Mitsubishi to Pay $34 Million in Sex Harassment Case
Abandoning a two-year fight against federal charges of widespread sexual harassment at its sprawling central Illinois auto factory, Mitsubishi Motors agreed Thursday to pay hundreds of female employees a total of $34 million--the largest such settlement on record in a corporate case.
The proposed consent decree between Mitsubishi and the U.S. Equal Employment Opportunity Commission came after two months of negotiations shepherded by former federal Judge Abner J. Mikva. U.S. District Judge Joe Billy McDade still must approve the deal--a process that could be worked out in a few weeks, lawyers on both sides said.
The deal also obligates Mitsubishi to place all harassment policies and future complaints by female workers at its 636-acre plant in Normal, Ill., under the supervision of a panel of outside monitors. The three-member team will scrutinize the company for a year and report to McDade and the EEOC, said Paul M. Igasaki, the agency’s chairman.
Lawyers for the Japanese-owned auto maker deftly avoided a legal admission of guilt. But after months of insisting that harassment cases were rare, the company’s stiff payout came as a sign that a good number of the 350 women involved in the case had been wronged.
“Whatever the company did or didn’t do wrong, they’re acknowledging they have to make changes,” Mikva said.
Mitsubishi Executive Vice President Larry Greene, surrounded by company executives during a news conference to announce the settlement, said: “We of course apologize to any employee who has been harassed or retaliated against.”
For weeks after the EEOC filed its lawsuit against the company in April 1996, female workers told of enduring a horrific litany of abuses.
Female assembly-line crews told of being fondled, targeted with air guns and taunted as “bitches"--and even cruder, sexually explicit names. Phalluses and pornographic drawings were scrawled on bathroom walls. Some women said they were baldly propositioned by male workers, managers and even union officials to provide sexual services.
“The memory is still terrible,” one former worker, Pat Jetton, said soon after the case was filed. “The thought of Mitsubishi will always be spoiled for me.”
Some Contrition Shown by Mitsubishi
Despite the shocking nature of the charges, the firm’s hard-line denials and the lingering doubts that hundreds of women could have been subjected to systematic abuse for years without any corrective measures from Mitsubishi or their union--the United Auto Workers--seemed to undercut the government’s case.
Mitsubishi officials showed some contrition Thursday but still preferred to talk about the corrective moves of the coming year instead of what happened in the past. “The settlement has occurred, we’re here, we want to go forward,” Greene said.
But the company’s decision to award its female workers the record $34 million lent credence to the charges. The settlement also seemed to bolster speculation by some women’s rights groups that harassment is more widespread in the workplace than many corporations are willing to admit.
“The clear lesson is that harassment will cost companies at the end of the day,’ said Marcia Greenberger, co-president of the National Women’s Law Center in Washington.
And despite the compromise nature of the deal, the EEOC’s effort to prosecute the case may help it shed an image as a government paper tiger.
Michael D. Karpeles, a Chicago attorney who represents employers in labor disputes, said the settlement “shows the EEOC is serious about remedying what they call systemic discrimination and sexual harassment.”
“They will continue to aggressively attack large-scale harassment situations,” he added. “The message here for employers is that they should get a serious anti-harassment policy in place, enforce it and train employees about what is and isn’t acceptable.”
Although the Mitsubishi settlement is apparently the biggest ever in a sexual harassment case, a handful of other employment discrimination suits have brought even larger sums. What is believed to be the biggest settlement in an employment dispute was the $250 million won in 1992 by a group of female plaintiffs who accused State Farm of sexual discrimination in denying them jobs as sales agents.
On Thursday, one EEOC official suggested that the number of women who could claim awards from Mitsubishi could rise even higher than the 350 cases already documented.
“We expect the number of claimants to be at least 300 and maybe 100 or 200 more,” said John C. Hendrickson, a lawyer in the EEOC’s Chicago office who headed negotiations with Mitsubishi. Each woman could receive anywhere from a few thousand dollars to up to $300,000, the federal limit for a complainant, Hendrickson said.
Mitsubishi said about 20 workers were fired in 1997 for sexual harassment and several others were disciplined.
‘People Are Glad It’s Over’
Several former and current Mitsubishi workers who had complained of harassment could not be immediately reached for comment Thursday. But Patricia Benassi, a lawyer who represented 29 women in a civil lawsuit against Mitsubishi, said that many of her clients are “greatly relieved.”
“People are glad it’s over,” Benassi said. “A lot of families in central Illinois had a big stake in that plant. Mitsubishi is one of the biggest employers, and one of the best-paying around. They wanted to believe the company was doing right, but they also wanted to believe their wives and daughters would be treated like human beings.”
Benassi’s clients, who claimed they were groped and fondled on the job, settled with the company last year. Benassi would not divulge the settlement, but it was reportedly close to $10 million.
George Galland, a Chicago lawyer who worked with Benassi on the case, was named Thursday as one of the three outside monitors who will scrutinize Mitsubishi’s sexual harassment policies and complaints. The others are Nancy Kreiter, the head of Women Employed, an anti-harassment group, and Joyce E. Tucker, who headed the EEOC in the George Bush administration.
The monitors are expected to “ensure zero tolerance” of sexual harassment, Igasaki said. The team would serve as “a model to employers to emulate in dealing with the scourge of sexual harassment.”
Mitsubishi’s willingness to accede to scrutiny from a group of outsiders came in sharp contrast to the stance the company took for much of the past two years.
Just days after the EEOC filed its massive lawsuit against the firm, Mitsubishi packed more than 2,000 employees into 58 buses bound for Chicago, where they marched around the agency’s offices, chanting: “Two, four, six, eight, we’re here to set the record straight.” Months later, some workers confided that the march was orchestrated by the firm--and that some of them had been intimidated into joining the march.
The company hired former Bush administration Secretary of Labor Lynn Martin to overhaul its sexual harassment code and policies. But despite being paid $2 million, Martin did not dwell on Mitsubishi’s past abuses. And she played no role in the negotiations leading to the settlement, Mikva said.
Martin could not be reached for comment Thursday.
Mitsubishi’s response should serve as a lesson for other corporations, said Frank Cassell, emeritus professor of engineering and business at Northwestern University, explaining that the company’s refusal to acknowledge the extent of the sexual harassment early on clearly hurt it more in the end.
“The real message is that if management wants its directives on sexual harassment obeyed, it has to follow through down through the ranks,” Cassell said. The hiring of an outsider like Martin--a government official with little experience in dealing with such cases, he added--"looked a lot like window-dressing. The fact she had nothing to do with the agreement shows exactly that.”
Mitsubishi’s reluctance to take the government’s lawsuit seriously, Cassell said, also exposed the failure of its Japanese-based executives to understand the cultural nuances that should have impelled them to correct harassment at the Normal plant.
“They were micromanaging from Tokyo, and it’s pretty clear they didn’t have a clue about how to get this problem behind them,” Cassell said.
Even Mikva indirectly backed up that sentiment, acknowledging he had heard reports that Japanese Mitsubishi officials may have mistakenly conveyed the impression that sexual harassment might be tolerated by taking their American managers to sexually oriented hostess bars. The nightclubs have long been a part of Japanese business culture.
His words stung a newly appointed team of Japanese Mitsubishi officials who had crowded into a Chicago hotel where the settlement was announced. But the loss of $34 million seemed to bite even harder.
“The money,” said Koehi Ikuta, executive vice president of Mitsubishi’s American arm, “is not a small amount, I assure you.”
Times staff writer Stuart Silverstein in Los Angeles contributed to this story.