Coke’s landmark settlement in the U.S. shines light on issue of discrimination in the workplace and many Canadian employers are still failing
In what’s being viewed by many south of the border as a watershed case — or at the very least one that made people sit up and take notice — soft-drink giant Coca-Cola Co. agreed last month to spend US$192-million to settle a class-action racial discrimination lawsuit with a group of employees and former employees.
It’s expected the decision will go a long way to making American businesses more vigilant when it comes to creating inclusive workplaces.
While the significant differences between the Canadian and American judicial systems mean we’re unlikely to see comparable settlements north of the 49th, employers are deluding themselves if they believe discrimination isn’t a problem in Canadian workplaces, say diversity experts. There have been cases in Canada in recent years of employers being ordered to implement employment equity plans not dissimilar to Coke’s in order to change the behaviours that are considered discriminatory.
However, the system designed to remedy the problem is so faulty that fed up human rights lawyers say they’re starting to look for new ways to punish employers who don’t go out of their way to make sure they create inclusive workplaces.
The Coke case
Aside from compensating 2,000 African-American employees and former employees an average of US$40,000 each, Coke will spend an estimated $43.5 million over 10 years to eliminate pay disparities between white and African-American employees and another $36 million to implement a sweeping employment equity plan that will see the company submitting most of its HR practices — pay, promotions and performance evaluation — to the review of an independent committee.
The plaintiffs in the case claimed Coke discriminated against black employees when it came to pay, promotions and performance evaluations and the settlement covers all black salaried employees in the United States who worked any time between April 22, 1995 and June 14, 2000.
Coca-Cola, which denied the allegations of discrimination, ignored an earlier suggestion by the company’s highest-ranking black employee Carl Ware, who warned the company five years ago there was a diversity problem in the organization.
In a memo to all employees, Coke CEO Doug Daft said, “Discrimination of any kind — even if it’s unintended, tolerated or simply overlooked — has no place at the Coca-Cola Company.”
A huge problem
Many Canadian employers harbour the mistaken belief that they do not discriminate against employees, said Daina Green, an equity consultant. “I get called into an awful lot of companies that tell me there’s no problem here,” she said. “But then I talk to employees and it’s a different story.”
While employers may say there’s no problem, employees are saying it’s a huge problem, she said.
And the numbers, when closely examined, seem to support that.
In the past few years there has been a consistent flow of complaints to human rights commissions across the country, said human rights and employment lawyer, Mark Hart, of the Toronto-based firm Sanson and Hart. “But that is just the tip of the iceberg,” he added. Human rights commissions have been discouraging people from proceeding with cases and downloading complaints to arbitrators wherever a collective agreement governs the employment relationship. The number of complaints before arbitrators has “mushroomed,” said Hart.
On top of that, there are still a large number of incidents going unreported by people who, quite simply, are afraid to rock the boat, said Green.
Unreported cases aside, on the whole, there’s been a dramatic increase in the number of employees reporting discrimination across the country. “It’s unbelievable the volume,” said Hart.
In part, the increase is probably due to more people understanding what is and is not acceptable workplace behaviour. Legislation designed to eradicate discrimination in the workplace has definitely heightened peoples’ awareness of their rights, he said.
However, people still are discriminated against and the problem does not appear to be getting any better for two reasons. First the discrimination in Canadian workplaces is usually systemic, and second, the judicial system is failing to deal with cases adequately.
Systemic racism
While Canadians may imagine they live in a more inclusive society than Americans, discrimination still exists. It’s just different, said Green. “It exists on a systemic level.”
“When your workplace doesn’t reflect the community from which you draw your staff, you should ask yourself why,” she said.
“I believe very, very strongly that discrimination in the workplace is unintentional in most instances,” said Elizabeth McArthur, of the workplace training and consulting company Diversity at Work. Certainly there are still incidents of individuals with biases who act in an intentionally discriminatory way, but for the most part employees are discriminated against because there is a lack of knowledge and understanding about how the employee is being discriminated against.
Many employers may feel that since they are not biased against any group, the workplace will naturally reflect those attitudes and not discriminate against employees. But it doesn’t happen that way. Take recruitment for example.
“There is still the very real potential where somebody’s name is different, subconsciously, the resume is looked at differently and the candidate doesn’t have a chance. That is systemic racism,” said McArthur.
There is common belief among employers that standard recruitment practices will bring an accurate representation of the community but that is simply not the case, said McArthur, employers have to do much more than that.
“Employers are becoming increasingly aware of the more blatant stuff,” said Hart. The problem is that most Canadian employers are not very good at dealing with the systemic, more subtle forms of race bias. In other words, employees are being discriminated against without the employer even knowing about it. There is nothing overt or intentional, but it is discrimination nonetheless and just as damaging to the victim.
Take, for example, a group of clerical workers who share a workspace, said Hart. The white employees unintentionally help each other with work or go out for lunch together. There are more informal supports for them and the person of colour left out becomes more and more isolated, he said. This in turn leads to performance problems but when the manager demands better performance and the excluded employee blames the under performance on racism the manager just doesn’t understand it.
What you will find, said McArthur, is that minority people say discrimination in Canada is actually far more difficult to deal with because it is mostly under the surface. People feel like they are being treated differently because of their colour. “It’s not just one person who has said this to me, it is many, many people,” said McArthur.
The only way to defeat this more subversive, yet no less damaging form of discrimination, is by requiring, and if need be forcing, employers to be proactive in creating inclusive workplaces, said Green.
Which brings up the second reason why discrimination continues stubbornly to poison Canadian workplaces.
While the increased number of complaints coming before human rights commissions suggests employees have a better sense of their rights, it does not necessarily follow that the system is working as it is intended — on the contrary.
“The system is definitely not working,” said Hart. “Human rights commissions are failing miserably in dealing with cases in a timely and reasonable manner,” he said.
In Ontario, only three to five per cent of cases get past the preliminary stage to the board of inquiry and to complete the entire process can take upwards of five to seven years. “It’s unbelievable what people are put through,” he said.
There are precedents in Canada and employers still need to be very cognizant of the fact that they could be forced to implement sweeping employment equity plans if they aren’t careful, said Mary Cornish, a partner with the Toronto-based firm Cavalluzzo Hayes Shilton McIntyre and Cornish.
A 1987 decision by the Supreme Court of Canada ruled that human rights tribunals could order employment equity plans under the Canadian Human Rights Act in cases where discriminatory workplace practices exist. And in the 1997 decision National Capital Alliance on Race Relations v. Canada (Health and Welfare), the Canadian Human Rights Commission imposed an extensive remedial employment equity program on Health Canada in order to redress discriminatory employment barriers facing visible minorities at the federal department.
Last year’s Meiorin case — where the Supreme Court ruled the physical tests for British Columbia forest firefighters were not bone fide occupational requirements and therefore discriminated against female firefighter Tawny Meiorin — was supposed to be a watershed case in Canada that would change how employers thought about creating inclusive workplaces, but most employers still don’t care, she said.
“They don’t care because they don’t experience it,” Green said. And since the likelihood of anything happening to them is so low, they can afford not to be proactive.
Because of this, lawyers like Hart are looking for new ways to tackle workplace discrimination and have, as he puts it “reached back through the mists of time,” for a precedent from the 1800s applying it to contemporary discrimination claims. Most employment law is based on contractual law, he said. But in applying this precedent from last century of infliction of mental suffering the entire field is opened up to tort law which raises the possibility of employers being forced to pay punitive damages, said Hart.
It’s expected the decision will go a long way to making American businesses more vigilant when it comes to creating inclusive workplaces.
While the significant differences between the Canadian and American judicial systems mean we’re unlikely to see comparable settlements north of the 49th, employers are deluding themselves if they believe discrimination isn’t a problem in Canadian workplaces, say diversity experts. There have been cases in Canada in recent years of employers being ordered to implement employment equity plans not dissimilar to Coke’s in order to change the behaviours that are considered discriminatory.
However, the system designed to remedy the problem is so faulty that fed up human rights lawyers say they’re starting to look for new ways to punish employers who don’t go out of their way to make sure they create inclusive workplaces.
The Coke case
Aside from compensating 2,000 African-American employees and former employees an average of US$40,000 each, Coke will spend an estimated $43.5 million over 10 years to eliminate pay disparities between white and African-American employees and another $36 million to implement a sweeping employment equity plan that will see the company submitting most of its HR practices — pay, promotions and performance evaluation — to the review of an independent committee.
The plaintiffs in the case claimed Coke discriminated against black employees when it came to pay, promotions and performance evaluations and the settlement covers all black salaried employees in the United States who worked any time between April 22, 1995 and June 14, 2000.
Coca-Cola, which denied the allegations of discrimination, ignored an earlier suggestion by the company’s highest-ranking black employee Carl Ware, who warned the company five years ago there was a diversity problem in the organization.
In a memo to all employees, Coke CEO Doug Daft said, “Discrimination of any kind — even if it’s unintended, tolerated or simply overlooked — has no place at the Coca-Cola Company.”
A huge problem
Many Canadian employers harbour the mistaken belief that they do not discriminate against employees, said Daina Green, an equity consultant. “I get called into an awful lot of companies that tell me there’s no problem here,” she said. “But then I talk to employees and it’s a different story.”
While employers may say there’s no problem, employees are saying it’s a huge problem, she said.
And the numbers, when closely examined, seem to support that.
In the past few years there has been a consistent flow of complaints to human rights commissions across the country, said human rights and employment lawyer, Mark Hart, of the Toronto-based firm Sanson and Hart. “But that is just the tip of the iceberg,” he added. Human rights commissions have been discouraging people from proceeding with cases and downloading complaints to arbitrators wherever a collective agreement governs the employment relationship. The number of complaints before arbitrators has “mushroomed,” said Hart.
On top of that, there are still a large number of incidents going unreported by people who, quite simply, are afraid to rock the boat, said Green.
Unreported cases aside, on the whole, there’s been a dramatic increase in the number of employees reporting discrimination across the country. “It’s unbelievable the volume,” said Hart.
In part, the increase is probably due to more people understanding what is and is not acceptable workplace behaviour. Legislation designed to eradicate discrimination in the workplace has definitely heightened peoples’ awareness of their rights, he said.
However, people still are discriminated against and the problem does not appear to be getting any better for two reasons. First the discrimination in Canadian workplaces is usually systemic, and second, the judicial system is failing to deal with cases adequately.
Systemic racism
While Canadians may imagine they live in a more inclusive society than Americans, discrimination still exists. It’s just different, said Green. “It exists on a systemic level.”
“When your workplace doesn’t reflect the community from which you draw your staff, you should ask yourself why,” she said.
“I believe very, very strongly that discrimination in the workplace is unintentional in most instances,” said Elizabeth McArthur, of the workplace training and consulting company Diversity at Work. Certainly there are still incidents of individuals with biases who act in an intentionally discriminatory way, but for the most part employees are discriminated against because there is a lack of knowledge and understanding about how the employee is being discriminated against.
Many employers may feel that since they are not biased against any group, the workplace will naturally reflect those attitudes and not discriminate against employees. But it doesn’t happen that way. Take recruitment for example.
“There is still the very real potential where somebody’s name is different, subconsciously, the resume is looked at differently and the candidate doesn’t have a chance. That is systemic racism,” said McArthur.
There is common belief among employers that standard recruitment practices will bring an accurate representation of the community but that is simply not the case, said McArthur, employers have to do much more than that.
“Employers are becoming increasingly aware of the more blatant stuff,” said Hart. The problem is that most Canadian employers are not very good at dealing with the systemic, more subtle forms of race bias. In other words, employees are being discriminated against without the employer even knowing about it. There is nothing overt or intentional, but it is discrimination nonetheless and just as damaging to the victim.
Take, for example, a group of clerical workers who share a workspace, said Hart. The white employees unintentionally help each other with work or go out for lunch together. There are more informal supports for them and the person of colour left out becomes more and more isolated, he said. This in turn leads to performance problems but when the manager demands better performance and the excluded employee blames the under performance on racism the manager just doesn’t understand it.
What you will find, said McArthur, is that minority people say discrimination in Canada is actually far more difficult to deal with because it is mostly under the surface. People feel like they are being treated differently because of their colour. “It’s not just one person who has said this to me, it is many, many people,” said McArthur.
The only way to defeat this more subversive, yet no less damaging form of discrimination, is by requiring, and if need be forcing, employers to be proactive in creating inclusive workplaces, said Green.
Which brings up the second reason why discrimination continues stubbornly to poison Canadian workplaces.
While the increased number of complaints coming before human rights commissions suggests employees have a better sense of their rights, it does not necessarily follow that the system is working as it is intended — on the contrary.
“The system is definitely not working,” said Hart. “Human rights commissions are failing miserably in dealing with cases in a timely and reasonable manner,” he said.
In Ontario, only three to five per cent of cases get past the preliminary stage to the board of inquiry and to complete the entire process can take upwards of five to seven years. “It’s unbelievable what people are put through,” he said.
There are precedents in Canada and employers still need to be very cognizant of the fact that they could be forced to implement sweeping employment equity plans if they aren’t careful, said Mary Cornish, a partner with the Toronto-based firm Cavalluzzo Hayes Shilton McIntyre and Cornish.
A 1987 decision by the Supreme Court of Canada ruled that human rights tribunals could order employment equity plans under the Canadian Human Rights Act in cases where discriminatory workplace practices exist. And in the 1997 decision National Capital Alliance on Race Relations v. Canada (Health and Welfare), the Canadian Human Rights Commission imposed an extensive remedial employment equity program on Health Canada in order to redress discriminatory employment barriers facing visible minorities at the federal department.
Last year’s Meiorin case — where the Supreme Court ruled the physical tests for British Columbia forest firefighters were not bone fide occupational requirements and therefore discriminated against female firefighter Tawny Meiorin — was supposed to be a watershed case in Canada that would change how employers thought about creating inclusive workplaces, but most employers still don’t care, she said.
“They don’t care because they don’t experience it,” Green said. And since the likelihood of anything happening to them is so low, they can afford not to be proactive.
Because of this, lawyers like Hart are looking for new ways to tackle workplace discrimination and have, as he puts it “reached back through the mists of time,” for a precedent from the 1800s applying it to contemporary discrimination claims. Most employment law is based on contractual law, he said. But in applying this precedent from last century of infliction of mental suffering the entire field is opened up to tort law which raises the possibility of employers being forced to pay punitive damages, said Hart.
