October 30, 2006

ILLINOIS COMPANY TO PAY $5 MILLION TO SETTLE CLASS ACTION DISCRIMINATION LAWSUITS

On October 5, an Illinois federal judge approved a $5 million preliminary consent decree to resolve two consolidated class action employment discrimination lawsuits against the Woodward Governor Co., a global provider of engine systems and parts (Bell v. Woodward Governor Co., N.D. Il., No. 03-50190; EEOC v. Woodward Governor Co., N.D. Il., No. 06-50178). The court will make a final determination as to the fairness of the preliminary consent decree at a hearing scheduled for February 2007.

The company denied that it had engaged in any policies or practices of discrimination.

Allegations:
Sixteen current and former minority and female employees brought the lawsuits in May 2003. They alleged Woodward discriminated against African-Americans, Hispanics, Asians, and women in the areas of pay, promotion and training in violation of Title VII and the Equal Pay Act.

Employee complaints also triggered an investigation by the EEOC, which determined in December 2005 that the company did discriminate against both minorities and females. The EEOC found that minority employees were paid at a lower rate than their white counterparts, were promoted at a slower rate and were less often chosen for training programs that led to promotions. The agency also determined that the company failed to properly maintain records on its minority employees. The EEOC found that female employees were paid less than males, but it did not find discrimination against females in training, promotions, or recordkeeping.

Monetary Relief:
Pending final approval of the consent decree, the company will create a settlement fund of $4.8 million that will increase to $5 million with interest. Of the $5 million settlement fund, $2.4 million is allocated for the class members in the race discrimination lawsuit employed at the Rockford or Rockton, Illinois facilities any time since May 1999. $2.6 million is allocated for current and former female workers who were employed at those facilities since June 2002. Workers can elect to opt out of the settlement, and any remaining funds will be given to a local college, where it will be used to advance the interests of females and minorities.

Non-Monetary Relief:
In addition to the $5 million settlement, the decree also requires Woodward to install several initiatives aimed at preventing discrimination. The decree requires that an industrial psychologist conduct analyses of jobs that were the subject of the lawsuits to provide a foundation for nondiscriminatory adjustments in job assignments and compensation at the facilities.

The decree also designates Nancy B. Kreiter of Chicago to serve for the duration of the decree for the purpose of overseeing Woodward’s implementation of and compliance with the terms of the decree, and to provide advice and assistance to the company. Kreiter will report annually to the court with respect to Woodward’s progress in implementing the decree. She formerly was a court-appointed consent decree monitor in EEOC v. The Dial Corp. and EEOC v. Mitsubishi, both multi-million dollar sexual harassment class actions, and she was also the research director of Women Employed in Chicago.

Addressing Systemic Problems:
John Hendrickson, the EEOC’s regional attorney in Chicago, said the agency was more than satisfied with the consent decree saying, “Finally, the comprehensive oversight which is assured by Nancy Kreiter’s appointment means that this is not going to be merely a short-term monetary fix. Instead, we are expecting to see, over the long term, broad implementation of both the letter and spirit of the decree – real systemic change – which will bring about concrete and long lasting equality of opportunity.”

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