Sodexho, the Gaithersburg, Md.-based food-services giant, will pay $80 million to settle a race-discrimination lawsuit filed by thousands of black employees. The class-action lawsuit was filed four years ago by employees who said they were segregated within the company and denied promotions that went to less-qualified colleagues. In a statement, Sodexho's parent, Paris-based Sodexho Alliance, said the company reached the settlement in one of the biggest race-related job-discrimination cases in years as a way to "avoid protracted legal proceedings, and without admitting any liability."
The lawsuit by about 2,500 current and former employees was set for trial next month. The settlement is subject to approval by U.S. District Judge Ellen Huvelle in Washington. Officials said the company will continue to promote its diversity programs. The net expense from the settlement for fiscal year 2004-2005 is expected to represent between 20% and 25% of consolidated net income for the 2004 fiscal year at prevailing exchange rates, according to the statement from Sodexho Alliance, which has about 313,000 employees in 76 countries and is the official supplier of the U.S. Marine Corps. Total sales last year for the company amounted to about $6 billion. -- by Michael Romano