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Coca-Cola Racial Quota Mandate For Outside Law Firms Fizzles Out

Coca-Cola Racial Quota Mandate For Outside Law Firms Fizzles Out

Coke now denies that the racial quota plan proudly announced by the company and its prior General Counsel ever was company policy, another indication that one of the best remedies to CRT madness is sunlight.

On January 29, 2021, we covered a new diversity plan implemented by then Coca-Cola General Counsel Bradley Gayton that imposed racial quotas for attorneys at outside law firms that wanted to do business with the beverage behemoth, Coca-Cola Imposes Racial Quotas On Outside Counsel Staffing.

The letter (pdf.) to outside counsel provided a chart and description of the quotas, including who qualifies as a “diversity” attorney and what the minimum percentages need to be:

Outside counsel commit to providing KO with self-identified diversity data (including American Indian or Alaska Native, Asian, Black, Women, Hispanic/Latinx, LGBTQ+, Native Hawaiian or Other Pacific Islander and Persons with Disabilities) for KO’s quarterly analysis of the diversity of teams working on KO matters

* * *

For each new KO matter following the revision to the guidelines (“New Matters”), you commit that at least 30% of each of billed associate and partner time will be from diverse attorneys, and of such amounts at least half will be from Black attorneys. Work performed by diverse attorneys is expected to be accretive to their development and advancement at the firm. These percentages are approximately linked to U.S. Census population data. These minimum commitments will be adjusted over time as U.S. Census data evolves, with an ultimate aspiration that at least 50% of billed associate time and billed partner time will be from diverse attorneys with at least half of that amount from Black attorneys. You will also work to apply the above commitment to our existing matters with your firm.

It wasn’t a secret. Coke tweeted about it:

There was a fair amount of backlash to these racial quotas. There also were other race-related embarrassments, including reports in February 2021, that Coca-Cola Forced Employees To Take Online Course To Learn “To Be Less White” and Newly ‘Woke’ Coca-Cola Joins Corporate Dogpile on New Georgia Voting Law in April.

Gayton ended up resigning in late April 2021, with a 7-figure payout, though it’s hard to know how much the racial quota and other race-related debacles played in it.

After Gayton’s departure, the outside counsel racial quota project was put on hold pending review.

The America Civil Rights Project now reports that Coca-Cola has stated in writing that the racial quota program is not company policy, and despite Coke’s prior tweet about it and official letter, it never was policy. Don’t believe your eyes.

From the ACRP Press Release:

After months of pressure from concerned stockholders, Coca-Cola’s General Counsel Monica Howard Douglas recently let it be known that the illegal discriminatory outside-counsel policies Coke announced with great fanfare last year “have not been and are not policy of the company.” Since the policies in question had clearly and unequivocally been promulgated by Coke’s previous General Counsel—a corporate officer with at least apparent authority to issue them—Coke’s position that they were never its own can be seen as a face-saving measure. We are nevertheless happy that Coke has come around.

* * *

This was clearly illegal race discrimination barred by 42 U.S.C. Section 1981 as well as other anti-discrimination laws. As the ACR Project’s Dan Morenoff put it, “It’s amazing that neither the General Counsel of a large corporation like Coke, nor the large, prominent law firms the policy involved, seem to have considered its direct conflict with American civil rights laws. It’s even more amazing that so many other sophisticated, American corporations have similarly disregarded obvious legal problems to adopt comparably ‘woke’ policies.”

* * *

For Coke shareholders, these “paused” policies remained a threat to Coke’s future profitability (and, as a result, to the value of their shares.). Maybe Coke’s law firms would not now sue out of fear of retaliation; eventually though, one or more of them, a firm excluded from consideration due to its racial makeup, or an enterprising state Attorney General would. Then, Coke would lose.  Knowing this, the ACR Project wrote to Coke, its officers, and its directors, on behalf of several shareholders, demanding the public retraction of the discriminatory policies.  If Coke had refused, these shareholders would hold Coke’s officers and directors personally liable for breaching their fiduciary duties to investors.

After months of foot dragging, Ms. Douglas responded with her assurance that the discriminatory policies are not now and never have been company policy. Face-saving elements aside, her substantive statement satisfied the ACR Project’s concerned investors. Explained Dan Morenoff, “Coke’s officers and directors recognized that their fiduciary obligations to shareholders made ‘go woke, go broke’ a problem not just for the company, but for each of them. They’ve avoided material personal liability by stopping the company from pursuing the announced, illegal, racially discriminatory contracting policy. That’s an example that every American C-suite should learn from and act on going forward.”

Here is the letter from Coca-Cola’s current General Counsel (yellow highlighting added):

[Yellow highlighting added]

This walkback has not received much attention, other than in a column by Prof. Glenn Reynolds at the NY Post, Resistance is rising to woke colleges’ race and sex discrimination:

People used to talk about “resistance” to President Donald Trump. That’s old hat. Now it’s resistance to the woke….

After pressure from ACR, Coke backed down and ended the program (after claiming the loudly proclaimed policy was never really policy at all). Now ACR is writing other major corporations with similar policies — Starbucks, McDonald’s and Novartis AB — demanding that they stop the illegal discrimination too. The group is also in negotiations with Lowe’s Companies about illegal racial preferences in promotion….

More lawsuits and administrative complaints are likely on the way, with similar outcomes: There’s a lot of low-hanging fruit there. Most corporate and academic officials seem to think the law doesn’t apply so long as they’re politically correct. Time for them to learn otherwise.

That Coca-Cola denies the reality of its racial quota program that it openly tweeted and promoted, is another indication that one of the best remedies to CRT madness is sunlight.

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Comments

This is a noble fight you are doing professor and one to keep up.

    JohnSmith100 in reply to Danny. | March 27, 2022 at 8:47 pm

    If I was a service provider for Coke, I would have responded by assigning them all my deadbeats at sky high hourly rates. I could protect other clients.

Sanity: 1; Coke Zero.

OwenKellogg-Engineer | March 26, 2022 at 10:32 pm

Revoke the woke.

Woke and morally broke. That said, diversity [dogma] breeds adversity. Baby Lives Matter (BLM)

“then Coca-Cola General Counsel Bradley Gayton”

who is all too obviously AA all the way.

Store bought CFDC is better than the woke junk anyways.

George_Kaplan | March 27, 2022 at 12:07 am

Too little too late. Store brand Coke is cheaper anyway.

In the end, they probably realize the damage that would have been done by having attorneys based on race and gender alone would be a legal disaster. (Likely, they foretold a Ketanji Brown Jackson or two, after witnessing the Kamala Harris disaster.)

A good lesson in the professional animus against white people. Coke’s upper management has been anti-American, anti-white for a decade. And proud of it. Most curious…this new racial hatred.

    ScottTheEngineer in reply to puhiawa. | March 27, 2022 at 10:10 am

    I see it as professional disrespect of black attorneys. They aren’t capable of competing in America because blacks are a lesser race and need white liberals to keep them from starving. Its open faced bigotry.

AF_Chief_Master_Sgt | March 27, 2022 at 2:07 am

“…at least 50% of billed associate time and billed partner time will be from diverse attorneys with at least half of that amount from Black attorneys.”

Only 5% of attorneys are black. Only 5% of attorneys are Hispanic.

50% of billable hours must be from diverse attorneys, with 25% of all billable hours from black attorneys, that’s a lot of hours from a very small population of attorneys.

Do the math.

    Not to mention that those are affirmative action attorneys…my UVA Law golf partner who worked as a DA in two very large prosecution offices in NY state doesn’t have a good thing to say about them. His comment about KBJ’s failures at her confirmation hearing, “she obviously spent any time trying cases.”

      Dave in reply to Dave. | March 27, 2022 at 8:32 am

      never spent any time…

      AF_Chief_Master_Sgt in reply to Dave. | March 29, 2022 at 6:51 am

      Thanks for pointing out my obvious omission.

      My daughter is an L3. It is obvious that many law school students of color receive additional time to take exams, lobby for excusal from exams when reality triggers them, and have low standing in class rankings.

    henrybowman in reply to AF_Chief_Master_Sgt. | March 27, 2022 at 3:17 pm

    “50% of billable hours must be from diverse attorneys, with 25% of all billable hours from black attorneys, that’s a lot of hours from a very small population of attorneys. Do the math.”

    “Plus we’ll make ’em do it in the hot sun, because Their Kind excel at that.”

    The Gentle Grizzly in reply to AF_Chief_Master_Sgt. | March 27, 2022 at 8:28 pm

    Math is racist.

“Gayton ended up resigning in late April 2021, with a 7-figure payout, though it’s hard to know how much the racial quota and other race-related debacles played in it.”

What if that was the plan from the beginning? Get a CEO & BoD to do something stupid, blame it on me, and send me home with seven figures. Ouch not.

    henrybowman in reply to TX-rifraph. | March 27, 2022 at 3:19 pm

    Obama wrote the playbook.
    The entirely untalented can still succeed, by showing some outrageous “Audacity.”

It’s funny how law firms, think Perkins Coie, are dominated by white progressives who donate millions to leftist causes, but when their hypocrisy is pointed out, they get bent out of shape. It’s never been about racial equality, it’s always been about using minorities to advance a political agenda.

    maxmillion in reply to Guardian79. | March 27, 2022 at 10:41 am

    It goes way beyond law firms. It goes back to JFK’s 1960 campaign when he openly pandered to black voters, which LBJ picked up on and further exploited with his “War on Poverty,” chortling that he’d have blacks voting Democrat for the next 200 years. And so far they have. Before that most black people in America registered as Republicans. Even Martin Luther King was a registered Republican.

ScottTheEngineer | March 27, 2022 at 10:07 am

Haven’t purchased a coke product since they claimed that black people were a lesser form of American.
I used to buy at least a case a week.
Switched to Dr. Pepper with Cream soda. I find its a good alternative. I’ll keep this up until I hear the apology.

Anecdote on the public impact; the small country store where I purchase gas and some groceries has had RC achieve near parity with Coke. People made a decision to buy RC products instead which created bigger orders for RC which led to more product available.

If this little independent country store tracks sales and adjusts inventory then the larger chains will respond to consumer input based on purchasing data as well.

What is not being mentioned is how much lost revenue Mr. Gayton caused Coke in addition to his severance. Who hired this bird in the first place?? How many folks have Coke on their S… List for sponsoring the Bejing olympics??

Sometimes the simple solutions are the best. All Coke needs to do is to head down to the ‘hood and hire some small practitioners the next time they have a major litigation issue. Surely, those small firms will kick the asses of the big white firms because of “diversity” or something. When I was practicing, judges would usually bend over backwards to accommodate the limited skills of “diversity” attorneys, yet they still lost over and over again. If I were the General Counsel of Coke, I’d probably be perplexed about that. But most of us understand that it’s the merit of the arguments–not the color of the skin of the advocate–that determines the outcomes of lawsuits. An idea so crazy it could work!

if this crap that they’re trying to do was ON the record, just imagine what they’re actually doing on the low down – and getting away with!