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5th Circuit

When Marcel T. Thomas joined General Electric in 2001, he expected quick results from himself and those around him. The former Green Beret and White House fellow rose quickly through the ranks over a three-year period, beginning as a general manager of global sourcing for GE Rail--the largest U.S.-based locomotive manufacturer--where he lead an international team of more than 200 employees and was responsible for $2 billion dollars in annual purchases worldwide. In 2004 he had done so well that the company promoted him to CEO of GE Aviation Materials, a Texas-based division that purchases and sells airframes and turbine engines.

But his career came to a screeching halt in 2005.

After failing to receive a promised salary increase and bonus, Thomas, who is African-American, filed a complaint with GE that he was denied the bonus because of his race.

Soon after filling his complaint, he claims his superiors gave him a poor performance review after years of excellent reviews. He then filed a race discrimination class action complaint against GE on May 18 in Connecticut federal court. He filed it on behalf of himself and African-American employees who worked at GE from May 2001 to the present. A date for the trial hasn't been set.

The case has grabbed headlines because it's highly unusual for high-ranking executives to bring suit against their employers. The suit has become a public relations nightmare for GE.

"Mr. Thomas chose to go out of his way through counsel to publicize allegations that GE believes significantly distort our actions in terms of diversity, compensation and promotions," says Ken Resnick, senior counsel for litigation and preventive law for GE Transportation in Cincinnati, Ohio.

The case highlights the need for corporations to have internal processes in place to resolve discrimination complaints, and effectively implement those processes before disputes become lawsuits.

High-Profile Complaint

GE does have policies that it says promote diversity in its workforce, but Thomas argues that despite the stated policies, black employees are paid less and promoted less frequently companywide.

Thomas' suit seeks class status to represent other black managers and professionals at GE who have experienced discrimination. Thomas claims the company systematically underpays black managers and refuses to promote them. Approximately 4,500 African-Americans work at GE, which means the company could be exposed to significant liability if the court certifies the class.

Thomas' attorney, David W. Sanford, partner at Sanford, Wittels & Heisler in Washington, D.C., says that the statistical disparity between African-Americans' salaries and those of their white counterparts clearly indicates that GE discriminates against African-American managers.

The complaint alleges that black managers comprised 4.8 percent of the total workforce at GE in 2003 but received only 1.1 percent of the bonus pool, and only 3.6 percent of executive employees are African-American.

"The numbers don't lie. The case is pretty clear against GE," Sanford says.

GE denies the allegations that it discriminated against Thomas or against black employees as a group.

"GE has been globally recognized as a leader in diversity," Resnick says. "We do not discriminate. Our actions and policies bear that out."

Resnick emphasizes that many of GE's business units have minority executives at the helm.

"My understanding is that minorities lead around $40 billion of GE's revenue; a quarter of all GE's revenue is lead by businesses that have at their head a minority, which is very telling about the way we run our business," he says.

Still, the class action could succeed if the statistical evidence persuades the court, according to diversity expert Dr. James H. Johnson, a management professor at the Kenan-Flagler Business School at the University of North Carolina.

"It's pretty hard to say somebody intended to do something to you, but if the pattern is repeated and you have a whole cadre of people in the organization saying similar things happened to them, that's one way to show that it's institutionalized within the organization," he says.

Diversity Safeguards

Experts agree that the best way to avoid a high-profile suit such as Thomas' is to have internal policies in place to help employees resolve workplace discrimination concerns.

But even that isn't failsafe. GE says that Thomas was required, as a condition of his employment, to go through an internal dispute-resolution program, which he refused to do.

GE's internal dispute-resolution program is a multistep process, where first the employee meets with his or her manager to try to resolve any issues. If that is unsuccessful, the company gets a third-party mediator involved. And finally, the employee is required to go through arbitration if no agreement is reached in the mediation stage.

"It's a rather thorough program," Resnick says. "We've used it successfully in any number of instances. It resolves disputes in the workplace efficiently, effectively and in much shorter time than litigation."

But Johnson draws a distinction between good policy and effective implementation.

"Affirmative action gets you in the door of a company," he says. "It says nothing about how you're treated once you get there."

He believes that companies must carefully review all of their policies and procedures to ensure that there aren't inherent inequities or disparities in the way it applies to workers.

In addition, Johnson says legal departments should bring in external auditors on a periodic basis to review all the company's systems and practices to see where there are potential landmines that could lead to charges of discrimination.

"A lot of companies have good policies in the books," Johnson says. "But the devil is in the details and that is in the implementation."

Staff Writer

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