2 U.S. Managers Settle Bias Suit With Japanese Bosses

On the eve of a trial that might have aired the growing resentment of some American workers toward their Japanese bosses, two Americans who ran a Silicon Valley electronics firm agreed Thursday to settle a multimillion-dollar lawsuit against their Japanese former employers.

Thomas McDannold and Edward A. Neubauer had charged that NEC Electronics, a Mountain View, Calif., firm with 1,200 employees, broke its promise to give them operating autonomy from the Tokyo home office and pushed aside Americans to import more managers from Japan.

Those allegations, which attracted nationwide media attention, were dismissed early in the court proceedings. But attorneys for the two executives intended to raise the cultural friction between the Americans and their Japanese superiors--an increasing concern as Japanese ownership of American businesses grows at a geometric rate--as an issue in the case, had it proceeded to trial.

Details Secret

A jury had been selected to hear the case. But lawyers for the ex-managers and NEC Electronics came into court Thursday morning in San Jose and informed U.S. District Judge Robert P. Aguilar that they had reached a monetary settlement. Details of the agreement are secret.

Keith B. Bardellini, a Los Angeles attorney representing the semiconductor manufacturer, said the outlines of the settlement were reached late Wednesday after Aguilar strongly hinted in court that he might dismiss the case.

Bardellini said McDannold and Neubauer’s allegations of an anti-American bias at NEC were baseless. “We viewed those statements as an attempt to play on racism and bias against a group of people,” he said. “This was a case of attempting to use stereotypes to collect money when the facts were just the opposite.”

The Cost Factor

The company nonetheless agreed to settle the case, Bardellini said, because it would have cost more to fight on through an appeal.

Robert S. Kahn, a San Jose attorney representing the two former executives, declined to say why McDannold and Neubauer agreed to a settlement. They have not worked since quitting their jobs at NEC last year.

Although their allegations of mistreatment will not receive a hearing in court, Kahn said he was hopeful the former executives’ highly publicized legal battle would lead to a better working climate for Americans in Japanese-owned companies.

“We could only hope that as a result of their efforts other people will reap benefits,” he said.