Coca-Cola Agrees to Pay $475,000 to Settle OFCCP's Claims for 1,300 Female Applicants

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By Jay-Anne Casuga

Sept. 8 — A Coca-Cola bottler in Oklahoma has entered into a $475,000 conciliation agreement with the Labor Department's Office of Federal Contract Compliance Programs to settle agency allegations that the company discriminated against a class of 1,293 female applicants, the DOL announced Sept. 4.

According to the Labor Department, the OFCCP in June 2009 conducted a compliance review of Great Plains Coca-Cola Bottling Co.'s hiring practices at its bottling and distribution facility in Oklahoma City.

The OFCCP concluded that female applicants “were much less likely to be hired than similarly situated male applicants” for merchandiser, driver, driver trainee, production and warehouse positions during a two-year period beginning June 2007, the agency said.

A DOL spokeswoman Sept. 8 told Bloomberg BNA that OFCCP investigators interviewed employees and found a “widespread perception that women were not suited to certain jobs because of their physical nature,” such as those requiring heavy lifting.

She added that “no validated pre-offer test was applied to back up these stereotypes.”

“This resulted in disparate treatment of female job applicants, which is further supported by the statistical analysis,” the spokeswoman said.

OFCCP Found Statistical Bias Indicators

The DOL spokeswoman said the OFCCP initiated its compliance review of the Great Plains facility on June 16, 2009, and reviewed the company's employment practices between June 16, 2007, and June 15, 2009.

She said employee interviews conducted by OFCCP investigators revealed sex-based stereotypes about the ability of female workers to perform more physically demanding positions.

Under the Uniform Guidelines on Employee Selection Procedures (UGESP), which the OFCCP adopted in 1978 and codified at 41 C.F.R. part 60-3, a federal contractor with a selection procedure that is determined to have an adverse impact on a protected group must show that it is “job-related and consistent with business necessity” in order to avoid liability under Executive Order 11,246.

Employers can demonstrate a selection procedure's job-relatedness through “test validation” analyses outlined by the UGESP.

The spokeswoman said Great Plains didn't show that it applied a validated pre-offer test “to back up” the alleged discriminatory perception about female workers and physical jobs.

The OFCCP's finding was “further supported” by a statistical analysis of Great Plains's hiring process, she said.

“For example, 20 percent of male applicants were hired as drivers compared to only 8 percent of female applicants,” the spokeswoman said. “An analysis of driver applicants showed a standard deviation of 7.19. A standard deviation of six indicates only a two in one billion chance that the female job applicants would have experienced the same outcome in a completely fair process sans discrimination.”

Settlement's Other Terms

In addition to the settlement's monetary award, the DOL said Great Plains agreed to offer positions to up to 116 qualified class members.

“The company has also already made necessary changes to the policies, practices and procedures it uses to recruit, track and hire applicants for these positions,” the DOL said.

OFCCP investigators interviewed employees and found a “widespread perception that women were not suited to certain jobs because of their physical nature,” such as those requiring heavy lifting, a DOL spokeswoman told Bloomberg BNA.

For example, the department spokeswoman said OFCCP investigators found that Great Plains during the compliance review period used three different hiring processes, which included paper, telephone and kiosk applications.”

“Since that time the company has moved its application process to an entirely electronic system,” she said. “This electronic system will assist the company with accuracy, consistency and applicant tracking.”

She added that the company also has eliminated the “pre-employment assessment test that was in place throughout the review period” and has agreed to provide the OFCCP with the updated policy in its entirety as part of its reporting requirements.

Coca-Cola Denies Allegations

A Coca-Cola Refreshments spokesman Sept. 8 told Bloomberg BNA that “there have been no admissions of wrongdoing or findings of liability” against the company.

He added that Great Plains was an independent bottler during the OFCCP's compliance review. Coca-Cola Refreshments, he said, acquired Great Plains on Jan. 1, 2012, while the review was pending.

“CCR fully cooperated in resolving this review and entered into the conciliation agreement on behalf of Great Plains as an efficient and cost-effective resolution of the OFCCP's review,” the Coca-Cola Refreshments spokesman said.

He said the companies “remain committed to the affirmative action and equal employment opportunity standards enforced by the OFCCP, and strive to ensure that all its operations provide equal employment opportunities to every individual.”

The DOL spokeswoman said Great Plains has held multiple federal contracts. For instance, she said it had a $1.4 million contract with the Army and Air Force Exchange to provide soft drink vending at Tinker Air Force Base in Oklahoma City.

Previous Settlements With Coca-Cola Companies

The OFCCP previously has reached settlements with other Coca-Cola bottlers, as well as the parent company.

In October 2010, Coca-Cola Bottling Co. Consolidated in North Carolina agreed to pay $495,000 to settle OFCCP claims that it engaged in race discrimination in hiring against a class of 95 black and Hispanic applicants for sales support positions.

In May 2002, Coca Cola Co. agreed to pay $4.2 million to more than 2,000 women and minority employees whom the OFCCP alleged were underpaid at the company's corporate headquarters in Atlanta.

To contact the reporter on this story: Jay-Anne B. Casuga in Washington at jcasuga@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com