GE Official Files
Discrimination Suit
By KATHRYN KRANHOLD,
WSJ On Line, May 18, 2005
The top executive of a General
Electric Co. aviation subsidiary has filed a federal race-discrimination lawsuit
against the company, claiming it systematically pays African-American managers
less than white counterparts and fails to promote them, among other charges.
The lawsuit, filed yesterday in U.S. District Court in Bridgeport, Conn., by
Marcel T. Thomas, is seeking certification as a class action on behalf of an
estimated 4,500 African-American professional GE employees currently with the
company. It asks for more than $450 million in damages for those GE
employees. Mr. Thomas's lawyer, David Sanford, said the $450 million is
based on each potential claimant receiving $100,000 in damages.
In a statement, GE said it "flatly denies the allegations in Mr. Thomas'
complaint and will clearly defend this lawsuit."
African-American managers make up about 3.3% of GE's 180 officers, the highest
level, and 3.6% of GE's 4,500 "executive band" -- the rank Mr. Thomas achieved.
GE said such suits against the company are rare, citing its overall record for
promoting diversity, and said two of its board members and two of its 11 top
business leaders are African-American.
Mr. Thomas, 43 years old, who has a MBA and a law degree, is chief executive and
president of GE Aviation Materials, 80%-owned by GE and 20%-owned by France's
Snecma Moteurs, a unit of Snecma SA. The GE unit, which buys and refurbishes
aircraft engines and engine parts, has annual revenue of about $184 million.
GE had 2004 revenue of $152 billion.
In an interview, Mr. Thomas said he rose quickly through the ranks at GE since
joining the company in 2001. He served in the corporate office in
Fairfield, Conn., and according to his lawsuit was at one point ranked in the
top 10% to 20% of employees. His pay for 2004 was $205,000.
Mr. Thomas said he was retaliated against earlier this year after questioning
GE's pay, bonus and perk system, and then changing it within the unit to give
more merit bonuses to minorities and women. He said he was told he would
receive no salary increase or stock options, despite having increased operating
profits dramatically. He said GE suggested he leave because he didn't have
the necessary leadership skills. This year, he said, his ranking dropped
to the bottom 7% to 10% of employees.
GE spokesman Rick Kennedy acknowledged there were discussions with Mr. Thomas
over his leadership style, and said that Mr. Thomas hasn't been suspended as the
unit's CEO. The company points to Mr. Thomas's three years at GE to
illustrate its point that it doesn't discriminate. "He has moved through
progressively larger roles," the statement said.
Mr. Thomas states in the lawsuit that he received an award less than a year ago
calling his leadership "exemplary." He also pointed to other leadership
roles he held before getting into business, including teaching at the U.S.
Military Academy at West Point and leading a U.S. Army Special Forces battalion
during the first Gulf War.
Write to Kathryn Kranhold at
kathryn.kranhold@wsj.com
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