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):
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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