retain one copy of each deposition transcript. Upon Texaco s request, counsel for 

the Plaintiffs shall provide a written declaration certifying that all Texaco Materials have been 

returned.

39. Texaco will not defame any Class Representative and no Class 

Representative will defame Texaco. Nor will any Class Representative disclose confidential 

information relating to the claims and proceedings in the Action. Each Class Representative 

agrees to abide by the terms and conditions of the Protective Order entered in this Action and 

the Mediation Groundrules. Each Class Representative will use her or his best efforts to avoid 

further controversy concerning the Action.

Doc #1356400.NY 18



40. This Settlement Agreement may not be modified or amended except in

writing executed by counsel on behalf of Plaintiffs and Texaco and approved by the Court.

Doc #1356400.NY 19



41. This Settlement Agreement shall become effective upon its execution by

the undersigned counsel and may be signed in counterparts.

Dated this 21st day of January, 1997.

Michael D. Hausfeld '
Cyrus Mehri
COHEN, MILSTEIN, HAUSFELD 

& TOLL, P.L.L.C 
1100 New York Avenue, N.W. 
West Tower, Suite 500

O I C V C U  £>. O l l l g C l

BERNSTEIN LITOWITZ BERGER 
& GROSSMANN LLP 

1285 Avenue of the Americas 
New York, NY 10019 
(212) 554-1400

Richard T. Sampson
SEMMES, BOWEN & SEMMES, P.C.
250 West Pratt Street
Baltimore, MD 21201
(410) 539-5040

ATTORNEYS FOR PLAINTIFFS

KAYE, SCHOLER, FIERMAN, 
HAYS & HANDLER, LLP 

425 Park Avenue 
New York, NY 10022 
(212) 836-8000

ATTORNEYS FOR TEXACO INC.

Doc #1356400.NY 20







UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK

___________________________ — ------------------X

BARI-ELLEN ROBERTS, SH CHAMBERS,
JANET LEIGH WILLIAMS, MARSHA HARRIS,
BEATRICE HESTER .AND VERONICA SHINAULT,

Lndlvidujtlly and as 54 Civ, 2015 (CLB)
Class Representatives,

Plaintiff,

•against*

TEXACO INC.,

Defendant.

----- X

ESCROW AGREEMENT

This Agreement is made and entered into this 21st day of November, 1996, by and 

between Cohen, Milstein, Hausfeld & Toll, P.L.L.C. (as counsel for plaintiffs and the settlement 

class), Kaye, Scholer, Fierman, Hays & Handler, LLP (as counsel for defendant Texaco Inc,) and 

Citizens Bank of Maryland, a corporation organized under the laws of the State of Maryland 

(“Escrow Agent”). Escrow Agent is a State Chartered Banking Institution.

WITNESSETH

WHEREAS plaintiffs and Texaco Inc. (“Texaco") have entered into an agreement in 

principle dated November 15, 1996, to settle all claims of plaintiffs and the settlement class 

against Texaco, and

WHEREAS the agreement in principle provides, among other things, for the deposit in



escrow of SI 15,GC0,CC0 in cash by November 22, 1996;

WHEREAS plaintiffs and Texaco will seek a Final Order (as hereinafter defined) from the 

Court approving the settlement o f this action,

WHEREAS plaintiffs and Texaco intend for both Cohen, Miljtein, Hausfeld <fe Toll,

P LX.C. (“CMH&T”) and Kaye, Scholer, Fierman, Hays &  Handler, LL? (“KSFH&H”) to be 

principals under this Agreement until the entry of a Final Order by the Court, and thereafter, for 

CMH&T alone to be the principal under this Agreement; and

WHEREAS Counsel (as hereinafter defined) have entered into this Agreement to facilitate 

the consummation of the settlement of this action;

NOW, THEREFORE, in consideration of the premises and for other good and valuable 

consideration, receipt of which is hereby acknowledged, the parties agree as follows:

t • As used herein, “Final Order" shall mean the order of the Court giving final 

approval to the settlement of this action, from which no timely appeals have been taken or as to 

which all appeals have been exhausted.

2. From the date of this Agreement until the Escrow Agent receives joint written 

instructions from CMH&T and KSFH&H that the order of the Court giving final approval to the 

settlement of this action has become a Final Order, “Counsel,” as used herein, shall mean both 

CMH&T and KSFHAH; thereafter, “Counsel” shall mean solely CMH&T. When “Counsel” 

means both firms, instructions, confirmations and authorizations to or from the Escrow Agent 

must be received from or by both firms.

3. Counsel do hereby appoint, constitute and designate Citizens Bank of Maryland as 

their Escrow Agent for the purposes set forth herein, and the Bank accepts the agency created

2



under this Agreement and agrees to  p e rfo rm  the ob liga tions im posed .

4 O n  or b e fo re  N o v e m b e r  22, 1996, T exaco  will d ep o sit w ith E sc ro w  A g en t by w ire 

tra n sfe r  SI 1 5 ,0 0 0 ,0 0 0  in cash  ( th e  "E sc ro w  F und").

5 Escrow Agent shad invest the Escrow Funds in marketable direct obligations 

issued by the Federai Government of the United States of .America or issued by any agency 

thereof and backed by the frill faith and credit of the United States.

6. .Ail income earned by the Escrow Fund shall be reinvested by Escrow Agent in 

accordance with the above-referenced written instructions of Counsel and shall become a part of 

the Escrow Fund.

7 Escrow Agent is hereby authorized to transfer snd distribute fUnds from the 

Citizens Bank Trust account established for this escrow by check, wire, electronic, or internal 

process, upon receiving prior written authorization from Counsel. Such authorization may be by 

facsimile transmission or other written communication. Wire transfers shad be followed by a 

return call to Counsel for confirmation. Escrow Agent shall disburse no funds from' the Escrow 

Fund without the prior 'written authorization of Counsel. All transfers and distributions made by 

this authorization shall be governed by the Maryland Uniform Commercial Code - Funds 

Transfers (1991, ch. 548).

8. In the event of disagreement between Counsel (before joint instructions that the 

order o f approval has become a Final Order) with respect to the disbursement of funds from the 

Escrow Fund, Escrow Agent shall hold the disputed flunds until the disagreement is resolved.

9. Escrow Agent shall not be concerned with or have any responsibility for collection 

o f the Escrow Fund from Texaco, and Escrow Agent shall have no responsibility concerning

3



compliance by Counsel (before joint instructions that the order of approval has become a Final 

Order) with their duties to each other under any agreement.

1 & Any Federal, State, Municipal or local taxes due as a resuit of income earned by, 

or assets in, the Escrow Fund are to be pud from the Escrow Fund by the Escrow Agent or the 

settlement claims administrator. The Escrow Agent or the settlement claims administrator shall 

also make or file any returns or reports relative thereto, upon such confirmations from Counsel as 

it may request.

11. All signatories to this Agreement warrant that they have full and complete 

authority to enter into this Agreement and to sign said Agreement on behalf of themselves and/or 

the entity or persons they represent.

12. The annual fee for Escrow Agent for its sendees shall be four (4) basis points, with 

no annual minimum. One quarter o f the fee shall be paid at the end of each calendar quarter from 

the Escrow Fund. The fee shall be determined based upon the market value of the assets in the 

Escrow Fund at the end of the calendar quarter. Any necessary out-of-pocket expenses of 

Escrow Agent shall be paid from the Escrow Fund after ten (10) business days notice to Counsel.

13. Pursuant to national banking regulations which establish uniform standards for 

bank record keeping, trade confirmation, and other procedures with respect to securities 

transaction* made for trust departments, Counsel have the option of receiving a written 

confirmation each time a trade is executed on the Escrow Fund’s behalf within five (3) business 

days o f its execution. In the alternative, Counsel may forego receipt of individual trade 

confirmations and agree to accept a transaction statement that itemizes each trade as sufficient 

notice of trades. Escrow Agent meets the alternate confirmation requirement by providing its

4



clients with :ase statements, at least monthly, that itemize each trade effected for the client’s 

account, giving ail pertinent information relating to the transaction. Time of execution is not 

furnished, but can be provided within a reasonable time, upon 'written request. Counsel may 

waive receipt of individual trade confirmations by so indicating at the end of this Escrow 

Agreement.

14. Escrow Agent shall be entitled to rely upon the most recent instructions from 

Counsel as to the names of the persona authorized to instruct Escrow Agent. Counsel shall 

provide a list of the signamres of such authorized persons to Escrow Agent from time to time.

15. Escrow Agent shall be protected in acting upon written notice, request, waiver, 

consent, receipt or other paper document furnished to it by Counsel, not only as to its due 

execution and the validity and effectiveness of its provisions, but also as to the truth and 

acceptability o f any information contained therein, which it in good faith believes to be genuine 

and what it purports to be.

16. Escrow Agent shall have no duties except those which are expressly set forth 

herein and those imposed by law, and it shall not be bound by any notice of claim, or demand with 

respect thereto, or any waiver, modification, amendment, termination or recisioo of this 

Agreement, unless in writing received by it, and if its duties herein are affected, unless it shall have 

given prior written consent thereto.

17. Escrow Agent may resign at any time by giving a minimum of 30 business days 

prior written notice o f resignation to the parties hereto, such resignation to be effective on the 

date specified in such notice. Any assets held by Escrow Agent under the terms of this 

Agreement as of the effective date o f the resignation shall be delivered to a successor escrow

5



agent designated in writing by Counsel. If* no successor escrow agent Has been appointed as of 

the effective date of the resignation, all obligations of Escrow Agent hereunder shall nevertheless 

:ease and terminate, except that Escrow Agent’s sole responsibility thereafter shall be to keep

safely all Escrow funds held by it and to deliver the same to a person designated by Counsel or in

accordance with the direction of a final order or judgment of a court of competent jurisdiction.

18. This Agreement shall be binding upon and inure to the benefit of the respective 

heirs, legal representatives, successors and assigns of the parties hereto.

19. This Agreement will be governed by and construed in accordance with the laws of 

State of Maryland.

20. For purposes of notices, correspondence and mailing of checks, or wiring o f fluids, 

the parties’ addresses shall be:

Cohen, MUstein, Hausfeld & Toll, PL.L.C.
Attention: Michael D. Hausfeld 
1100 New York Avenue, N.W.
West Tower, Suite 500 
Washington, D.C, 20005-3964 
Telephone: (202) 408-4600 
Facsimile: (202) 408-4699

Kaye, Scholer, Fierman, Hays & Handler, LLP 
Attention: Milton J. Schubin 
425 Park Avenue
New York, New York 10022-3598 
Telephone: (212) 836-8000 
Facsimile: (212) 836-8689

Citizens Bank o f Maryland 
Attention: Donald F. Yetter 
14401 Sweitzer Lane, MS 728 
Laurel, Maryland 20707 
Telephone: (301) 206-6243 
Facsimile: (301) 206-6374

6



IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date

first sat forth above.

Michaei D. Hausfeidrlisq. 
Counsel for the Plaintiff!

KA YE, SCHOLER, FIERMAN, HA YS 
A HANDLER, LLP

Milton J. Schubin, Esq. 
Counsel for Defendant,

Texaco Inc.

CITIZENS BANK OF MARYLAND 
EscrpHUgtnt

By:
BCttaJd F. Yetter
Assistant Vice Pr

7





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UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK 
- - - - - - - - - - - - - - - - - - - -  X

BARI-ELLEN ROBERTS, SIL CHAMBERS, :
JANET LEIGH WILLIAMS, MARSHA HARRIS,
3EATRICE HESTER and VERONICA SHINAULT, :

Individually and as
Class Representatives, : 94 Civ. 2015 (CLB)

Plaintiffs,

- against - 

TEXACO INC.,
Defendant.

- - - - - - - -  X

PLAN OF ALLOCATION

1. After deduction of attorneys' fees, costs and 

reimbursement of expenses, including expert fees and expenses, 

awards to the Class representatives and other administrative 

expenses, as approved by the Court, the balance of the Settlement 

Fund (the "Net Settlement Fund") shall be distributed to Class 

members in the manner and subject to the conditions set forth 

below.
2. After consultation with various experts who advised

Class Counsel as to a fair, equitable, uniform and efficient plan 

of allocation, Class Counsel has determined that the distribution 

of the Net Settlement Fund will be based on the following four 

factors: (1) Existence -- employment by Texaco at any time during
the Class Period1 (which assures that every Class member will 

receive compensation from the Net Settlement Fund); (2) Earnings 1

1 The Class Period is defined as the period from March
23, 1991 through November 15, 1996, inclusive.



-- the total earnings of the Class member from Texaco during the 
Class Period; (3) Disparity -- the difference between the actual 

earnings from Texaco and estimated expected earnings of the Class 

member had race not been a factor during the Class Period, as 

calculated by plaintiffs' expert; and (4) Time -- the length of 

salaried employment by Texaco of the Class member during the 

Class Period. For purposes of the Plan of Allocation, only 

salaried employment at Texaco will be considered in calculating 

each of the above factors.
3. Each of Time, Earnings and Disparity will be 

implemented in a proportionate manner. Earnings and Disparity 

will be obtained for each Class member for each year and summed 

over years to obtain a total disparity2 and total earnings for 

each Class member.
4. Existence: Each Class member will receive $2,000 from

the Net Settlement Fund for the Existence factor. This will 

account for approximately $2,700,000 of the Net Settlement Fund.
5. Earnings and Disparity: Approximately $23,000,000 of

the Net Settlement Fund will be distributed on the basis of 
Earnings and Disparity. In order to accomplish this, a Disparity 

Proportion will be computed for each Class member3 as the ratio

2 Negative disparities will be treated as such except 
that negative total disparities will be treated as zero (over the 
entire Class Period).

3 If information appropriate to ascertain a disparity 
for a Class member for a particular year is not available, then 
that individual will be considered to have a disparity for that 
year equal to the mean of the negative disparities, and zero 
disparities for those with positive disparities.

2



of the Class member's total Disparity during ■d tohe Class Peri

the sum of the total Disparities of all'Class members during the 

Class Period. Similarly, an Earnings Proportion will be computed 
for each Class member as the ratio of the Class member's total 

Earnings during the Class Period to the sum of the total Earnings 

of all Class members during the Class Period. A Weighted Average 

of the Disparity Proportion and the Earnings Proportion will be 

computed for each Class member as 3/4ths of the Disparity 

Proportion added to l/4th of the Earnings Proportion. Each Class 
member will receive a payment from the $23,000,000 portion of the 

Net Settlement Fund equal to his or her Weighted Average 

multiplied by $23,000,000.
6. Time: The remainder of the Net Settlement Fund will be

distributed in a proportionate manner according to the Time 

factor. To accomplish this, each Class member will be considered 

as starting employment at Texaco either on the date of their hire 

or on March 23, 1991 (the first day of the Class Period), 
whichever is later. Each Class member will be considered to have 

ended employment at Texaco either on their last day of employment 

or November 15, 1996 (the last day of the Class Period), 

whichever is earlier. This amount of time (in total days) will 

be divided by the corresponding total time employed, in days, for 

all Class members to arrive at a Time Proportion for each 

individual. Each Class member will receive a payment equal to 

his or her Time Proportion multiplied by the remainder of the Net 

Settlement Fund.

3



7. Within two weeks after the Court enters an order 
approving the Settlement, Class Counsel will send each Class 
member by first-class mail, postage prepaid, written notification 

of the Class member's individual factors (the "Individual 

Factors") that will be used to determine the distribution that 

the Class member will receive from the Settlement Fund, including 

the Class member's (1) length of service at Texaco during the 

Class Period according to records provided to Class Counsel by 
Texaco and (2) total earnings at Texaco during the Class Period 

according to Texaco records provided to Class Counsel by Texaco. 
Each member of the Settlement Class will then have two weeks from 
the date of mailing to notify Class Counsel in writing about any 

disagreement with Texaco's records and to provide any available 

supporting documentation (the "Notification Date"). Class 

Counsel will attempt to resolve any such disputes through 

consultation with Texaco's Human Resources Department. _ However, 

to the extent that any disputes cannot be resolved through such 

consultation, all outstanding disputes will be collectively 

submitted to the United States Magistrate Judge within ten days 

of the Notification Date. The Magistrate Judge's determination 

as to the Individual Factors will be final and binding on all 

parties.

4





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UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK

BARI-ELLEN ROBERTS, SIL CHAMBERS,
JANET LEIGH WILLIAMS, MARSHA HARRIS, 
BEATRICE HESTER and VERONICA SHINAULT, 

Individually and as 
Class Representatives,

Plaintiffs,

94 Civ. 2015 (CLB)

- against - 

TEXACO INC.,
Defendant.

- - - - - - - - - - - - - - - - - - - - X
NOTICE OF PENDENCY OF CLASS ACTION,

PROPOSED SETTLEMENT AND FAIRNESS HEARING

TO: ALL AFRICAN-AMERICANS EMPLOYED IN A SALARIED POSITION
SUBJECT TO THE TEXACO MERIT SALARY PROGRAM IN THE UNITED 
STATES BY TEXACO INC. ("TEXACO") OR ITS SUBSIDIARIES AT ANY 
TIME FROM MARCH 23, 1991 THROUGH NOVEMBER 15, 1996,
INCLUSIVE (THE "SETTLEMENT CLASS").
PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY. YOUR 
RIGHTS WILL BE AFFECTED BY PROCEEDINGS IN THIS LITIGATION.

1. NOTICE IS HEREBY GIVEN, pursuant to Rule 23 of the 
Federal Rules of Civil Procedure and an Order of the United 

States District Court for the Southern District of New York, 
dated January 22, 1997, that a hearing will be held before the 
Honorable Charles L. Brieant in a Courtroom of the United States 

District Court for the Southern District of New York, 300 

Quarropas Street, White Plains, New York, at 9:00 a.m. on 
Tuesday, March 18, 1997 (the "Fairness Hearing") to determine 
(1) whether a proposed settlement (the "Settlement") of the 

above-entitled litigation, (the "Action") as set forth in the



Stipulation and Settlement Agreement dated January __, 1997 (the

"Settlement Agreement"), is fair, reasonable, adequate, and 
should be approved; (2) whether a final judgment should be 
entered dismissing the Action on the merits, with prejudice and 

without costs; (3) whether the plan proposed for allocating and 

distributing the Net Settlement Fund is fair and reasonable and 

should be approved; (4) whether an award of attorneys' fees, 
costs and reimbursement of disbursements should be made to Class 
Counsel; and (5) whether Incentive Awards should be made to the 
named plaintiffs. You may but are not required to attend the 
Fairness Hearing in order to receive your share of the 

Settlement.

I.

BACKGROUND OF THE ACTION
2. On March 23, 1994, a class action complaint was filed 

in the United States District Court for the Southern District of 
New York (the "Court") by plaintiffs Bari-Ellen Roberts and Sil 
Chambers against defendant Texaco, which alleged that certain 
Texaco employment policies and practices had a disparate impact 

on the individual plaintiffs and the Class alleged in the 
Complaint in violation of Section 1981 of the Civil Rights Act of 
1971, as amended in 1991, 42 U.S.C. § 1981 ("Section 1981"), and 

Section 296 of the New York Human Rights Law, N.Y. Exec. Law. § 
296 ("Section 296"). On June 30, 1994, plaintiffs filed a First 
Amended Complaint (the "Amended Complaint"), which, among other

2



things, added claims on behalf of individual plaintiffs Janet 
Williams, Marsha Harris, Beatrice Hester and Veronica Shinault 
and the Class alleged in the Complaint and asserted claims 

arising under Title VII of the Civil Rights Act of 1964, as 

amended in 1991, 42 U.S.C. §§ 2000e, et seg ("Title VII").

3. The Amended Complaint alleges that, beginning no later 

than March 23, 1991, certain Texaco employment policies and 
practices had a disparate impact on salaried African-American 
employees in promotions, compensation and the terms and 
conditions of their employment, including training and job 
assignments. On July 15, 1994, Texaco answered the Amended 

Complaint, denying any and all alleged wrongdoing or liability.
4. On May 15, 1995,' plaintiffs moved for class 

certification under Section 1981 and Section 296. In connection 

with discovery related to class certification issues, plaintiffs 

reviewed thousands of documents, including Texaco's Affirmative 

Action Plans, performed detailed statistical analyses of the 

promotion and compensation rates of Texaco's African-American and 
Caucasian employees, and obtained, in addition to the testimony 
of the six named plaintiffs, declarations from thirty individuals 
regarding alleged racial discrimination at Texaco. During class 

discovery more than forty fact and expert witnesses were deposed. 

Further, plaintiffs obtained expert reports from three 
independent experts in support of class certification. In August 

1996, plaintiffs moved to add Title VII claims to the class

3



motion. The Court granted this motion and set the entire class 
motion to be heard on December 6, 1996.

5. Texaco denies any and all fault, wrongdoing or 
liability whatsoever, and maintains that there is no substance to 

any of the allegations made against it in the Action, and 

desires, by settlement of all controversies between it and 

plaintiffs and the Settlement Class, to avoid the expense, 
inconvenience, distraction and delay of further litigation.

II. SETTLEMENT CLASS
6. For purposes of the proposed Settlement, the parties 

have stipulated to and the Court has, by Order dated January 22, 

1997, certified the following Settlement Class:
All African-Americans employed in a salaried 
position subject to the Texaco Merit Salary 
Program in the United States by Texaco or its 
subsidiaries at any time from March 23, 1991 
through and including November 15, 1996.

For purposes of this Settlement, African-Americans means persons 

who, pursuant to the EEOC's Race/Ethnic Identification form, 
designated themselves to Texaco as "Black". Also for purposes of 

this Settlement, "subsidiaries" shall mean entities in which 

Texaco Inc. has, directly or indirectly, more than a 50% 
ownership interest. Employees whose salaried position was not 

subject to the Texaco Merit Salary Program are not within the 
Settlement Class. Please note: even if you signed a release of

4



claims in exchange for receiving an enhanced severance package 

from Texaco, you are still entitled to participate in’ this 
Settlement.

7. For purposes of this Settlement, the Court has 

certified plaintiffs Chambers, Williams, Harris, Hester and 

Shinault as Class representatives and has appointed Michael D. 

Hausfeld and Cyrus Mehri of Cohen, Milstein, Hausfeld & Toll, 

P.L.L.C. and Daniel L. Berger and Steven B. Singer of Bernstein 
Litowitz Berger & Grossmann LLP as Class Counsel.

8. The Court has certified the Settlement Class under both

Fed. R. Civ. P. 23 (b)(2) and 23 (b)(3). With respect to
equitable and injunctive relief to be provided by this Settlement 

to the Settlement Class, including the creation of the Equality 

and Tolerance Task Force described below, the Court certified the 

Settlement Class under Fed. R. Civ. P. 23(b)(2) and, if the 
Settlement is approved by the Court, all such relief will be 

binding on all Class members, whether or not they opt-out. With 

respect to the monetary consideration to be provided the 
Settlement Class, including both the distribution from the Net 
Settlement Fund and the Salary Increase described below, the 

Court certified the Settlement Class under Fed. R. Civ. P.
23(b)(3), and Class members have the right to opt-out of the 
monetary aspects of the Settlement and pursue their individual 

claims.

5



III.
FACTORS LEADING TO THE PROPOSED SETTLEMENT

9. Plaintiffs, through their counsel, have made a thorough 
investigation into the facts and circumstances relevant to the 
claims alleged in the First Amended Complaint (the "Class 

Claims"). In connection with that investigation, they have 

conducted substantial discovery, including inspecting thousands 
of pages of documents produced by Texaco, interviewing dozens of 

witnesses, and taking numerous depositions. Plaintiffs retained 
and consulted with various experts, including an expert in the 

statistical analysis of the impact of employment practices; an 
industrial psychologist; and a former director of the Office Of 

Federal Contract Compliance Programs, an expert in employment 

practices. Each expert prepared a report in support of 

plaintiffs' motion for class certification and was deposed by 

Texaco's counsel. Class Counsel also deposed Texaco's experts. 

Class Counsel have considered the expense and length of time 
necessary to complete an extensive, multi-track deposition and 
expert discovery program and to prosecute this action through 

trial; the uncertainties of the outcome of this complex 
litigation; the likely appeal after trial of any judgment, 
resulting in many years of additional litigation; and the 
substantial benefit provided by the proposed Settlement to the 

Settlement Class. Plaintiffs have also considered that the 

Settlement was arrived at only after extensive negotiations, in 
which plaintiffs Roberts and Chambers directly participated.

6



Based upon these considerations, Class Counsel have concluded 

that it is in the best interests of the Settlement Class to 
settle this Action on the terms set forth herein.

10. Texaco, while denying all wrongdoing of any kind 

whatsoever and denying any liability to plaintiffs or the 

Settlement Class, and relying on the provisions of the Settlement 

Agreement that the Settlement shall in no event be construed or 

deemed to be evidence, or an admission, or a concession on the 

part of Texaco, of any fault or liability whatsoever, and without 
conceding any infirmity in the defenses it has asserted or 

intended to assert against the Class Claims, considers it 
desirable that this Action be dismissed on the terms set forth 

herein in order to avoid further expense, to dispose of 

burdensome and protracted litigation and undue distractions and 

to terminate all controversy concerning the Action.

IV.
SUMMARY OF THE TERMS OF THE PROPQ8ED SETTLEMENT

11. The Settlement provides for monetary and programmatic 

relief which Class Counsel estimate is worth approximately $176 

million. Class Counsel believe the Settlement is the largest in 

the history of employment race discrimination litigation.
12. The Settlement comprises the following monetary relief

under Fed. R. Civ. P. 23(b)(3):
A. A payment by Texaco of $115,000,000 in cash, which 

was deposited on November 22, 1996 with a Settlement Escrow

7



agent, plus the interest on that sum which has been accruing 
since November 22, 1996 (collectively, the "Settlement Fund").
Class Counsel may draw on or seek reimbursement from the 

Settlement Fund to pay the costs of notice to the Settlement 

Class, plus income taxes, if any, which may be due on income 

earned or other applicable taxes. The Settlement Fund will be 

used to pay (1) all Class members' claims for compensation and 

damages; (2) all costs of Notice of the Settlement; (3) all 
administrative costs of the Settlement; (4) all amounts awarded 
by the Court for attorneys' fees, costs and expenses of the 
litigation; and (5) any Incentive Awards to the named plaintiffs.

B. When this Settlement becomes Final, each Class 

member then employed by Texaco who was so employed on November 

15, 1996, will receive an 11.34% increase over such employee's 

November 15, 1996 base annual salary retroactive to January 1,

1997 (the "Salary Increase"). This percentage represents, as of 

November 15, 1996, an aggregate annual salary increase of
$4,000,000. Class Counsel expect the Salary Increase to 
approximate $26 million over 5 years. The Salary Increase shall 
be in addition to, and not in lieu or replacement of, any other 

pay increase any member of the Settlement Class would receive in 

1997 in the ordinary, customary or usual course of employment. 
Within 30 days after the Settlement becomes Final, the portion of 
the Salary Increase accrued from January 1, 1997 to the date of 

payment will be paid to each such employee. Any Class member 

employed at Texaco on January 1, 1997, who did not voluntarily

8



leave Texaco but whose employment was terminated by Texaco prior 
to such date of payment, will be paid on such date the portion of 

the Salary Increase applicable to that employee's actual period 
of employment after January 1, 1997.

13. The Settlement is comprised of the following equitable 

and injunctive relief under Fed. R. Civ. P. 23(b)(2):

A. Texaco affirms the following "Statement of

Equality and Tolerance Objectives":
Texaco Inc. is affirmatively committed to the 
fullest extent to an environment of 
inclusion: to eradicate all forms of 
prejudice within the company; to promote and 
foster complete equality of job opportunities 
within the company to all applicants and 
employees regardless of race, gender, 
religion, age, national origin and 
disability, and to ensure tolerance, respect 
and dignity for all people.
B. Plaintiffs and Texaco will create an independent 

Equality and Tolerance Task Force (the "Task Force") to determine 

revisions and additions to Texaco's current human resources 
programs and to oversee, in conjunction with Texaco's President 
of the Human Resources Division, the implementation by Texaco of 

the human resources program changes agreed to or resulting from 

the terms of the Settlement. Class Counsel estimate that the 

Task Force and the changes it will implement will cost 
approximately $35 million over 5 years. The Task Force will 
consist of three Texaco appointees, three plaintiffs' appointees, 
and one independent appointee agreed to by the parties who serves 
as Chairperson. The Court will approve the nominees to the Task 

Force. When vacancies occur, the parties shall have the
9



authority to replace the Task Force members they selected and to 

jointly select a new Chairperson, subject to Court approval. 

Texaco will provide all funding necessary to fulfill the work of 
the Task Force, including the reasonable compensation of the Task 
Force members, and the cost of reasonable staff, consultants, 

statisticians, and other appropriate experts.

C. Within the first six months after final approval of 

the Settlement, Texaco will:
o Adopt and implement a company-wide diversity and 

sensitivity training program;
o Adopt and implement a company-wide mentoring 

program;
o Insure that Equal Employment Opportunity ("EEO") 

and Diversity Performance is included in 
management objectives and in determining 
management compensation;

o Develop and implement an ombudsperson program;

o Implement national job posting through at least 
pay grade 18, and commence evaluation of posting 
at higher grade level positions; and

o Develop recommendations for the creation and
implementation of a mechanism to minimize the fear 
of retaliation in connection with complaints of 
employment discrimination.

The Task Force will review all of these initiatives.

D. During this first six month period, the Task Force 

will, among other things:
o Evaluate and revise or replace the Performance 

Management Program ("PMP") including the PMP 
Appeal Process to ensure that the Program 
accurately measures employee performance and, 
among other things, that the standards for 
performance objectives are specific, measurable, 
achievable, relevant, time-bound and documented.

10



o Evaluate and revise or replace the promotion and 
employee development process, including High 
Potential List procedures, including making known 
to all employees objective Promotability Criteria;

o Develop and implement centralized monitoring of 
employee compensation to ensure no disparate 
treatment or impact based on race which is not 
job-related and/or consistent with business 
necessity. Review appropriate data to ensure 
against unfairness which is not job-related and/or 
consistent with business necessity. Data may be 
furnished in such a form as to protect the 
identity of individuals.

E. The Task Force will review and revise, as appropriate, 

Texaco's policies and practices for recruitment, hiring, 
training, opportunities, assignments, and promotion.

F. The Task Force will establish the timetable for the 

implementation and completion of compliance with any of its 

determinations, subject to the terms of the Settlement Agreement. 

The President of Texaco's Human Resources Division will implement 

each final determination of the Task Force, unless Texaco files 

an objection to the Court and the Court determines that such 
final determination constitutes in whole or in part unsound 
business judgment or is technically not feasible. In the event 

Texaco files an objection with the Court to a determination of 

the Task Force, Class Counsel will participate in the 
proceedings. All reasonable fees and expenses in so doing, 
including reasonable expert fees and expenses, will be paid by

Texaco.
G. Every six months for five years ("the Monitoring 

Period"), the Task Force will provide to the Court, the Texaco 
Chairman and Board of Directors, and Class Counsel, information

11



which it considers to reflect the impact of the Settlement. In 
addition, the Task Force will submit a detailed annual report 
("Annual Report") during the Monitoring Period to the Court, the 
Texaco Chairman and Board of Directors, and Class Counsel, on the 

impact of its actions in achieving the Equality and Tolerance 

Objectives and the terms of the Settlement.

14. All proceedings with respect to the Settlement 

described by this Notice and the determination of all 
controversies relating thereto, including disputed guestions of 
law and fact with respect to the validity of claims, will be 

subject to the jurisdiction of the Court.

V.
THE PLAN OF ALLOCATION

15. After deduction of attorneys' fees, costs and 

disbursements including expert fees and expenses, awards to the 

Class representatives and other administrative expenses, as 
approved by the Court, the balance of the Settlement Fund (the 

"Net Settlement Fund") shall be paid to Class members in the 

manner and subject to the conditions set forth below.
16. After consultation with various experts who advised

Class Counsel as to a fair, equitable, uniform and efficient plan 

of allocation (the "Allocation Plan" or "Plan of Allocation"), 

Class Counsel have determined that the distribution of the Net 
Settlement Fund will be based on the following four factors: (1)
Existence —  employment by Texaco at any time during the period

12



from March 23, 1991 through November 15, 1996, inclusive (the
"Class Period"); (2) Earnings —  the total earnings of the Class
member from Texaco during the Class Period; 3) Disparity -- the 
difference between the actual earnings from Texaco and the 

estimated expected earnings of the Class member had race not been 

a factor during the Class Period, as calculated by plaintiffs' 

expert; and (4) Time —  the length of service of the Class member 

during the Class Period.
17. Existence: This factor ensures that every Class member

will receive compensation from the Net Settlement Fund. Each 
Class member will receive $2,000 from the Net Settlement Fund for 

the Existence factor. This will account for approximately 

$2,700,000 of the Net Settlement Fund.

18. Earnings and Disparity: Approximately $23,000,000 of

the Net Settlement Fund will be distributed on the basis of 
Disparity and Earnings. In order to accomplish this, a Disparity 

Proportion will be computed for each Class member as the ratio of 
the Class member's total Disparity during the Class Period to the 

sum of the total Disparities of all Class members during the 
Class Period. Similarly, an Earnings Proportion will be computed 

for each Class member as the ratio of the Class member's total 
Earnings during the Class Period to the sum of the total Earnings 
of all Class members during the Class Period. A Weighted Average 

of the Disparity Proportion and the Earnings Proportion will be 

computed for each Class member as 3/4ths of the Disparity 
Proportion added to l/4th of the Earnings Proportion. Each Class

13



member will receive a payment from the $23,000,000 portion of the 
Net Settlement Fund equal to the Class member's Weighted Average 
multiplied by $23,000,000.

19. Time: The remainder of the Net Settlement Fund will be

distributed in a proportionate manner according to the Time 

factor. To accomplish this, each Class member will be considered 

as starting employment at Texaco either on the date of his or her 

hire or on March 23, 1991 (the first day of the Class Period),
whichever is later. Each Class member will be considered to have 
ended employment at Texaco either on his or her last day of 

employment or November 15, 1996 (the last day of the Class
Period), whichever is earlier. This amount of time (in total 

days) will be divided by the corresponding total time employed 

(in days) for all Class members to arrive at a Time Proportion 

for each individual. Each Class member will receive a payment 

equal to the Class member's Time Proportion multiplied by the 

remainder of the Net Settlement Fund.
20. Within two weeks after the Court enters an order 

approving the Settlement, Class Counsel will send each Class 
member by first-class mail, postage prepaid, written notification 
of his or her individual factors that will be used to determine 
the distribution that he or she will receive from the Settlement 
Fund, including his or her (1) length of service at Texaco during 

the Class Period according to records provided to Class Counsel 

by Texaco and (2) total earnings at Texaco during the Class 
Period according to records provided to Class Counsel by Texaco

14



(the "Individual Factors"). Each member of the Settlement Class 
will then have two weeks from the date of mailing to notify Class 

Counsel in writing (the "Notification Date") about any 
disagreement with Texaco's records of his or her Individual 
Factors and to provide supporting documentation. Class Counsel 

will attempt to resolve any such disputes through consultation 

with Texaco's Human Resources Department. However, to the extent 
that any disputes cannot be resolved through such consultation, 
all outstanding disputes will be collectively submitted to the 
United States Magistrate Judge within ten days of the 
Notification Date. The Magistrate Judge's determination as to 

the Individual Factors will be final and binding on all parties.

21. If you have any questions concerning the Plan of 

Allocation, you may call toll-free at 1-800-914-4722.

VI.
TAX CON8EOPENCE8

EACH CLASS MEMBER IS ADVISED TO CONSULT HIS OR HER OWN TAX 
ADVISOR REGARDING THE TAX CONSEQUENCES OF RECEIVING A CASH 

BENEFIT FROM THIS SETTLEMENT.
22. Class Counsel have retained experienced tax counsel who 

have advised that, as a result of a recent amendment to the 
Internal Revenue Code, all distributions from the Net Settlement 

Fund to the Class members may be subject to federal income 
taxation and may also be subject to applicable state and/or local 

taxation.

15



23. It is presently contemplated that tax counsel retained 
by Class Counsel on behalf of the Settlement Class will seek a 
private letter ruling from the Internal Revenue Service on behalf 

of Class members regarding the issue of whether distributions 

from the Net Settlement Fund or a portion thereof constitutes 

"wages” for purposes of the Federal Insurance Contributions Act 

("FICA"), the Federal Unemployment Tax Act ("FUTA") and federal 

income tax rules regarding the withholding of tax at the source 
of payment. To the extent a portion of the distributions from 
the Net Settlement Fund is deemed by the IRS to constitute 
"wages," some portion of the Net Settlement Fund will be used to 
pay the applicable FICA tax and FUTA tax. Consequently, it is 

contemplated that a portion of the Net Settlement Fund will be 

withheld pending receipt from the Internal Revenue Service of 

this letter ruling to pay the applicable FICA taxes and FUTA 

taxes. In such event, a second distribution may be made of any 

previously withheld funds that, consistent with the Internal 
Revenue Service's ruling, is not needed to pay the applicable 

FICA tax and FUTA tax.
VII.
EEOC

24. Texaco reached a settlement agreement with the Equal 

Employment Opportunity Commission ("EEOC") on January 3, 1997, 
which is contingent upon final approval of this Settlement. The 

settlement agreement between Texaco and the EEOC provides, among 
other things, that the EEOC will have certain rights to receive

16



information, to monitor this Settlement, and to participate in 
court proceedings related to this Settlement after the Settlement 
becomes effective. The settlement agreement between Texaco and 
the EEOC has been filed with the other papers in the Action and 
may be inspected at the Office of the Clerk of the United States 

District Court, United States Courthouse, 300 Quarropas Street, 

White Plains, New York, during business hours of each business 

day.

VIII.
CLASS MEMBER RIGHTS AND OBLIGATIONS

25. TO RECEIVE ANY PAYMENTS FROM THE NET SETTLEMENT FUND OR 

TO BENEFIT FROM THE SALARY INCREASE, YOU DO NOT NEED TO TAKE ANY 

ACTION.
26. YOU MAY, IF YOU CHOOSE, EXCLUDE YOURSELF ("OPT-OUT") 

FROM THE MONETARY RELIEF PORTION OF THE SETTLEMENT, WHICH 

INCLUDES YOUR SHARE OF THE NET SETTLEMENT FUND AND SALARY 
INCREASE. THIS WILL LEAVE YOU FREE TO PURSUE ANY CLAIM(S) YOU 
MAY HAVE UNDER APPLICABLE LAW FOR INDIVIDUAL MONETARY RELIEF OR 
DAMAGES RESULTING FROM YOUR EMPLOYMENT AT TEXACO. IF YOU WISH TO 
OPT-OUT, YOUR REQUEST, MADE IN WRITING, MUST BE SENT OR DELIVERED 

SO THAT IT IS RECEIVED AT THE FOLLOWING ADDRESS BY NO LATER THAN 

MARCH 4, 1997:
TEXACO CLASS ACTION DISCRIMINATION LITIGATION 
c/o Bernstein Litowitz Berger & Grossmann LLP

P.O. Box 5141 
New York, NY 10185-5141

17



Any Class member who opts-out shall not be bound by the monetary 
portion of this settlement, and will not receive any distribution 
from the Net Settlement Fund and will not receive any Salary 

Increase, but may still pursue any individual claims for monetary 

relief. Class members who do not opt-out will release their 

claims as defined below in exchange for both their share of the 

Net Settlement Fund and their Salary Increase, if applicable.

27. TEXACO BELIEVES ALL CLASS MEMBERS SHOULD FEEL 
ABSOLUTELY FREE TO BENEFIT FROM THE SETTLEMENT AND SHOULD NOT 
MISTAKENLY BELIEVE THAT TEXACO PREFERS THAT CLASS MEMBERS OPT- 
OUT. Unless a Class member intends to pursue a separate 
employment discrimination claim against Texaco arising prior to 

November 16, 1996, Texaco-knows of no reason for a Class member 

to opt-out.
28. Any member of the Settlement Class who has not 

requested exclusion may, but need not, enter an appearance in 

this action at his own cost through counsel of his own choice.

If the Class member does not enter an appearance, he or she will 
be represented by Class Counsel in the Action as set forth in the 

Settlement Agreement.
29. Any member of the Settlement Class may, but need not, 

appear at the Fairness Hearing in person or through counsel and 
be heard as to why the proposed settlement of the Action and the 

Plan of Allocation should or should not be approved as fair, 

reasonable and adequate, why a judgment should or should not be 

entered thereon, why Class Counsel should or should not be

18



awarded attorneys' fees, costs, and disbursements, as requested, 
and why the named plaintiffs should or should not be awarded 
Incentive Awards; provided. however, that no member of the 

Settlement Class shall be heard or entitled to contest the 

approval of the terms and conditions of the proposed Settlement, 

the judgment to be entered thereon approving the same, or the 

fees, costs and disbursements requested, unless that person has 
sent or delivered written objections and copies of any supporting 
papers and briefs (which must contain proof of membership in the 
Settlement Class) to Counsel described below, and such objections 
and supporting papers have been received by no later than March 

4, 1997:
Michael D. Hausfeld, Esq.

Cyrus Mehri, Esq.
COHEN, MILSTEIN, HAUSFELD & TOLL, P.L.L.C.

1100 New York Avenue, N.W.
Washington, D.C. 20005

Daniel L. Berger, Esq.
Steven B. Singer, Esq.

BERNSTEIN LITOWITZ BERGER & GROSSMANN LLP 
1285 Avenue of the Americas
New York, New York 10019
Plaintiffs' Class Counsel 

-and-
Milton J. Schubin, Esq.

KAYE, SCHOLER, FIERMAN, HAYS & HANDLER, LLP 
425 Park Avenue

New York, New York 10022
Attorneys for Defendant Texaco Inc. 

and has filed said objections, papers, and briefs (showing due 

proof of service upon said Counsel) with the Clerk of the United

19



States District Court for the Southern District of New York, 300 

Quarropas Street, White Plains, New York.
30. Any member of the Settlement Class who does not make 

his or her objection in the manner provided shall have waived 
such objection and shall forever be foreclosed from making any 

objection to the fairness, adequacy or reasonableness of the 

proposed Settlement and Allocation Plan, to the award of 

attorneys' fees, or to the award of Incentive Awards to the named 

plaintiffs.

IX.
RELEASE OF CLAIMS & COVENANT NOT TO SOE

3 1 . The Settlement Agreement contains the following

release: when this Settlement Agreement becomes Final, each

member of the Settlement Class who does not opt-out will have 

released Texaco from, and have covenanted not to sue it on, any 

and all claims under federal or state law that have been, or 
could have been, asserted against Texaco arising out of or 
relating to claims of employment discrimination (including 
retaliation) or disparate treatment or impact in his or her 

employment by Texaco prior to November 16, 1996, including any 
claim for discrimination on the basis of age, disability, gender, 

national origin, race, religion or any other factor or protected 

classification (the "Settled Claims").
32. If this Settlement is approved by the Court, any and 

all Settled Claims shall be dismissed with prejudice.

20



33. Texaco will have a right to withdraw from the 

Settlement if a substantial number of Class members opt-out of 
the Settlement to pursue their own claims. Such right shall be 
exercised, solely within the discretion of Texaco, within seven 
calendar days following the end of the opt-out period.

X.
INDIVIDUAL BENEFITS

34. Texaco has agreed, in its discretion and without regard 
to whether the Settlement is approved, to accommodate certain 

requests from two of the Class representatives. Plaintiff Harris 
has transferred from Texaco's office in California to one in 

Texas; plaintiff Chambers is availing himself of Texaco's 

Executive on Loan program with a mutually agreed upon not-for- 

profit organization. Separately, plaintiff Roberts, who is not a 

Class representative, is voluntarily leaving employment at Texaco 

and will receive a severance package in connection therewith.

XI.
APPLICATIONS FOR ATTORNEYS' FEES,

COSTS AND DISBURSEMENTS AND INCENTIVE AWARDS
35. If the Settlement is approved by the District Court, 

Class Counsel intend to apply to the District Court for an award 

of attorneys' fees in an amount not to exceed 25% of the $115 
million Settlement Fund, plus interest accrued thereon, and for 
an award of reimbursement for out of pocket costs and disburse­

ments, including expert fees, tax counsel fees, and other
21



expenses. Class Counsel will not seek an award of attorneys' 

fees for any other portion of the Settlement, including the 
Salary Increase that Class Counsel estimates to be worth $26 
million, and the creation of the Task Force that Class Counsel 
estimates to be worth $36 million. Accordingly, Class Counsel's 

application for an award of attorneys' fees will be for 

approximately 16.3% of the $176.1 million total value of the 

Settlement. Any amounts awarded by the Court for fees and costs 
will be paid out of the Settlement Fund. As part of the 
Settlement, the Class representatives and the Settlement Class 
expressly waive any claim or right to any statutory award of 
attorneys' fees. The Settlement Fund may be further reduced by 

the cost of notice and other administrative expenses as approved 

by the Court. Further, the named plaintiffs in the Action will 

seek a court award of incentive payments for undertaking 
representation of the Settlement Class, and assistance provided 

to Class Counsel in the course of the litigation, in an amount 
not to exceed $200,000 each for plaintiffs Sil Chambers and Bari- 
Ellen Roberts and not to exceed $100,000 each for plaintiffs 
Marsha Harris, Veronica Shinault, Janet Williams and Beatrice 

Hester.

XII.
EXAMINATION OP PAPERS AND INQUIRIES

36. The foregoing is only a summary of the litigation and 

the proposed Settlement and does not purport to be all-

22



encompassing. For a more detailed statement of the matters
involved in the Action and the proposed Settlement, you may refer
to the pleadings, the Settlement Agreement and the other papers
filed in the above Action, which may be inspected at the Office

of the Clerk of the United States District Court, United States

Courthouse, 300 Quarropas Street, White Plains, New York, during

business hours of each business day.
37. All inquiries by members of the Settlement Class may be

directed in writing to:
TEXACO CLASS ACTION DISCRIMINATION LITIGATION 

Bernstein Litowitz Berger & Grossmann LLP 
1285 Avenue of the Americas 

New York, NY 10019

Or, if you wish, you may call toll-free at 1-800-914-4722. 

Inquiries should not be directed to the Clerk of the Court or to 

the Judge.
Dated: January __, 1997 By Order of the Court

Honorable Charles L. Brieant 
United States District Court 
Southern District of New York

23



u^
i.

r

MAR-13-1997 16=10 FROM C BRIEANT DJ SNV TO 912122267592 P.01/01

UNITED STATES D ISTR IC T COURT
FOR THE SOUTHERN D ISTR IC T OF NEW YORK

BARI-ELLEN ROBERTS, SIL 
CHAMBERS, JANET LEIGH WILLIAMS, 
MARSHA HARRIS, BEATRICE HESTER 
AND VERONICA SHINAULT,,

0,. Plaintiffs,
-against -

TEXACO INC.,

Defendant.

MOTION FOR LEAVE TO FILE MEMORANDUM AMICUS CURIAE 
IN SUPPORT OF SETTLEMENT AGREEMENT

The NAACP Legal Defense and Educational Fund, Inc., moves for 
leave to file the attached Memorandum Amicus Curiae in Support of 

the Settlement Agreement in this case. The interest of the Amicus 
is sec out in the Memorandum. Amicus has long experience in the 

bringing and settling of class actions in employment discrimination 
cases. We believe that the proposed settlement agreement is
innovative and will be highly effective as a model for ending 

systemic discrimination in employment discrimination cases. We 
believe that our views will be of benefit to the Court in 

determining the fairness, reasonableness, and adequacy of the 
settlement.

<Y7».a S*k k ,

94  C i v .  2 0 1 5  (CLB)

MAR 13 ’97 16=06 914 390 4085
TOTAL P.01 

PAGE.01



UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK

BARI-ELLEN ROBERTS, SIL 
CHAMBERS, JANET LEIGH WILLIAMS, 
MARSHA HARRIS, BEATRICE HESTER 
AND VERONICA SHINAULT,,

Plaintiffs,

-against-
94 Civ. 2015 (CLB)

TEXACO INC. ,

Defendant.

MOTION FOR LEAVE TO FILE MEMORANDUM AMICUS CURIAE 
IN SUPPORT OF SETTLEMENT AGREEMENT

The NAACP Legal Defense and Educational Fund, Inc., moves for 

leave to file the attached Memorandum Amicus Curiae in Support of 

the Settlement Agreement in this case. The interest of the Amicus 

is set out in the Memorandum. Amicus has long experience in the 

bringing and settling of class actions in employment discrimination 

cases. We believe that the proposed settlement agreement is
innovative and will be highly effective as a model for ending 

systemic discrimination in employment discrimination cases. We 

believe that our views will be of benefit to the Court in 

determining the fairness, reasonableness, and adequacy of the
settlement.



WHEREFORE, for the foregoing reasons, amicus moves that the

Court grant leave for the filing of the attached Memorandum Amicus
Curiae.

Respectfully submitted,

Director-Counsel

Theodore M. Shaw 
Norman J. Chachkin 
Charles Stephen Ralston 
NAACP LEGAL DEFENSE AND 
EDUCATIONAL FUND, INC.
99 Hudson Street 
Suite 1600
New York, New York 10013 
(212) 219-1900

Attorneys for Amicus Curiae

2



UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK

BARI-ELLEN ROBERTS, SIL 
CHAMBERS, JANET LEIGH WILLIAMS, 
MARSHA HARRIS, BEATRICE HESTER 
AND VERONICA SHINAULT,,

Plaintiffs,

-against-
TEXACO INC.,

94 Civ. 2015 (CLB)

Defendant.

MEMORANDUM AMICUS CURIAE OF THE NAACP LEGAL DEFENSE AND 
EDUCATIONAL FUND, INC., IN SUPPORT OF 

THE SETTLEMENT AGREEMENT

I . INTEREST OF AMICUS CURIAE

The NAACP Legal Defense and Educational Fund, Inc., ("LDF") is 

a non-profit corporation organized under the laws of the State of 

New York. It was formed to assist African-American citizens to 

secure their rights under the Constitution and laws of the United 

States. For many years, Legal Defense Fund attorneys have 

represented parties in litigation before the Supreme Court of the 

United States and other federal and state courts in cases involving 

a variety of race discrimination and remedial issues, including 

many cases involving Title VII of the Civil Rights Act of 1964 and 

the post-Civil War Civil Rights Acts. E . cr. . Griggs v. Duke Power 

Co. , 401 U.S. 424 (1971); Albemarle Paper Co. v. Moody, 422 U .S .

405 (1975); Franks v. Bowman Transportation Co. . 424 U.S. 747

(1976); Bazemore v. Friday. 478 U.S. 385 (986); Patterson v. McLean



Credit Union. 491 U.S. 164 (1989).

For years, LDF has observed that the effective enforcement of 

the nation's anti-discrimination laws rests upon three pillars: 

government enforcement; activities of not-for-profit advocacy and 

litigation organizations such as LDF; and private, class action 

enforcement. Unfortunately, history has established that the 

resources of the federal and state governments, and the not-for- 

profit organizations are not sufficient by themselves to redress 

unlawful discriminatory practices, particularly in the area of 

employment rights. Indeed, in this era of declining government 

resources, the importance of private litigation to the enforcement 

scheme has become more paramount. This action in its prosecution 

and resolution by the proposed settlement before the Court has 
underscored this truth.

As discussed below, the relief achieved in the proposed 

settlement, particularly the independent Equality and Tolerance 

Task Force to be created to revamp Texaco's employment practices, 
will not only address the specific injuries suffered by African- 

American employees of the nation's 13th largest corporation, but 

will, in our view, stand as a model for corporate America to follow 

in ensuring non-discrimination in its work force. Thus, LDF has an 

important interest in the Court's approving the settlement herein.

II. THE RELIEF ACHIEVED HERE IS INNOVATIVE AND IMPORTANT

Employment discrimination class actions have the potential of 

rooting out systemic discrimination, deterring large employers from 

fostering discriminatory conditions, and providing effective and

2



meaningful relief to large numbers of persons who otherwise would 

have to pursue time-consuming and less efficient individual 

actions. However, throughout the 1980's the number of class 

actions that were brought declined precipitously as a result of 

virtually insurmountable legal barriers. In 1991, Congress enacted 

a new civil rights statute removing some of these legal barriers, 

with the hope that once again the private bar would attempt to 

devote its resources to rooting out systemic discrimination.

LDF followed the Roberts v. Texaco case long before it 

appeared on the "national stage" because it was one of the first 

class actions filed under the new law. The plaintiffs undertook 

the enormously time consuming commitments of, and possibly career 

threatening risks of, pursuing a nationwide class action. Class 

counsel devoted enormous resources, often unavailable in the not- 

for-profit and public sectors. They also brought to bear 

extraordinary skill in pursuing a complex class action case against 

a large company represented by a well- financed national law firm.

The results achieved by plaintiffs and class counsel are 

extraordinary. In our opinion, this is a landmark settlement, 

which has the potential for providing a model for all employment 
class actions.

The settlement calls for the creation of an independent 

Equality and Tolerance Task Force ("Task Force") with the authority 

to review and replace or revise all pertinent human resource 

policies and practices including those involving hiring, promotion, 

evaluation, and career development. The Task Force is empowered to 

create state-of-the-art, innovative human resource programs and

3



practices to root out systemic discrimination at Texaco. The Task 

Force, its staff and its outside experts will be fully funded by 

Texaco. The Task Force's determinations must be implemented unless 

Texaco demonstrates it is economically or technically not feasible 
to do so -- a significant feature.

In most class action consent decrees, the lawyers typically 

negotiate specific modifications of current practices. The 

creation of the Task Force is an extraordinarily worthwhile 

innovation in resolving actions of this nature. It ensures that a 

distinguished body of diverse individuals will be committed to 

eliminating seemingly intractable discrimination. Moreover, it 

fosters creative solutions that are often difficult to achieve in 

the heat of battle in litigation or settlement negotiations. The 

five year timetable of the Task Force provides ample time to 
correct and monitor the Task Force determinations.

The monetary relief for the class is impressive. We have been 

informed by class counsel that even after fees and expenses the 

largest cohort of class members will receive between $60,000 to 

$80,000 each, with some receiving more than $120,000. These 

amounts are substantially higher than is typical in cases involving 
promotion and related claims.

The provision providing that class members will receive 

payments from the Settlement Fund without either individually 

proving discrimination in either mini-trials or going through a 

proof of claim procedure is extremely important. The provision 

avoids time consuming and expensive procedures, common in most 

employment discrimination class settlements, that can long delay

4



payment to class members.

In addition to a significant one-time payment, the settlement 

creates the important precedent of providing a permanent salary 

increase to every class member. The amount of the increase -- 

11.34% -- is extraordinary, and will ensure that African-American 
employees will be compensated fairly prospectively.

CONCLUSION

From a monetary standpoint, the settlement brings about real 

compensation for real people in an aggrieved class. It also brings 

about sorely needed reforms within Texaco to eradicate 

discrimination and to establish genuine equal opportunity. This 

extraordinary success should be taken into account in determining 

the reasonableness of the fee request. The settlement in its 

entirety is fair, reasonable, and more than adequate. Amicus urges 

that the Court approve the settlement agreement as fully meeting 
the standards of Rule 23, F. R. Civ. Proc.

Respectfully submitted,

Director-Counsel
Theodore M . Shaw 
Norman J. Chachkin 
Charles Stephen Ralston 
NAACP LEGAL DEFENSE AND 
EDUCATIONAL FUND, INC.
99 Hudson Street 
Suite 1600
New York, New York 10013 
(212) 219-1900

Attorneys for Amicus Curiae

5



CERTIFICATE OF SERVICE

I hereby certify that copies of the foregoing MOTION FOR LEAVE 

TO FILE AND MEMORANDUM AMICUS CURIAE OF THE NAACP LEGAL DEFENSE AND 

EDUCATIONAL FUND, INC., IN SUPPORT OF THE SETTLEMENT AGREEMENT, 

have been served by hand delivery on this 12th of March, 1997, on 
the following counsel:

Daniel L. Berger, Esq.
Steven B. Singer, Esq.
BERNSTEIN, LITOWITZ, BERGER & GROSSMAN LLP 
1285 Avenue of the Americas 
New York, NY 10019

Michael D. Hausfield, Esq.
COHEN, MILSTEIN, HAUSFIELD & TOLL, P.L.L.C. 
1100 New York Avenue, N.W.
West Tower, Suite 500 
Washington, D.C. 20005-3964

FOR PLAINTIFFS

Milton J. Schubin, Esq.
Andrea Christensen, Esq.
KAYE, SCHOLER, FIERMAN, HAYS & HANDLER 
425 Park Avenue 
New York, NY 10022

FOR DEFENDANT

Elizabeth Grossman, Esq.
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION 
New York district Office 
7 World Trade Center, 18th Floor 
New York, NY 10048-1102

6



MPR.12.1997 1:29PM BERNSTEIN LB&G LLP 212 554 1444 NO.261 P. 1/2

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MPR 12 ’97 13=36 212 554 1444 PPGE.01



NAACP LEGAL DEFENSE 
AND EDUCATIONAL FUND, INC.

National Office

Suite 1600 
99 Hudson Street
New York, N.Y. 10013-2897 (212) 219-1900 Fax:(212)226-7592

March 12, 1997

Janies M. Parkison, Clerk 
United States District Court

Southern District of New York 
United States Courthouse 
300 Quarropas St. 1st Floor 
White Plains, NY 10601

Re: Roberts, et al. v. Texaco. Inc. No: 94 Civ. 2015 (CLB)

Dear Mr. Parkison:

Enclosed please find for filing a Motion for Leave to File Memorandum Amicus 
Curiae and Memorandum Amicus Curiae of the NAACP Legal Defense and Educational 
Fund, Inc., in the above case. A certificate of service on all counsel is attached.

Thank you for your attention to this matter.

Very truly yours,

Charles Stephen Ralston 
Senior Staff Attorney

cc: All Counsel

Contributions are The NAACP Legal Defense & Educational Fund, Inc. (LDF) is not part
deductible fo r  U.S. of the National Association for the Advancement of Colored People
income tax purposes. (NAACP) although LDF was founded by the NAACP and shares its

Regional Offices 

Suite 301 Suite 208

commitment to equal rights. LDF has had, since 1957, a separate 
Board, program, staff, office and budget.

1275 K Street, N W  315 West Ninth Street 
W ashington, DC 20005 Los Angeles. CA 90015 
(202) 682-1300 (213) 624-2405
Fax: (202) 682-1312 Fax: (213) 624-0075



NAACP LEGAL DEFENSE 
AND EDUCATIONAL FUND, INC.

National Office

Suite 1600 
99 Hudson Street
New York, N.Y. 10013-2897 (212) 219-1900 Fax :(212) 226-7592

March 12, 1997

James M. Parkison, Clerk 
United States District Court

Southern District of New York 
United States Courthouse 
300 Quarropas St. 1st Floor 
White Plains, NY 10601

Re: Roberts, et al. v. Texaco, Inc. No: 94 Civ. 2015 (CLB)

Dear Mr. Parkison:

Enclosed please find for filing a Motion for Leave to File Memorandum Amicus 
Curiae and Memorandum Amicus Curiae of the NAACP Legal Defense and Educational 
Fund, Inc., in the above case. A certificate of service on all counsel is attached.

Thank you for your attention to this matter.

Very truly yours,

Charles Stephen Ralston 
Senior Staff Attorney

cc: All Counsel

Contributions are The NAACP Legal Defense & Educational Fund, Inc. (LDF) is not part
deductible fo r  U.S. of the National Association for the Advancement of Colored People
income tax purposes. (NAACP) although LDF was founded by the NAACP and shares its

Regional Offices 

Suite 301 Suite 208

commitment to equal rights. LD F has had, since 1957, a separate 
Board, program, staff, office and budget.

1275 K Street, N W  315 West Ninth Street 
W ashington, DC 20005 Los Angeles, CA 90015 
(202) 682-1300 (213) 624-2405
Fax: (202) 682-1312 Fax: (213) 624-0075



MPR.12.1997 1=29PM BERNSTEIN LBS.G LLP 212 554 1444 NO.261 P. 2^2

Elizabeth Grossman, Esq.
Equal Employment Opportunity Commission 
New York District Office 
7 World Trade Center, 18th Floor 
New York, NY 10046-1102

MPR 12 ’97 13:36 212 554 1444 PPGE.02



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COHEN, MELSTEIN, HAUSFELD & TOLL, P.LX.C. 
1100 New York Avenue, N.W.

West Tower, Suite 500 
Washington, D.C. 20005-3964 

(202) 408-<

E ~ 0 < T C (^ )
FACSIMILE COVER SHEET

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Date. March 7, 1997 TIME: 6:19pm

TO: Ted Shaw
FIRM: NAACP - Legal Defense Futtd 
PHONE NO.: (212)226-7592

FROM: Cyrus Mehri, Esq.
SUB./: Texaco Disc. CLIENT NO.: 44150-001

FOR YOUR: X  INFORMATION __ REVIEW  ___RESPONSE

ORIGINAL TO FOLLOW BY M AIL:___YES X_NO

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March 7, 1997 
6:16 pm

UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK

BARI-ELLEN ROBERTS, SIL CHAMBERS,
JANET LEIGH WILLIAMS, MARSHA HARRIS, 
BEATRICE HESTER AND VERONICA SHINAULT,

94 Civ. 2015 (CLB)

Plaintiffs,

-against-

TEXACO INC.,

Defendant.
X

AMICUS CURIE MEMORANDUM OF THE NATIONAL 
ASSOCIATION FOR THE ADVANCEMENT OF COLORED PEOPLE 

LEGAL DEFENSE FUND, INC., IN SUPPORT OF THE SETTLEMENT, 
INCENTIVE BONUSES AND FEE PETITION

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I .  IN TER EST OF AM ICUS

The NAACP Legal Defense Fund, Inc. ("LDF") has, as a 

principal component of its charter, the responsibility of 

ensuring that the federally protected rights of African-Americans 

to be free from unlawful discirmination in employment. The LDF 

investigates and, where appropriate, commences impact litigation 

on behalf of African-Americans under Title VII of the 1964 Civil 

Rights Act and § 1931. For years, the LDF has observed that the 

effective enforcement of the nations anti-discrimination laws 

rests upon three pillars: government enforcement; activities of

not-for-profit advocacy and litigation organizations such as the 

LDF; and, private, class action enforcement.

Unfortunately, history has established that the resources of 

the federal and state government, and the not-for-profit 

organizations are not sufficient by themselves to redress 

unlawful discriminatory practices, particularly in the area of 

employment rights. Indeed, in this era of declining government 

resources, the importance of private litigation to the 

enforcement scheme has become more paramount. This action in its 

prosecution and resolution by the proposed settlement before the 

Court has underscored this truth.

As discussed below, the relief achieved in the proposed 

settlement, particularly the independent Equality and Tolerance 

Tas Force to be created to revamp Texaco's employment practices 

will not only address the specific injuries suffered by African-
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American employees of the nation's 13th largest corporation but 
will, in our view, stand as a model for corporate America to 

follow in ensuring non-discrimination in its work force. Thus, 

the LDF has an important interest in the Court approving the 

settlement, attorneys' fees, and incentive bonuses.

I I  - THE R E L IE F  ACHIEVED HERE I S  UNPRECEDENTED

Employment discrimination class actions have the potential 

of both rooting out systemic discrimination and deterring large 

employers from fostering discriminatory conditions. To our 

dismay, throughout the 1980’s classwide enforcement of the 

nation's anti-discrimination laws reached a near standstill as a 

result of virtually insurmountable legal barriers. In 1991, 

Congress enacted a new civil rights statute removing some of 

these legal barriers, with the hope that once again the private 

bar would attempt to devout its resources to rooting out systemic 

discrimination.

The LDF followed the Roberts v. Texaco case, long before it 

appeared on the "national stage," because it was one of the first 

class cases filed under the new law. The plaintiffs undertook 

the enormously time consuming commitments of, and possibly career 

threatening risks of, pursuing a nationwide class action. Class 

Counsel devoted enormous resources, that are most often 

unavailable in the not-for-profit and public sectors. They also

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brought to bear extraordinary skill in pursuing complex class 

action cases against large companies represented by well financed 

national law firms.

The results achieved by plaintiffs and Class Counsel are 

quite extraordinary. In our opinion, this is a landmark 

settlement, whose full repercussions cannot be fully measured at 

this time, but we believe it will "lift the boats" for all 

aggrieved discrimination classes.

The Settlement calls for the creation of an independent 

Equality and Tolerance Task Force (the "Task Force”) with the 

authority to review and replace or revise all pertinent human 

resource policies and practices including those involving hiring, 

promotion, evaluation, and career development. The Task Force is 

empowered to create state-of-the-art, innovative human resource 

programs and practices to root out systemic discrimination at 

Texaco —  the thirteenth largest corporation in the United 

States. The Task Force, its staff and its outside experts will 

be fully funded by Texaco. The Task Force's determinations must 

be implemented unless Texaco demonstrates it is economically or 

technically not feasible —  a significant feature.

In most class action consent decrees, the lawyers typically 

negotiate specific modifications of current practices. The 

creation of the Task Force is an extraordinarily worthwhile 

innovation in resolving actions of this nature. It 

ensures that a distinguished body of diverse individuals will be

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committed to eliminating seemingly intractable discrimination. 

Moreover, it fosters creative solutions, impossible to achieve in 

the heat of battle in litigation or settlement negotiations. The 

five year timetable of the Task Force provides ample time to 

correct and monitor the Task Force determinations.

The cash portion of the settlement is impressive. We have 

been informed by Class Counsel that even after fees and expenses 

the largest cohort of class members will receive between $70,000 

to $80,000 each, with some receiving more than $120,000. These 

amounts far exceed the amounts most plaintiffs would expect to 

receive in individual litigation.

This Settlement creates another important precedent in 

employment discrimination settlements. Class members will 

receive payments from the Settlement Fund without individually 

proving discrimination in either time consuming and expensive 

mini-trials or proof of claim procedures as is common in most 

employment discrimination class settlements.

In addition to a large cash payment, each current employee 

class member will receive a permanent salary increase of 11.34% - 

- also an extraordinary amount. This ensures that African- 

Americans will be compensated fairly prospectively.

From a monetary standpoint, this settlement brings about 

real compensation for real people in an aggrieved class. It also 

brings about sorely needed reforms within Texaco to eradicate 

discrimination and to establish genuine equal opportunity.

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I I I .  P L A IN T I F F S ' A P P L IC A T IO N S  FOR IN CEN TIVE BONUSES AND
A TTO R N EYS' FEES COUNSEL ARE F A IR  AND REASONABLE AND
SHOULD BE GRANTED ~  '

The named plaintiffs have made a request for incentive 

awards of up to $200,000 each and Class Counsel are seeking fees 

of 25% of the Settlement Fund or approximately 16% of the total 

value of the Settlement. These requests are fair and reasonable 
and should be granted.

The LDF has long been troubled by the dearth of private 

sector firms willing and able to prosecute nationwide civil 

rights class actions. Very few law firms have attempted to 

undertake a civil rights case of this magnitude and fewer still 

have succeeded. Effective enforcement of the federal civil 

rights laws should be encouraged to carry out the national 

commitment of eradicating discrimination. Large segments of the 

public subjected to discriminatory workplaces are denied remedies 

because of the shortage of legal resources and talent willing and 

able to risk the extraordinary time and out-of-pocket expenses 

required to pursue a nation wide civil rights class action on 

contingency. As a matter of public policy, LDF urges the Court 

to grant petitioners' reasonable fee request in order to 

revitalize private sector civil rights enforcement. This will 

encourage other "private attorney general" law firms to enter the 
civil rights arena.

The named plaintiffs in this action bravely put their

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careers on the line to attempt to confer benefits to the Class 

and replace longstanding discrimination practices with genuine 

equal opportunity- The named plaintiffs in no small measure 

contributed to the superb settlement results. We know from first 

hand experience the human cost, personal sacrifice and financial 

risk involved in being an employment discrimination named 

plaintiff. The named plaintiffs deserve the incentive awards 

they have requested.

I V .  CONCLUSION

For the foregoing reasons, amicus curea, LDF, respectfully 

requests that the Court approve the Settlement, Class Counsel's 

fee petition, and the named plaintiffs' request for incentive 

bonuses.

Dated: March ____, 1997

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C E R T IF IC A T E  OF SERVICE

I hereby certify that on March ___, 1997, I cause to be

served the foregoing Amicus Curie Memorandum Of The National

Association For The Advancement Of Colored People Legal Defense

Fund, Inc., In Support Of The Settlement, Incentive Bonuses And

Fee Petition by hand on the following counsel:

Michael D. Hausfeld, Esq.
Cyrus Mehri, Esq.
COHEN, MILSTIEN, HAUSFELD 
& TOLL, P.L.L.C.

1100 New York Avenue, N.W.
West Tower, Suite 500 
Washington, D.C. 20005-3964 
(202) 408-4600

Daniel L. Berger, Esq.
Steven B. Singer, Esq.
BERNSTEIN LITOWITZ BERGER 
& GROSSMANN LLP 

1285 Avenue of the Americas 
New York, NY 10019 
(212) 554-1400

FOR PLAINTIFFS

Milton J. Schubin, Esq. 
Andrea Christensen, Esq. 
KAYE, SCHOLER, FIERMAN, 

HAYS & HANDLER 
425 Park Avenue 
New York, NY 10022 
(212) 836-8000

FOR DEFENDANT

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