INTRODUCTION: Boeing Racial Quotas
Web Posted March 23, 2003
Race, ethnicity and gender count very much at Boeing. The aerospace giant recently
spent $1.3 billion on race-based and gender-based programs. Neither
Boeing nor the mainstream press have reported any expenditures whatsoever on programs for
white U.S. citizens or Boeing employees or suppliers of Northern European descent.
Boeing is a huge aerospace and government and defense contractor with over $18 billion in
No fewer than three, huge federal agencies monitor Boeing's employment practices regarding
selected minorities: the U.S. Department of Justice, the U.S. EEOC, and the U.S.
Department of Labor. A virtual army of tax-supported lawyers and analysts comb through
Boeing's personnel records to verify the total number of, and pay scales of, each of the
following categories of employee:
Preferred Employees and Suppliers:
of any ethnicity
In their analysis of Boeing's "enforced diversity", the U.S. Department of Labor
does not take into account seniority or years of service.
As a federal contractor, Boeing must assure the federal bureaucracy that it has hired the
correct proportions of all of the above preferred race, ethnic and gender classes and that
they are being paid the same as their white counterparts, regardless of seniority or
performance. The government also requires federal contractors such as Boeing to
aggressively ensure that the suppliers and subcontractors they use are owned by the
correct races and genders.
By way of apology for not hiring the correct number of preferred minorities, in March 1998
Boeing reported that about 82 percent of Boeing's workforce was white, while only
6.5 percent of their workforce was comprised of Asian Americans, 6.3 percent African
American, 4.3 percent Hispanic and 1 percent Native American.
(2) Race and Gender Motivated Lawsuits against Boeing
Since 1997 alone, no fewer than five discrimination lawsuits have been filed on behalf of
black employees, Asian employees, and female employees.
Boeing chose not to contest the two largest suits, and instead agreed to pay a total of
almost $20 million to settle the disputes. Below is a summary of the three largest
race and gender based lawsuits:
Class Action Lawsuit
In January 1999 Boeing announced a settlement for $15 million in response to a lawsuit by
black Boeing employees. The suit was filed in U.S. District Court for the Western
District of Washington State. The presiding judge was Chief Judge John C.
Coughenour, and the case number was CV-98-00761-JCC. The case is known as
"Staton v. Boeing".
Jesse Jackson figured prominently in brokering the $15 million settlement deal, and his
various tax-exempt organizations profited handsomely from his interference.
In fact, Boeing Chairman and CEO Phil Condit made it a point to announce the settlement in
a joint news conference with Jesse Jackson.
However, on Nov. 26, 2002 the 9th U.S. Circuit Court of Appeals ruled that the method of
distributing the $15 million among the individual plaintiffs, as well as the compensation
to be paid to the lawyers, was suspect, and sent the case back to the District Court for
Nonetheless, Boeing subsequently has spent over $1.3 billion on
race and gender based initiatives.
|WOMEN and MINORITIES
Dept. of Labor Audit
The second settlement, $4.5 million, was announced by Boeing in Nov. 1999 and concerned
alleged pay disparities among its female and minority workers. The settlement was agreed
to after the U.S. Dept. of Labor launched no fewer than 10 burdensome and contentious
audits of Boeing's pay practices around the country.
Also, as part of a deal
with Bill Clinton's U.S. Dept. of Labor, Boeing must collect and report race and gender
data on anyone who merely expresses an interest in working at Boeing, not just people
Boeing actually interviews.
Additionally, Boeing must also collect and report pay and compensation of all women and
minorities on an ongoing basis to the Labor Dept. This is a departure from Boeing's
earlier arrangement where Labor could randomly select Boeing for an on-site audit of this
The U.S. Dept. of Labor's Office of Federal Contract Compliance Programs (OFCCP) analyzed
Boeing's compensation data and determined that some women and minorities were earning less
than the median pay scale (as compared to white males) in their particular jobs. The
OFCCP analysis did not take into account seniority (length of time on the job) or employee
reviews (how well individual employees did their jobs).
Class Action Lawsuit
In May 2002 a federal judge granted class action status to a discrimination lawsuit filed
by Asian employees of Boeing. Class status was granted by the same court which heard
the lawsuit by blacks: U.S. District Court for the Western District of Washington State,
U.S. District Judge Robert Lasnik presiding. As of May 2002 no settlement was on the
Lawsuit by Blacks: The class action by the black employees (Staton
v. Boeing) is the most significant of these for two reasons.
First, this case very clearly illustrates the manner in which the racial quota industry is
able to extort huge concessions and preferences from large employers. In virtually
all cases of this type, the employer almost never goes to the expense of proving
itself innocent in a court of law. In fact, no major "civil rights
lawsuit" of this type in the past decade has ever gone to trial!
Second, of course, the dollar amount involved -- both on the books ($15 M) and off the
books (over $1.3 Billion) -- is far larger than the other cases against Boeing.
(3) Boeing's Concessions to the Quota Industry
The settlement in Staton v. Boeing would cover all blacks employed at Boeing's U.S.
operations the past one to six years. Employees must have worked at the company at least a
year to be eligible for part of the award.
Since Boeing had previously bought out McDonnell-Douglas and Rockwell, the settlement
would also include former McDonnell-Douglas and Rockwell employees during the same time
Notwithstanding the fact that the $15 million settlement is currently in legal limbo (see
below), the proposed distribution of the spoils was as follows:
- More than $3.25 million of the $15 million would
be paid to 70 named plaintiffs and 194 other identified class members whose claims
surfaced during the litigation.
- Another $3.4 million would be distributed among
roughly 3,400 other workers who had filed claims for monetary rewards.
- Another $3.65 million would be reserved for the
monitoring of the settlement by the attorneys for the black workers.
- The plaintiffs' attorneys would receive $3.1
million and an additional $750,000 for monitoring the consent decree for the next three
- In addition, Philadelphia attorney Alan Epstein,
who filed a related class-action suit which was incorporated into Staton v. Boeing would
NOTE: The individual
plaintiffs, the black workers, would get a total of $6.65 million (only 44% of the
settlement), while various attorneys involved in the case would receive over half of the
settlement ($7.7 million). These terms have been appealed, and the $15 M settlement
was on hold as of November 2002 while the courts wrestle with the appropriate settlement
vs. attorney fees.
(4) Boeing's "Off-the-Books" Race-Based Payments
of $1.3 billion dollars!
Much more significant than the puny $15 million settlement in Staton v. Boeing, public
records reveal that Boeing has also paid over $1.3 billion to keep the
quota industry (Jackson et al) and the feds (Dept. of Labor, EEOC, et al) off their
backs. Below is a partial tabulation of Boeing's "off the books" racial
Activity or Purpose:
"equal opportunity and diversity training" initiatives
after the settlement announcement, Boeing proudly announced that it had given $500 million
in contracts to 3 minority-owned investment banks who have financial ties to Jackson's
Chicago-based Rainbow-PUSH Coalition. The contracts are for management of the company's
pension funds and defined benefit trusts. This is a common tactic of Jesse Jackson's
"Wall Street Project" racial extortion racket.
Louis gave $1 million to the National Minority Supplier Development Council (NMSDC)
Business Consortium Fund (BCF). The BCF provides contract financing to certified ethnic
minority businesses across America through a network of local participating certified
lending banks and regional councils.
Last known link:
-- requires subscription to view.
appointed Rosalind Crenshaw, a supplier diversity specialist, to act as Boeing's liaison
to Jesse Jackson's Rainbow/PUSH organization. 25% of Ms. Crenshaw's salaried Boeing job is
to be devoted to Rainbow/PUSH activities. (Boeing news release).
Last known link:
If Ms. Crenshaw is earning $200,000/year +
benefits of $100,000/year = $300,000 then 1/4 of that amount is $75,000. Estimate an
additional $150,000 in Jesse Jackson-related corporate expenses for Ms. Crenshaw (clerical
support, travel, lodging) for an annual total of $225,000.
Louis provides four scholarships annually for owners of minority businesses to attend the
J. L. Kellogg School of Business for the Advanced Management Training Program operated by
the exclusive and very expensive Northwestern University, and two scholarships annually to
attend the Minority Business Executive Program at the Tuck Business School (operated by
the extremely exclusive and expensive Dartmouth University).
Last known link:
-- requires subscription to view
Kellogg (Northwestern): typical tuition is
$12,000 per semester for 4 1-unit classes, or $24,000 per year. X 4 1-year
scholarships = $96,000 exclusive of room and board.
Tuck Business School (Dartmouth) $28,704 /
year X 2 1-year scholarships = $57,408 exclusive of room and board.
also "donated" hundreds of thousands of "off the books" funds to Jesse
Jackson for "sponsorship" of Jesse Jackson fund raisers, conventions and dinner
galas. One such dinner gala -- a black tie affair for which Boeing had paid over $100,000
in "sponsorship" fees -- raised an additional $2.1 million in a race-based
shakedown of corporate America to support Jesse Jackson's Citizen Education Fund (CEF).
The CEF is the fund from which Jackson cut a $40,000 check to Jackson's mistress, Karin
Stanford, who bore his out-of-wedlock child. (The IRS subsequently ruled that Jackson's
use of these tax-exempt funds "to avoid a lawsuit" was a permissible use of
||Also, as a
direct result of his intervention in the Boeing dispute, Jackson received at least
$250,000 from Boeing for his Citizenship Education Fund (CEF).
first 9 months of 2001 alone Boeing boasted that it had issued $800 million in contracts
and supply orders to minority-owned and women-owned businesses as part of their so-called
"Supplier Diversity Program".
for Caucasian males, Caucasian male employees, businesses, subcontractors and suppliers
owned by Caucasian males. Boeing pointedly does not list any such expenditures.
We therefore presume they are zero.
total, publicly disclosed, race-based expenditures (exclusively for minorities and women)
are at least $1.3 billion ($1,305,425,000.00)
(5) Other Boeing Race-Based Initiatives
As part of the settlement, and regardless of whether the courts ultimately approve the $15
million cash award in Staton v. Boeing, and independent of Boeing's $1.3 billion
of "off books" race and gender payments, Boeing has also agreed to implement the
following race-based and gender-based remedies to the alleged discrimination. The
cost of these items is difficult to guage.
independent consultant to examine Boeing's internal equal employment opportunity complaint
process. (Plaintiffs had accused Boeing of having discriminatory and ineffective
practices.) Boeing agreed to change its complaint procedures if the consultant believes it
promotion practices for minority employees. Upon demand by any aggrieved minority, Boeing
has agreed to explain why a given minority didn't receive a promotion, who got it instead,
the color of the person who got the promotion instead of the complaining minority, and
what the person passed over would need to do to qualify for a future promotion.
appoint blacks to a "review committee" outside the respective departments to
review promotions into management. Blacks had charged the selection and review system was
unfair because white co-workers presumably gave them biased evaluations.
"lay off minority employees in a fair manner". (Boeing hasn't agreed to any such
fairness in laying off white employees.) The black plaintiffs accused Boeing of laying off
blacks who had more seniority than white co-workers. Boeing allegedly did this by shifting
whites with lower seniority whom they wanted to retain to different jobs which wouldn't be
affected by the layoffs.
Several white Boeing employees have complained that the aerospace giant has used precisely
these same tactics to eliminate white employees, particularly those over 40 years old.
Jackson has also insisted that Boeing name at least one black to its board of directors.
(6) Cash Award to Black Boeing Employees Delayed by Court
On November 26, 2002 the Ninth Circuit Court of Appeals threw out the $15 million
settlement in the class-action case accusing Boeing Co. of discriminating against 15,000
The 9th U.S. Circuit Court of Appeals objected to the $4 million in attorneys' fees under
the 1999 settlement, and the large disparity in the payments provided to the employees.
The three judge 9th Circuit Court of Appeals panel ruled 2 to 1 that the settlement deal
was unsatisfactory. In her majority opinion, Circuit Judge Marsha Berzon said there was no
justification for some employees receiving 16 times more than others. The 9th Circuit
Court of Appeals also ruled that the $3.85 million in attorneys' fees was not justified
and provided an incentive for plaintiffs' attorneys to undermine their own clients in the
interest of earning huge legal fees. Alan Epstein, a Philadelphia lawyer who was
representing about 2,000 Boeing employees who objected to the 1999 settlement deal, said
the 9th Circuit decision means the case will have to be litigated or a new settlement
(7) Boeing's "Supplier Diversity Program"
Whether or not any of the racial lawsuits against Boeing succeed, the firm nonetheless has
implemented a very aggressive "Supplier Diversity Program". The program
gives a huge preference to firms owned by selected minorities and pointedly does not give
any special preference to suppliers owned by white males. Boeing's "Supplier
Diversity Program" also makes it unlikely that new suppliers owned by white males
will be able to obtain business from Boeing.
On Boeing's supplier registration web page, they require applicant firms to supply the
following racial information:
||Indicate the race, gender, and ethnic origins of the majority owners of
the business. Boeing doesn't recognize "European American" or "white".
The categories Boeing recognizes on its supplier form are:
||Provide evidence of "official certification" by the U.S. SBA as
a minority-owned or "historically disadvantaged" (non-white-owned) business.
||Indicate membership in minority oriented or woman oriented business
organizations, such as:
Supplier Development Council
Association of Women Business Owners
Boeing also requires its existing subcontractors / suppliers to aggressively hire
second-tier minority-owned firms "to the maximum extent practicable" and
requires them to sign the following agreement (quoted directly from Boeing's standard
Shared Services Second Tier Supplier Program Requirements
agrees to actively seek out and provide the maximum practicable opportunities for small
businesses, small disadvantaged businesses or minority business enterprises, women-owned
small businesses (collectively referred to as SBs); historically Black colleges and
universities and minority institutions (collectively referred to as HBCU/MIs) and
Veteran-owned small and service disabled veteran-owned small to participate in the
subcontracts it awards to the fullest extent consistent with the efficient performance of
proposed level of subcontract awards to SBs and HBCU/MIs will be an element in the
evaluation of its proposal.
target goals for utilization of small businesses, small disadvantaged businesses or
minority business enterprises, women-owned businesses, and historically black colleges and
universities and minority institutions under this contract as a percentage of the total
contract price are as follows:
the seller / supplier must provide Boeing with the percentages of the specified
races, genders and ethnicities in its proposal to become a Boeing supplier.)
According to the January 2002 issue of The Boeing Company Supplier Diversity Programs
"[Boeing defines suppliers] as disadvantaged
if they are 51 percent unconditionally owned and controlled by one or more people who are
members of specified socially disadvantaged groups. African - Americans, Asian -
Pacific - Americans, Hispanic - Americans, Native - Americans and subcontinent Asian -
Americans are presumed to be socially disadvantaged. Besides being members of these
groups, individuals must have a net worth of less than $750,000, excluding the value of
the business and personal residence."
Last Known Link:
(8) Boeing Political Support of Racial Quotas
According to the Seattle Times, during Washington State's Initiative 200 campaign Boeing
contributed $50,000 to opponents of the initiative in order to retain racial preferences
in the state. In spite of Boeing's efforts, I-200 was approved by the voters by an
Boeing has also filed an extensive amicus brief with the U.S. Supreme Court in support of
the University of Michigan's racial quotas in admissions.
(9) Sources, Background and Links
Please see http://adversity.net/c33_boeing_news01.htm
for detailed references and news links.
END Case 33: Boeing