Case 33: Boeing Reverse Discrimination
Aerospace Giant Aggressively Excludes Non-Minorities

Racial Preferences = Racial Discrimination
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Boeing Racial Quotas = Discrimination Boeing's employment policies specifically favor minorities in hiring and promotions.  Boeing suppliers and subcontractors must be the "correct" race, gender and ethnicity in order to do business with the aerospace giant.
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(1) INTRODUCTION: Boeing Racial Quotas
Web Posted March 23, 2003

          Race, ethnicity and gender count very much at Boeing.  The aerospace giant recently spent $1.3 billion on race-based and gender-based programs.  Neither Boeing nor the mainstream press have reported any expenditures whatsoever on programs for white U.S. citizens or Boeing employees or suppliers of Northern European descent.

          Boeing is a huge aerospace and government and defense contractor with over $18 billion in contracts.

          No fewer than three, huge federal agencies monitor Boeing's employment practices regarding selected minorities: the U.S. Department of Justice, the U.S. EEOC, and the U.S. Department of Labor. A virtual army of tax-supported lawyers and analysts comb through Boeing's personnel records to verify the total number of, and pay scales of, each of the following categories of employee:

Boeing's Preferred Employees and Suppliers:
Black
Asian Pacific American
Subcontinental Asian American
Hispanic American
Native American
Female of any ethnicity

Boeing Index:

          In their analysis of Boeing's "enforced diversity", the U.S. Department of Labor does not take into account seniority or years of service.

          As a federal contractor, Boeing must assure the federal bureaucracy that it has hired the correct proportions of all of the above preferred race, ethnic and gender classes and that they are being paid the same as their white counterparts, regardless of seniority or performance.  The government also requires federal contractors such as Boeing to aggressively ensure that the suppliers and subcontractors they use are owned by the correct races and genders.

          By way of apology for not hiring the correct number of preferred minorities, in March 1998 Boeing reported that about 82 percent of Boeing's workforce was white, while only 6.5 percent of their workforce was comprised of Asian Americans, 6.3 percent African American, 4.3 percent Hispanic and 1 percent Native American.


(2) Race and Gender Motivated Lawsuits against Boeing

          Since 1997 alone, no fewer than five discrimination lawsuits have been filed on behalf of black employees, Asian employees, and female employees.

          Boeing chose not to contest the two largest suits, and instead agreed to pay a total of almost $20 million to settle the disputes.  Below is a summary of the three largest race and gender based lawsuits:

BLACKS
Class Action Lawsuit

Staton
v.
Boeing

CV-98-00761-JCC

          In January 1999 Boeing announced a settlement for $15 million in response to a lawsuit by black Boeing employees.  The suit was filed in U.S. District Court for the Western District of Washington State.  The presiding judge was Chief Judge John C. Coughenour, and the case number was CV-98-00761-JCC.  The case is known as "Staton v. Boeing".

          Jesse Jackson figured prominently in brokering the $15 million settlement deal, and his various tax-exempt organizations profited handsomely from his interference.

          In fact, Boeing Chairman and CEO Phil Condit made it a point to announce the settlement in a joint news conference with Jesse Jackson.

          However, on Nov. 26, 2002 the 9th U.S. Circuit Court of Appeals ruled that the method of distributing the $15 million among the individual plaintiffs, as well as the compensation to be paid to the lawyers, was suspect, and sent the case back to the District Court for review.

          Nonetheless, Boeing subsequently has spent over $1.3 billion on race and gender based initiatives.

WOMEN and MINORITIES
Dept. of Labor Audit
          The second settlement, $4.5 million, was announced by Boeing in Nov. 1999 and concerned alleged pay disparities among its female and minority workers. The settlement was agreed to after the U.S. Dept. of Labor launched no fewer than 10 burdensome and contentious audits of Boeing's pay practices around the country.

          Also, as part of a deal with Bill Clinton's U.S. Dept. of Labor, Boeing must collect and report race and gender data on anyone who merely expresses an interest in working at Boeing, not just people Boeing actually interviews.

          Additionally, Boeing must also collect and report pay and compensation of all women and minorities on an ongoing basis to the Labor Dept. This is a departure from Boeing's earlier arrangement where Labor could randomly select Boeing for an on-site audit of this data.

          The U.S. Dept. of Labor's Office of Federal Contract Compliance Programs (OFCCP) analyzed Boeing's compensation data and determined that some women and minorities were earning less than the median pay scale (as compared to white males) in their particular jobs.  The OFCCP analysis did not take into account seniority (length of time on the job) or employee reviews (how well individual employees did their jobs).

ASIANS
Class Action Lawsuit
          In May 2002 a federal judge granted class action status to a discrimination lawsuit filed by Asian employees of Boeing.  Class status was granted by the same court which heard the lawsuit by blacks: U.S. District Court for the Western District of Washington State, U.S. District Judge Robert Lasnik presiding.  As of May 2002 no settlement was on the horizon.

          Lawsuit by Blacks:  The class action by the black employees (Staton v. Boeing) is the most significant of these for two reasons. 

          First, this case very clearly illustrates the manner in which the racial quota industry is able to extort huge concessions and preferences from large employers.  In virtually all cases of this type, the employer almost never goes to the expense of proving itself innocent in a court of law.  In fact, no major "civil rights lawsuit" of this type in the past decade has ever gone to trial!

          Second, of course, the dollar amount involved -- both on the books ($15 M) and off the books (over $1.3 Billion) -- is far larger than the other cases against Boeing.


(3) Boeing's Concessions to the Quota Industry

          The settlement in Staton v. Boeing would cover all blacks employed at Boeing's U.S. operations the past one to six years. Employees must have worked at the company at least a year to be eligible for part of the award.

          Since Boeing had previously bought out McDonnell-Douglas and Rockwell, the settlement would also include former McDonnell-Douglas and Rockwell employees during the same time period.

          Notwithstanding the fact that the $15 million settlement is currently in legal limbo (see below), the proposed distribution of the spoils was as follows:

  • More than $3.25 million of the $15 million would be paid to 70 named plaintiffs and 194 other identified class members whose claims surfaced during the litigation.
  • Another $3.4 million would be distributed among roughly 3,400 other workers who had filed claims for monetary rewards.
  • Another $3.65 million would be reserved for the monitoring of the settlement by the attorneys for the black workers.
  • The plaintiffs' attorneys would receive $3.1 million and an additional $750,000 for monitoring the consent decree for the next three years.
  • In addition, Philadelphia attorney Alan Epstein, who filed a related class-action suit which was incorporated into Staton v. Boeing would receive $200,000.

          NOTE:  The individual plaintiffs, the black workers, would get a total of $6.65 million (only 44% of the settlement), while various attorneys involved in the case would receive over half of the settlement ($7.7 million).  These terms have been appealed, and the $15 M settlement was on hold as of November 2002 while the courts wrestle with the appropriate settlement vs. attorney fees.


(4) Boeing's "Off-the-Books" Race-Based Payments
of $1.3 billion dollars!

          Much more significant than the puny $15 million settlement in Staton v. Boeing, public records reveal that Boeing has also paid over $1.3 billion to keep the quota industry (Jackson et al) and the feds (Dept. of Labor, EEOC, et al) off their backs.  Below is a partial tabulation of Boeing's "off the books" racial payments:

Amount
(millions):
Minority Activity or Purpose:
$3.7 M Boeing "equal opportunity and diversity training" initiatives
$500 M Shortly after the settlement announcement, Boeing proudly announced that it had given $500 million in contracts to 3 minority-owned investment banks who have financial ties to Jackson's Chicago-based Rainbow-PUSH Coalition. The contracts are for management of the company's pension funds and defined benefit trusts. This is a common tactic of Jesse Jackson's "Wall Street Project" racial extortion racket.
$1.0 M Boeing St. Louis gave $1 million to the National Minority Supplier Development Council (NMSDC) Business Consortium Fund (BCF). The BCF provides contract financing to certified ethnic minority businesses across America through a network of local participating certified lending banks and regional councils.

Last known link:
http://www.stlbizdiversity.com/bp/bp20.asp -- requires subscription to view.

$0.225 M Boeing appointed Rosalind Crenshaw, a supplier diversity specialist, to act as Boeing's liaison to Jesse Jackson's Rainbow/PUSH organization. 25% of Ms. Crenshaw's salaried Boeing job is to be devoted to Rainbow/PUSH activities. (Boeing news release).

Last known link:
http://www.sea-launch.com/news/releases/2000/news_release_000404a.html

If Ms. Crenshaw is earning $200,000/year + benefits of $100,000/year = $300,000 then 1/4 of that amount is $75,000.  Estimate an additional $150,000 in Jesse Jackson-related corporate expenses for Ms. Crenshaw (clerical support, travel, lodging) for an annual total of $225,000.

$0.15 M Boeing St. Louis provides four scholarships annually for owners of minority businesses to attend the J. L. Kellogg School of Business for the Advanced Management Training Program operated by the exclusive and very expensive Northwestern University, and two scholarships annually to attend the Minority Business Executive Program at the Tuck Business School (operated by the extremely exclusive and expensive Dartmouth University).

Last known link:
http://www.stlbizdiversity.com/bp/bp27.asp -- requires subscription to view

Kellogg (Northwestern): typical tuition is $12,000 per semester for 4 1-unit classes, or $24,000 per year.  X 4 1-year scholarships = $96,000 exclusive of room and board.

Tuck Business School (Dartmouth) $28,704 / year X 2 1-year scholarships = $57,408 exclusive of room and board.

$0.1 M Boeing has also "donated" hundreds of thousands of "off the books" funds to Jesse Jackson for "sponsorship" of Jesse Jackson fund raisers, conventions and dinner galas. One such dinner gala -- a black tie affair for which Boeing had paid over $100,000 in "sponsorship" fees -- raised an additional $2.1 million in a race-based shakedown of corporate America to support Jesse Jackson's Citizen Education Fund (CEF). The CEF is the fund from which Jackson cut a $40,000 check to Jackson's mistress, Karin Stanford, who bore his out-of-wedlock child. (The IRS subsequently ruled that Jackson's use of these tax-exempt funds "to avoid a lawsuit" was a permissible use of taxpayer funds!)
$0.25 M Also, as a direct result of his intervention in the Boeing dispute, Jackson received at least $250,000 from Boeing for his Citizenship Education Fund (CEF).
$800 M In the first 9 months of 2001 alone Boeing boasted that it had issued $800 million in contracts and supply orders to minority-owned and women-owned businesses as part of their so-called "Supplier Diversity Program".
$0 Programs for Caucasian males, Caucasian male employees, businesses, subcontractors and suppliers owned by Caucasian males.  Boeing pointedly does not list any such expenditures.   We therefore presume they are zero.
TOTAL:

$1,305.4
million

Boeing's total, publicly disclosed, race-based expenditures (exclusively for minorities and women) are at least $1.3 billion ($1,305,425,000.00)

(5) Other Boeing Race-Based Initiatives

          As part of the settlement, and regardless of whether the courts ultimately approve the $15 million cash award in Staton v. Boeing, and independent of Boeing's $1.3 billion of "off books" race and gender payments, Boeing has also agreed to implement the following race-based and gender-based remedies to the alleged discrimination.  The cost of these items is difficult to guage.

* Hire an independent consultant to examine Boeing's internal equal employment opportunity complaint process. (Plaintiffs had accused Boeing of having discriminatory and ineffective practices.) Boeing agreed to change its complaint procedures if the consultant believes it is necessary.
* Change its promotion practices for minority employees. Upon demand by any aggrieved minority, Boeing has agreed to explain why a given minority didn't receive a promotion, who got it instead, the color of the person who got the promotion instead of the complaining minority, and what the person passed over would need to do to qualify for a future promotion.
* Will appoint blacks to a "review committee" outside the respective departments to review promotions into management. Blacks had charged the selection and review system was unfair because white co-workers presumably gave them biased evaluations.
* Agree to "lay off minority employees in a fair manner". (Boeing hasn't agreed to any such fairness in laying off white employees.) The black plaintiffs accused Boeing of laying off blacks who had more seniority than white co-workers. Boeing allegedly did this by shifting whites with lower seniority whom they wanted to retain to different jobs which wouldn't be affected by the layoffs.

SIDEBAR: Several white Boeing employees have complained that the aerospace giant has used precisely these same tactics to eliminate white employees, particularly those over 40 years old.  

* Jesse Jackson has also insisted that Boeing name at least one black to its board of directors.

(6) Cash Award to Black Boeing Employees Delayed by Court

          On November 26, 2002 the Ninth Circuit Court of Appeals threw out the $15 million settlement in the class-action case accusing Boeing Co. of discriminating against 15,000 black employees.

          The 9th U.S. Circuit Court of Appeals objected to the $4 million in attorneys' fees under the 1999 settlement, and the large disparity in the payments provided to the employees.

          The three judge 9th Circuit Court of Appeals panel ruled 2 to 1 that the settlement deal was unsatisfactory. In her majority opinion, Circuit Judge Marsha Berzon said there was no justification for some employees receiving 16 times more than others. The 9th Circuit Court of Appeals also ruled that the $3.85 million in attorneys' fees was not justified and provided an incentive for plaintiffs' attorneys to undermine their own clients in the interest of earning huge legal fees. Alan Epstein, a Philadelphia lawyer who was representing about 2,000 Boeing employees who objected to the 1999 settlement deal, said the 9th Circuit decision means the case will have to be litigated or a new settlement approved.


(7) Boeing's "Supplier Diversity Program"

          Whether or not any of the racial lawsuits against Boeing succeed, the firm nonetheless has implemented a very aggressive "Supplier Diversity Program".  The program gives a huge preference to firms owned by selected minorities and pointedly does not give any special preference to suppliers owned by white males.  Boeing's "Supplier Diversity Program" also makes it unlikely that new suppliers owned by white males will be able to obtain business from Boeing.

          On Boeing's supplier registration web page, they require applicant firms to supply the following racial information:

1. Indicate the race, gender, and ethnic origins of the majority owners of the business. Boeing doesn't recognize "European American" or "white". The categories Boeing recognizes on its supplier form are:
African American (black)
Asian Pacific American
Subcontinental Asian American
Hispanic American
Native American
2. Provide evidence of "official certification" by the U.S. SBA as a minority-owned or "historically disadvantaged" (non-white-owned) business.
3. Indicate membership in minority oriented or woman oriented business organizations, such as:
National Minority Supplier Development Council
National Association of Women Business Owners

          Boeing also requires its existing subcontractors / suppliers to aggressively hire second-tier minority-owned firms "to the maximum extent practicable" and requires them to sign the following agreement (quoted directly from Boeing's standard supplier contract):

Boeing Shared Services Second Tier Supplier Program Requirements

1. Seller agrees to actively seek out and provide the maximum practicable opportunities for small businesses, small disadvantaged businesses or minority business enterprises, women-owned small businesses (collectively referred to as SBs); historically Black colleges and universities and minority institutions (collectively referred to as HBCU/MIs) and Veteran-owned small and service disabled veteran-owned small to participate in the subcontracts it awards to the fullest extent consistent with the efficient performance of its contract.
2. Seller's proposed level of subcontract awards to SBs and HBCU/MIs will be an element in the evaluation of its proposal.
3. Seller's target goals for utilization of small businesses, small disadvantaged businesses or minority business enterprises, women-owned businesses, and historically black colleges and universities and minority institutions under this contract as a percentage of the total contract price are as follows:
(Here the seller / supplier must provide Boeing with the percentages of the specified races, genders and ethnicities in its proposal to become a Boeing supplier.)
Last known link:
http://www.nmbc.biz/programs/best_practices/contract

          According to the January 2002 issue of The Boeing Company Supplier Diversity Programs Newsletter":

"[Boeing defines suppliers] as disadvantaged if they are 51 percent unconditionally owned and controlled by one or more people who are members of specified socially disadvantaged groups.  African - Americans, Asian - Pacific - Americans, Hispanic - Americans, Native - Americans and subcontinent Asian - Americans are presumed to be socially disadvantaged. Besides being members of these groups, individuals must have a net worth of less than $750,000, excluding the value of the business and personal residence."

Last Known Link:
http://www.boeing.com/companyoffices/doingbiz/terms/sbsdb/sdpnews/602/6_02newsletter.html


(8) Boeing Political Support of Racial Quotas

          According to the Seattle Times, during Washington State's Initiative 200 campaign Boeing contributed $50,000 to opponents of the initiative in order to retain racial preferences in the state.  In spite of Boeing's efforts, I-200 was approved by the voters by an overwhelming majority.

          Boeing has also filed an extensive amicus brief with the U.S. Supreme Court in support of the University of Michigan's racial quotas in admissions.


(9) Sources, Background and Links

Please see http://adversity.net/c33_boeing_news01.htm for detailed references and news links.


END Case 33: Boeing

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*  We use the term reverse discrimination reluctantly and only because it is so widely understood.  In our opinion there really is only one kind of discrimination.