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A Different Cola War


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A Different Cola War

An activist lawyer accuses Coca-Cola of discrimination

Activism is in Cyrus Mehri's DNA. Born on Bastille Day to Iranian parents who fled the Shah to raise their children in the U.S., Mehri marched against the Vietnam War at age nine. Mehri's first job out of Cornell Law School was with Ralph Nader. And in private practice, Mehri has brought successful public interest cases against Westinghouse, Fina, and Sikorsky Aircraft. Mehri's biggest victory was as part of the team that sued Texaco Corp. for racial discrimination and won a $176 million settlement. Mehri unearthed tapes of Texaco managers making racist comments in meetings and leaked them to The New York Times.

But Mehri's latest target may be his toughest yet. In a potentially explosive suit filed Apr. 22, Mehri has accused the Coca-Cola Co. of systemic discrimination against black employees--even drawing upon what he claims are internal Coke documents showing stark differences in pay, promotions, and performance reviews between white and black employees. Coke categorically denies the allegations and vows to mount a vigorous defense. "I think we've made great strides in developing a gold standard for diversity management," says Carl Ware, Coke's group president for Africa and its most senior black executive. On May 26, the company said Ware will co-head a new diversity council reporting to CEO Douglas Ivester.

Mehri believes he has hit a nerve with the suit, claiming that nearly 100 current and former Coke employees have approached him, eager to join a class action. "I've never had so much evidence this early in any case," says Mehri, who predicts that his next filing, asking for class-action status, "is going to blow people's minds."

Still, Coke will likely be a tougher foe than Texaco. Coke has strong ties to civil-rights groups, dating back to the 1960s when the company pushed for desegregation in Atlanta. Even Mehri, who opened his own firm last fall, admits he couldn't persuade any of the top anti-discrimination law firms to support his case. "Suing Coke in Atlanta is like suing the Pope in the Vatican," one lawyer warned him, he says.ENOUGH METTLE? And there are legal hurdles. Experts say it's notoriously difficult to persuade judges to award class-action status in discrimination suits--and equally hard to prove individual problems are part of a pattern. "The Texaco case was really extraordinary," notes Laura Sager, a professor at New York University School of Law.

Privately, some former foes question whether the 37-year-old Mehri has the experience to prevail against Coke. Former opponents say his zeal sometimes prevents him from settling, even when it is the best move for his clients.

Even in the Texaco case, Mehri came under fire for his relationship with the whistleblower. Richard Lundwall was a disgruntled worker who approached Mehri with the tapes in hopes he'd represent him in an age-discrimination suit. Lundwall assumed his conversations with the lawyer were privileged. But he later found out otherwise: Mehri became a government witness when Lundwall and another Texaco executive were prosecuted for plotting to conceal documents--charges on which both men were acquitted. "Mehri seduced Lundwall and led him to believe he would represent him, just to get the tapes," fumes Lundwall's attorney, Ethan A. Levin-Epstein. Mehri says he told Lundwall he was legally prevented from taking his case, a defense he says was borne out in court.

Clearly, Mehri is determined to right perceived wrongs. But does he have the right stuff to win against Coke?By Dean Foust in Washington


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