Coca-Cola has pressed pause on a controversial “diversity plan” after what Fox News described as an “intense backlash,” and the company’s general counsel, Bradley Gayton, who authored the plan, has now abruptly resigned.
As the Daily Wire reported back in February, “Coca-Cola debuted a new policy this year implementing a diversity quota for the outside counsel it retains, saying it will only hire law firms that commit to providing 15 percent of billed time from black attorneys, higher than the percentage of African Americans in the U.S. population.” Law firms working with the soft drink giant, were also required, under the new policy, to “commit that at least 30% of each of billed associate and partner time will be from diverse attorneys, and of such amounts at least half will be from Black attorneys.”
The soft drink titan also passed the “diversity” on to its employees. In a series of slides leaked to media, a company working with Coca-Cola to provide corporate training encouraged Coke employees to “be less white” in an effort to create a more welcoming and racially diverse workplace.
Gayton reportedly authored the law firm diversity plan after viewing websites for firms providing Coca-Cola’s outside counsel and seeing mostly white headshots.
“I write you with a heavy heart,” Gayton said in a letter to outside counsel firms, according to the Daily Wire. “Gayton declared that Coca-Cola’s previous efforts to promote diversity ‘are not working’ as apparent from the ‘alarming number of new partner headshots’ with an ‘obvious lack of diversity.’”
‘The hard truth is that our profession is not treating the issue of diversity and inclusion as a business imperative,” Gayton wrote in his letter. “We have a crisis on our hands and we need to commit ourselves to specific actions that will accelerate the diversity of the legal profession.”
Legal experts, Fox Business noted, questioned “whether Gayton’s policies violated Title VII of the Civil Rights Act of 1964, which says employers can’t treat people differently based on their race.”
“Legal defense foundation Project on Fair Representation published an open letter to Coca-Cola last week warning that Coke’s outside counsel ‘racial quota requirements’ are ‘unlawful,’” the outlet added.
Republican leaders announced boycotts and state and federal legislators warned that if Coca-Cola and other high-profile corporations did not stay out of politics that they could lose tax breaks at the state and federal levels. It’s not clear whether the boycotts or the threats of rescinding tax breaks worked, but Coca-Cola’s stock was down around 12% in January. The company plans to report first-quarter profits shortly.
In late April, Coca-Cola quietly announced that Gayton had departed his role as general counsel with a “golden parachute” — an unusual event given that Gayton had worked for the company for less than a year.
“As part of the [separation] agreement, [Gayton] will receive a $4 million sign-on payment and a monthly consulting fee of $666,666, beginning this month and ending April 2022,” the company reported, according to BusinessWire, which listed Gayton’s new role as helping to “drive certain key objectives,” without further explanation.
Notably, the new general counsel for Coca-Cola, Monica Howard Douglas, who was hired from inside the Coca-Cola family, is unlikely to carry forward with Gayton’s plan and would say only that the company has “paused” its diversity hiring plan.
‘Douglas reportedly offered a few hints about the fate of Gayton’s diversity plan, though concrete details remain elusive,” Law.com said on the hire.
“When asked about Gayton’s diversity initiative, Douglas indicated that Coca-Cola was ‘taking a pause for now’ but would likely salvage some parts of the plan,” the outlet noted, citing a source. Douglas didn’t provide any additional details about what would remain and what would be scrapped.
“She said she … plans to use some of it, but everything is being evaluated. They plan to adopt some of [Gayton’s] strategies and passions. Everything was, ‘More to come,’” Law.com’s source noted.
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