Circuit City Found Guilty of Racial Bias

Electronics retailer Circuit City systematically discriminated against blacks in promotions at its corporate headquarters, a federal jury found Monday.

After a day and half of deliberations, the panel found in favor of two plaintiffs, while rejecting a third claim.

“We are shocked that the jury could find a pattern and practice of discrimination while also finding in favor of only two plaintiffs in a case that began with 11 plaintiffs,” said Richard L. Sharp, chairman and chief executive of the company.

He said Circuit City does not discriminate and that it will appeal the verdict.

Attorneys for the plaintiffs argued during the monthlong trial that none of the company’s senior managers or officers are black, few blacks have been promoted to supervisor and fewer still have been placed in managerial jobs.

Shelby McKnight, Renee Lowery and Lisa Peterson were the remaining plaintiffs in a lawsuit filed a year ago by current and former Circuit City employees. Five lawsuits were dismissed before the trial, and three were dismissed during it.

The women’s lawyers said promotion decisions at Richmond, Va.-based Circuit City are made under an “excessively subjective” personnel system that lacks written procedures and allows lower-level managers to promote employees without review. They said such a system favors whites for advancement.

The federal jury ruled in favor of Lowery and Peterson, awarding them $237,500 and $51,200, respectively. It rejected McKnight’s claim. There was no indication of a reason for the split ruling.

Discrimination in promotions “is a true problem at Circuit City,” said McKnight, who, like Lowery, still works for the company. “A lot of people know that it’s there, but they don’t acknowledge it because they in some way benefit from it.”

The verdict could open the door to more lawsuits against Circuit City because future plaintiffs would not have to again prove racial discrimination.

The company is the nation’s largest retailer of brand-name consumer electronics and major appliances. It has 439 stores, and about 3,500 employees work at its corporate headquarters, about 20% of them black.

It’s the second time in just over two weeks that a major U.S. corporation has been obliged to pay in a racial bias case. Texaco agreed Nov. 15 to pay $176.1 million to settle a racial discrimination lawsuit alleging the company’s “good old boy” network gave whites the biggest raises and promotions.

David Cynamon, one of the plaintiffs’ trial attorneys in the Circuit City case, said about 1,800 former and present black employees could come forward with claims. The claims must be based on the denial of promotion, Cynamon said, and he doesn’t know how many of the 1,800 had made requests for promotion.

The lawsuit, filed in November 1995, accused Circuit City of pervasive bias against blacks at its corporate headquarters.

A second lawsuit filed by the civil rights group, on behalf of employees at Circuit City stores in the Washington and Baltimore area, is pending.