Texaco Wins, Loses on Bias Case Motions

Texaco Inc., the third-largest U.S. oil company, won a motion in federal court dismissing a wrongful-termination claim but failed in its attempt to dismiss a libel allegation that led to a $175-million racial discrimination settlement. David Keough, who was senior assistant treasurer of Texaco before being fired over the incident, brought both claims against Texaco in a $50-million lawsuit. Keough said Texaco slandered him through false statements that implied he took part in making slurs against blacks and discussions advocating destruction of documents in the discrimination case. Tapes of discussions by three Texaco executives led the White Plains, N.Y.-based company to agree to pay the settlement with black employees in 1996. Keough is one of the executives who can be heard on the tapes. U.S. District Judge Lawrence McKenna dismissed Keough’s claim of wrongful dismissal but allowed the libel charge to stand, saying in a ruling Monday that “reasonable minds could look independently at Texaco’s statements and find a defamatory connotation.” Texaco shares fell $1.50 to close at $50.50 on the New York Stock Exchange.