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Sodexho Settles Discrimination Suit for $80 Million

A food and facilities-management company, with clients including a Southern Baptist seminary, agreed to pay $80 million to settle a lawsuit claiming it systematically denied promotions to black managers.

Sodexho, Inc., agreed April 27 to settlement of a class-action suit filed in 2001 by 10 mid-level African-American managers who claimed they were passed over for promotion in favor of less-qualified whites or assigned to “black accounts,” such as in inner-city hospitals or historically black colleges, where most of the other workers and customers were also black.

The company did not admit liability but said it agreed to settle the case in order to avoid protracted legal proceedings. The suit, involving some 3,000 black salaried workers, was the largest racial discrimination suit over promotions ever against a private employer and could have cost Sodexho as much as $1 billion, according to media reports.

Sodexho, Inc., based in Gaithersburg, Md., is the leading provider of food and facilities management in North America, with $6 billion in annual sales and more than 120,000 employees. The company out-sources food services, housekeeping, grounds keeping and other services for 6,000 corporations; healthcare, long-term care and retirement centers; schools; college campuses and military sites.

Baptist-related schools using Sodexho’s services include Wayland Baptist University and Houston Baptist University in Texas, Ouachita Baptist University in Arkansas, Georgetown College in Kentucky and Jerry Falwell’s Liberty University in Lynchburg, Va.

Southern Baptist Theological Seminary in Louisville, Ky., recently turned its campus maintenance over to Sodexho, laying off 94 seminary employees, many of whom were rehired by Sodexho.

EthicsDaily.com ran stories reporting on Sodexho’s diversity policy, which includes gay-friendly initiatives such as domestic-partner benefits, celebration of Gay Pride Month on the corporate calendar and recognition of a homosexual employee network group to lobby for input and support diversity efforts.

A column in the Louisville Courier-Journal and an editorial in a Baptist state newspaper questioned why the seminary’s administration, which has been outspoken in opposition to same-sex marriage and the “homosexual agenda,” would turn over its campus maintenance to a company openly identified as gay-friendly.

A spokesman for Southern Seminary defended the Sodexho contract in an April 19 Western Recorder commentary, reporting that a written agreement requires Sodexho employees to conform to behavioral standards set by the seminary.

“Southern is not changing principles for a pagan corporation,” wrote Hershael York, an associate dean at the seminary and current president of the Kentucky Baptist Convention, “but has, in fact, made the corporation adjust to Southern.”

Sodexho managers falling under the class-action suit could receive as much as $60,000 each under the settlement, while the 10 original plaintiffs could receive $120,000. In addition, Sodexho agreed to further advance programs promoting diversity and inclusion.

Sodexho officials said they have already implemented many of the remedies in the settlement, including rewarding top executives with bonuses tied to achieving diversity goals.

According to the Washington Post, the Sodexho case is part of a larger movement of using civil-rights laws, which were enacted to combat discrimination in hiring, to fight more subtle forms of exclusion.

Coca Cola, a much larger company, paid $192.5 million to settle a race-discrimination suit in 2000. Five black employees at BellSouth are seeking to have their discrimination case declared a class action, which could involve as many as 15,000 employees.

Wal-Mart is facing a suit involving 1.6 million current and former female employees alleging the company discriminates against women in pay and promotion.

About one fourth of Sodexho’s workers are black, and about 12 percent of its managers. But according to the lawsuit, African Americans were stuck in middle management, with only 2 percent of upper-management jobs being filled by blacks.

The case isn’t Sodexho’s first brush with controversy. Sodexho U.S.A. is part of an international corporation called the Sodexho Alliance, which has been criticized for quality and nutrition of school and hospital meals, “de-skilling” the catering sector, taking jobs away from local people, anti-union activities and profiting from privatization of government services.

Without British and American government policies over the last 20 years encouraging the privatization of public services through payoffs known as “Public Private Partnerships,” Sodexho probably would have remained a medium-sized catering company, according to a profile on the UK Web site Corporate Watch. But with lucrative privatization contracts, it became a multinational giant.

British newspapers exposed Sodexho for allegedly exploiting asylum seekers at prisons run by company by seeking to pay them less than minimum wage and vouchers rather than cash. Workers could redeem the vouchers in supermarkets, but could not receive change in cash. That meant either they got less than face value of the vouchers or were encouraged to make up any shortfall in purchases they did not need.

Ties to the prison industry also won other negative publicity. In addition to providing grounds keeping and other ancillary services to prisons, Sodexho subsidiaries are also involved in management and building of for-profit prisons in several countries. After students at about 60 American colleges organized boycotts five years ago, Sodexho announced it was pulling of prison investments in the U.S. in May 2001.

The Center for Public Integrity details military contracts with the company, including the providing meals and logistical support for the U.S. Marine Corps since 1993 and a 2002 arrangement with the State Department paying Sodexho $324,000 for food products and equipment in Afghanistan. The center filed a Freedom of Information request for that contract but received no response.

Bob Allen is managing editor of EthicsDaily.com.

Previous related stories:
Company Hired by Southern Seminary Supports Diversity
Mohler Defends Contract with Gay-Friendly Firm
60 Percent of Dismissed Seminary Maintenance Workers Rehired
Baptist Newspaper Criticizes Seminary Maintenance Decision
Racial Discrimination Lawsuit Against Sodexho Headed for Trial