Coca-Cola never adopted diversity plan for law firms; group that threatened suit targets other companies

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Coca-Cola never implemented a directive that required its outside law firms to use diverse lawyers for at least 30% of their billed attorney time on new matters.

The company’s current general counsel, Monica Howard Douglas, told shareholders in a Feb. 7 letter that the diversity requirements “have not been and are not a policy” at Coca-Cola, according to Bloomberg Law. The company confirmed the authenticity of the letter to Bloomberg and told Law360 that the plan was put on pause.

Former general counsel Bradley Gayton had announced the directive in a January 2021 letter to outside law firms. He resigned from his post about three months later but stayed on as a “strategic consultant” to Coca-Cola.

The American Civil Rights Project, which opposes affirmative action, had threatened to sue Coca-Cola over the policy. The group said the plan amounted to illegal race discrimination, and Coca-Cola was breaching its fiduciary duty to investors.

The American Civil Rights Project has also threatened to sue the McDonald’s Corp., the Starbucks Corp. and Novartis AG over diversity policies, Reuters reports.

McDonald’s has diversity goals for the composition of its senior leadership, Starbucks has diversity goals for workers and suppliers, and Novartis has a preferred program for outside law firms that commit to diversity minimums, according to the American Civil Rights Project.

Under Gayton’s never-implemented plan:

• Law firms would have to commit that at least 30% of associate and partner time on new matters would be billed by diverse lawyers. Of that amount, at least half of the billable hours would go to Black lawyers.

• If firms couldn’t meet diversity commitments internally, they could work with other firms to assemble teams that qualify.

• If firms failed to meet the commitment over two quarterly reviews for new matters, their fees would be reduced by 30% for the matters going forward until the commitment was met.

• Firms that didn’t meet the goals over time wouldn’t be considered for new work.

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