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A Flashback to the Largest Out-of-court Settlement of the 1980s

Out of Court SettlementThis month marks the 30th year after the largest automaker in the U.S., General Motors Corporation (GM), has agreed to end employment discrimination on the basis of gender and race in its workplace.

It could be remembered that on October 18, 1983, the Equal Employment Opportunity Commission (EEOC), the government agency responsible for enforcing federal laws that protect workers and applicants from all forms of employment discrimination, has signed a settlement agreement with GM. Under the said agreement, the American automaker agreed to hire more women and minorities.

The agreement came in line after the EEOC filed a complaint against GM upon discovering that the automaker unfairly treated its African-American, Latino, other minority, and female employees.

Thus, in an aim to correct its corrupted employment practice, GM agreed to pay a staggering amount of $42.5 million. Apparently, based on labor history, the said monetary relief was in fact the largest out-of-court settlement for an employment discrimination case at that time.

Moreover, the company subsequently agreed to cash out another $8.9 million to develop a program for hiring, training and promoting minority and female employees. It likewise agreed to give those employees preference in the distribution of education assistance funds.

Well, that didn’t end there. The GM further spent another $3 million on training of African-American, Latinos and female clerical employees, in addition to some $2 million for training them in mathematics and other areas that would make them qualified for apprenticeship programs.

So far, although said lawsuit is no longer the highest out-of-court settlement of this time, it still played a remarkable role in the labor history for sending an important message to other employers across the U.S – the EEOC is always watching. In Los Angeles, where hundreds of workplace discrimination complaints are being filed each year, may this settlement serve as a lesson so that employers won’t do the same.


Posted in Employment Cases.

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