GM May Pay Up to $40 Million to Settle Bias Suit by Black Staffers

General Motors Corp. said Tuesday that it had agreed on a multimillion-dollar settlement to end a 6-year-old class-action lawsuit claiming that the leading auto maker discriminates against salaried black employees.

The settlement, if given final approval by a federal judge in Detroit, could be worth up to $40 million over the next 10 years to 10,000 current and former GM employees in Michigan, Ohio and Indiana, spokesmen for the plaintiffs said.

GM, the largest U.S. company, said the agreement calls for payment of about $3 million in immediate grants to former employees and pay raises for 1,000 current staff members.

GM has about 8,400 blacks on its U.S. salaried staff of about 90,000, not counting the company’s financing units, GM spokeswoman Patricia Molloy said.

Detroit-based GM agreed to set up a new affirmative action monitoring system to assure that blacks among its white-collar staff get equitable treatment in future promotions and raises.

In addition, all salaried employees--black or not--will be covered by a new system in which they can appeal their supervisors’ performance appraisals.

Neither the auto maker nor the plaintiffs conceded the other side’s legal claims in agreeing to settle the case.

The plaintiffs said GM’s old performance appraisal system, scrapped in late 1987, has hurt black employees since 1982.

The plaintiffs had a serious chance to win their case charging systemic bias when a judge agreed two years ago to hear the suit as a class action covering all black salaried staff in the three affected states, civil rights lawyer Dennis James said. The ruling would allow representative witnesses and statistical evidence in the case, he said.

But the Detroit attorney said an actual trial would have taken “the better part of a year,” with appeals of any ruling postponing the final resolution of the dispute for many years.

As for the settlement, “This decree will help blacks attain their rightful places in the upper management of General Motors and help ensure fairness in the decision-making process,” said the Rev. James Kennedy, a lead plaintiff who retired after 31 years with the auto maker.

GM Vice President Richard O’Brien said in a statement that the auto maker is “proud of our track record regarding equal employment and affirmative action, and I believe this agreement will further strengthen and support our existing programs and policies in this area.”

Lawyers said the agreement, contained in a five-year consent decree, calls for the following:

- GM payments from a $1.6-million fund to about 2,800 former employees.

- Raises averaging $1,000 a year for about 1,000 of the 6,800 current black staff in the three states whose pay is most out of line with their “statistical white counterparts.”

- A new “group monitoring system” for promotions to last five years and “leading to an estimated increase of 25% in black promotions.”

- A monitoring system for discretionary pay raises for five years to ensure compliance with the decree’s statistical formula. GM agreed to pay a penalty if it fails to meet specificed affirmative action goals.

- A new “individual monitoring system” giving all GM salaried employees a way to appeal supervisors’ rating of their work.

- A one-time distribution of $325,000 to be divided among 82 “anecdotal” and potential witnesses and plaintiffs.

- GM to pay all of the plaintiffs’ costs and fees in the suit, which James put at more than $200,000.

The lawyer said the cumulative value of the settlement could range from $20 million to $40 million, depending on GM’s financial health.

The figures cover increases in black employees’ current and future pay rates, benefits that are based on pay rates and their chances for promotion to higher paying jobs, James said, adding: “These are raises they otherwise wouldn’t have gotten.”