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Corporate America's Scariest Opponent

April 2, 2003
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Related Topics: Discrimination and EEOC Compliance, Diversity, Featured Article
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Cyrus Mehri, the country’s preeminent class-action attorney, is prepared tomake your job a living hell. Last fall it was the National Football League thatbecame the object of his prodigious appetite for cleansing corporate America ofracial discrimination. As he recalls it, he and cocounsel Johnnie Cochran--theJohnnie Cochran--marched into a meeting with NFL officials, looked themstraight in the eye, and declared, "We are here to change the way you dobusiness. The NFL will either change or be changed."

    And it was. Cochran and Mehri--whose extracurricular activities oncecentered on the game of chess--released a report in September titled "BlackCoaches in the National Football League: Superior Performance, InferiorOpportunities" that has riveted the sports world. Acting on the report, whichpushes for more minority hiring and stiffer penalties for teams that don’tconform, NFL commissioner Paul Tagliabue implemented a highly controversialpolicy mandating that teams interview at least one minority candidate beforehiring a head coach.

    "We’re fighting for the soul of the NFL," Mehri said at the time. "There’sthe good ol’ boy way, then there’s the fair way."

    Without a trace of bravado, he now says flatly, "I’m not scared ofanyone." He pauses. "My main social vice is that I love the NFL. That istheir misfortune."

    In the inner sanctums of many executive boardrooms, the name Cyrus Mehriinspires trepidation and even loathing. At 41, he’s proud of topping thecharts as one of the most feared lawyers in Washington, D.C., a distinctionbestowed upon him for his victories in the largest class-action racialdiscrimination lawsuits in history. The case against Texaco was settled in 1996for $176.1 million. The Coca-Cola Company settled in 2000 for a record $192.5million. Both settlements required the companies to establish independent taskforces to monitor their progress on diversity and to make legally bindingrecommendations on diversity-related human resources practices. His energiescurrently are focused on two epic discrimination lawsuits--both pending--oneagainst Johnson & Johnson, the other against Atlanta-based BellSouth.

    Allegations focus on human resources issues such as racial bias in hiring. Inthe BellSouth case, Mehri accused the phone giant of basing promotions on teststhat don’t reflect required job skills. ("BellSouth was obsessed with givingtests even though the tests had a disparate impact on minority employees," hesays.) The Johnson & Johnson lawsuit is the first class-action racialdiscrimination case involving both Hispanics and African-Americans. The casealso includes a new human resources wrinkle: entry-level bias, which relates tothe kinds of jobs minorities are hired for when they begin working at a company.Johnson & Johnson has no comment.

    Not surprisingly, Mehri is raking in the clients--and the cash. He’s asought-after speaker who might be found delivering a speech at an NAACPconvention, or enjoying a grilled aged petit filet with béarnaise sauce at a National Iranian American Council power brunch, orexpounding on theories of liability, coverage issues, and spoilation of evidencein employment cases--the subjects of a keynote address he presented in Februaryat the Employment Practices Liability Insurance conference in New York.

    Given his highly publicized class-action activities, it isn’t surprisingthat Mehri has established himself in human resources circles as a dean ofdiversity, a superstar you had better get to know while he’s still on yourside of the table, a major voice on equity and fair play in the workplace--andhow to keep employers out of courtrooms. Referring to what companies do to getthemselves into trouble, and how they can get themselves out, he says that organizations have a tendency to pay more attention to their attorneys thanto executives who manage people. "The first lesson is this: The business-sidepeople have to be in control. They give too much control to their attorneys. Often, wounds are self-inflicted. Companies get irrational. Their lawyers get overconfident.

    "HR doesn’t have enough authority," he continues. "I think that’s abig part of the problem. The biggest problems at Coke were with their HRpractices. They had almost as many job titles as they did jobs, there was noconsistent form of job posting, and promotion practices were not consistentlyapplied. This gave undue discretion to managers and prevented employees fromhaving a fair chance to compete for positions."

    Coke had cultivated an image of being extraordinarily progressive andgenerous in the African-American community, Mehri says. "Unfortunately, Coke--likeso many companies--got very arrogant and believed their own PR. They valuedminorities as consumers, but not as employees. They were focused on their external image, but not on fair employment practices.J&J is even worse."

    In Coke’s settlement agreement, the company committed itself to conductinga "top-to-bottom" review of its human resources systems and to taking "necessary action toensure fairness and equal employment opportunity." The company "also hasmade significant changes in the operational structure and authority of its humanresource department."

    Mehri, a man steeped in the writing of Martin Luther King Jr. and of HarlemRenaissance poet Langston Hughes, offers this advice: "Do your homework. Ittakes years before a case is filed. A lot of [class-action racialdiscrimination] cases could have been easily avoided if the company had listenedto an employee earlier and had paid attention. In every case, an employee wentto the company first."

Is this guy for real?
    Much like his powerful colleague Johnnie Cochran, who has worked closely withhim on various legal matters for the past three years, Mehri is a master atspinning and shaping press coverage. It is a gift that has helped him trounceimage-conscious corporations. In November of 2001, he and Cochran launched theJohnson & Johnson lawsuit with a public "Journey for Justice" rally at ahistoric AME church in Newark. More than 100 activists participated in prayersand gospel singing before boarding a school bus for the 25-mile trip to thecompany’s headquarters in New Brunswick, New Jersey. When the activists nearedtheir destination, Mehri says, he placed a cell phone call to Johnson &Johnson’s general counsel. "Hi, this is Cyrus Mehri. I’m here with JohnnieCochran to give you a complaint."

    "I understand the importance of ritual," he now says. When asked if he’ddescribe himself as a crusader, Mehri answers without hesitation. "Yes, it isa crusade. I care about these cases. Racial bias is significant in corporations.African-Americans have a very fragile hold in the middle class. They are beingshortchanged. They are not promoted equally. They are not getting stock options.They are charged more for loans. It’s time for corporations to get to the nextlevel. That means to have more fairness, more equal opportunity."

    Fighting for equal opportunity is, of course, big business. With legal feesin class-action racial discrimination suits soaring, it isn’t hard to findpeople who are disgusted by the huge sums involved. Darrell Gay, a New Yorkattorney whose minority-owned law firm specializes in labor and employment lawon behalf of employers, says he doesn’t like the tenor of what’s going on."The trend is: Let’s make a [racial discrimination] problem worse than itis," Gay says. "A lot of lawyers are into making gold. And everyone wants alottery ticket in the race-discrimination line."

    Referring to the sharp rise in the number of class-action lawsuits filedsince passage of the Civil Rights Act of 1991--and the colossal increases innumbers of plaintiffs and settlement awards--one of Gay’s colleagues, formerEEOC commissioner Reginald Jones, says that class-action attorneys have createda not-so-rosy new cottage industry. "The ballgame has changed tremendously,"Jones notes. "These class-action guys scour the land to find disgruntledemployees. Employees are all gathered under some banner--something happened tothem in their work life they don’t like. They were drunk on the job and theygot fired. ‘My boss didn’t promote me because (fill in the blank)’: race,age, disability.’’ Even if companies can win these cases, they can’tafford the PR hit.

    Coca-Cola had a vision of a line of black people miles long asking, ‘Do Ibuy Coke or do I buy Pepsi?’ They can’t afford that."

    Cyrus Mehri, Esq., is a man who elicits sharply divided opinions. To some, he’san employee’s best friend, an idealist who promotes social justice, a civilrights hero. To others, he’s a pragmatist motivated by cash, a menace tocorporate America, a human resources nightmare. For all of his successes, Mehri,who also handles securities fraud and consumer fraud, knows firsthand what it’slike to be at the receiving end when an attorney calls to inform you that youare the subject of a lawsuit. After the Coke settlement in 2000, his formerpartners, Arthur Malkin and Donald Ross, sued him, demanding their share of the$10 million legal bounty. They alleged that Mehri deposited the money into an"unauthorized secret account" and opened Mehri & Skalet, his Washington,D.C., firm. When asked about the matter, Mehri answers, "All I can say is, we had a dispute about money in the Coke case,and we resolved it amicably." The plaintiffs didn’t respond to several phonecalls.

Ever a success story
    Born on July 14, 1961, Mehri is the son of Iranian émigrés who reared theirthree children in Danbury, Connecticut. His father is an eye surgeon, his motheran artist. "It was a household where we talked politics and had highlyintellectual political discussions," he says. "Like a lot of immigrants, Igrew up really appreciating what a great country this is--all of the freedomand opportunity." He credits the rich environment at prep school withencouraging his independence and confidence, qualities that have served himwell. He graduated from Hartwick College, worked in the early 1980s as apolitical organizer for Ralph Nader, and earned a law degree in 1988 at CornellUniversity.

    A self-described progressive, he got his start in law as an associate atCohen, Milstein, Hausfeld & Toll (the firm currently representing more than500,000 female Wal-Mart employees, a suit that could become the largestsex-discrimination case in U.S. history), where he played a key role in theTexaco victory in 1996. The company turned out to be his best weapon. After acollection of audiotapes was leaked to the New York Times implying thathigh-level executives had used racial slurs, the damage was done. The companyquickly settled.

    By his own account, what distinguishes him from the competition isinvestigative prowess, dogged research skills, and an open mind. "I am moreprepared than my adversaries," he says. "I don’t take a scattershotapproach. My approach is more laser beam."

    What’s particularly interesting about the Coke case is that Mehri was ableto identify discrimination issues early on in the investigation when his legalteam received an anonymous package containing data from what appeared to bea printout of a human resources database. In reviewing the information, Mehri’steam uncovered wide disparities in pay, promotions, and evaluations. These arethe human resources areas that perk up judges and juries.

    To illustrate his own style and the way his opponents--usually richlyendowed armies of them--are wont to behave, he likes to tell a story about anincident during court proceedings in the Johnson & Johnson case. Thepresiding court official, known as the Special Master, at one point asked thecompany lawyers assembled to explain how the organization’s database worked.None could.

    "All I want to know is what will it [the data] show," a frustratedSpecial Master pleaded.

    Mehri seized the Perry Mason moment. "I’ll describe the database," heoffered cheerfully, launching into a precise account of the company dataavailable on key issues such as salary and performance profiles.

    The deft showman relishes the memory. "I was the outsider explaining howtheir database works."

    He’s also an inveterate risk-taker who accepts cases on contingency andstands to lose tens of thousands of dollars if a case tanks. "These cases arevery difficult to put together," says Pamela Coukos, one of eight attorneys inhis firm. "It’s exhausting, grueling work. With the Coke case, we had noidea whether we were taking a crazy risk or not. Cyrus is tremendouslyoptimistic."

    When Mehri and Coukos went up against the world’s largest soft-drinkcompany, they were seriously outnumbered and outspent. They sought help fromseveral Atlanta firms, but were roundly rejected. One lawyer told Mehri, "SuingCoke in Atlanta is like suing the Pope in the Vatican."

    Mehri, a husband and father of two, says he’s consumed by work and family.He typically puts in 16-hour workdays, but emphasizes, "I’m nowhere nearburnout." He describes himself as a happy, helpful person who keeps his "egoin check." He’s the first to admit that he hasn’t taken an easy careerpath, that starting his own law firm has been difficult, and that most peopledon’t comprehend the financial risks involved in launching lengthy, expensiveclass-action cases. Until two years ago, when his wife insisted he get a newcar, he drove a 1985 Toyota Tercel. He replaced it with an SUV. "You have torisk everything you have," he says. "Most people don’t have the appetitefor it. It isn’t work for the faint of heart."

    But in the past 10 years he’s become a highly respected authority in thespecialized, controversial branch of class-action law. He’s an expert on whathappens when employees feel marginalized. That’s how companies can getthemselves into the worst trouble, he says. Coke’s management, for example,was aware that blacks didn’t like the way they were treated as far back as1995, when one of the company’s leading African-American executives went toDoug Ivestor, then the company’s CEO, and presented a report detailing theproblems with racial discrimination. The report was allegedly ignored by Ivestor,Mehri says. After the Coke settlement in November of 2000, an independent taskforce was launched to ensure compliance with the agreement and to provideindependent oversight of the company’s diversity efforts. Mehri says hebelieves Coke is now headed in a very positive direction. "This next year willbe a pivotal one for the company."

    Since first meeting with unhappy African-American employees at Texaco almosta decade ago, when he was 32, Mehri has become instrumental in moving racialdiscrimination class-action lawsuits to the top of corporate America’s agenda.In her book, Roberts vs.Texaco, executive Bari-Ellen Roberts, one of theoriginal plaintiffs in the case, recalls her first meeting with him. "My firstlook at him was disappointing. I had been expecting two members of theWashington, D.C., law firm of Cohen, Milstein, Hausfeld & Toll... notjust this 30-something young guy who looked a bit like the actor Andy Garcia ona bad hair day and seemed almost as flippant." Mehri, however, quickly provedhis mettle.

    "I’d be happy not to do these cases," he says. "I work on thembecause they need to be done. I’m trying to make society more inclusive."Looking back, he attributes much of his success to his associations with thecountry’s most dazzling attorneys. "Johnnie Cochran is one of the mostgifted trial attorneys in American history," he says. "I don’t put myselfin that category. But I am good at scholarly briefs. I am strategic. I can seethe big picture.

    "What I am most proud of is being overall a good person, and that I can dogood things and do them well. That’s hard to pull off."

    Even when you aren’t scared of anybody.

Workforce, April 2003, pp. 34-41 -- Subscribe Now!

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