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May 29, 2002

USA: Sara Lee pays out US$3.5m for settlement of racial discrimination lawsuit

Sara Lee Foods (SLF), a division of the US consumer products giant, will pay out US$3.5m to settle a racial discrimination litigation brought by a group of its former employees.   Civil actions, which had been filed on behalf of 139 individual African-American former employees of the company, all concerned employment disputes related to a food processing plant in Philadelphia, including the closure of that facility in August 2001.

Sara Lee Foods (SLF), a division of the US consumer products giant, will pay out US$3.5m to settle a racial discrimination litigation brought by a group of its former employees.  

Civil actions, which had been filed on behalf of 139 individual African-American former employees of the company, all concerned employment disputes related to a food processing plant in Philadelphia, including the closure of that facility in August 2001.

An initial lawsuit, filed by nine employees, sought class action status alleging past acts of racial discrimination and hostile work environment conditions. Class certification in the Eastern District of Pennsylvania was denied by US Senior District Judge Lowell Reed, and again by the Third Circuit Court of Appeals. Plaintiffs then individually filed separate lawsuits.

While these cases were pending, the plant was closed. This prompted further litigation including a new class action complaint alleging retaliation in the decision to close the plant. Plaintiffs were represented by attorneys Robert T. Vance, Jr. of Philadelphia, Stephen A. Whinston of Berger & Montague, Philadelphia, and Cynthia L. Butler of Butler & Spears, Washington. SLF was represented by Constangy, Brooks & Smith attorneys William A. Blue, Jr, of Nashville, Frank B. Shuster and R. David Ware of Atlanta.

The settlement resulted from negotiations supervised by US Magistrate Judge Linda K. Caracappa, and covers all pending cases. Specific terms of the settlement were not disclosed, but it was acknowledged that individual settlements did vary depending on employment tenure, filing as an original lead plaintiff and other factors. The settlement of all 140 claims included a payment of US$3.5m together with a complete dismissal of the retaliation class action complaint.

On behalf of plaintiffs, attorney Vance noted his satisfaction with the final settlement: “We are pleased that we have reached a fair and amicable settlement. The plaintiffs are now able to move forward with their lives and focus on their futures.”

William A. Geoppinger, CEO of Sara Lee Foods, added: “Sara Lee Foods is committed to a workplace free from any form of harassment or discrimination.”

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