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Packaging Corporation of America settles racial harassment lawsuit

SACRAMENTO, Calif. (News release) - Paper manufacturers Packaging Corporation of America Central California Corrugated, LLC. (PCA) and Schwarz Partners LP will pay $385,000 and implement preventative measures to settle a racial harassment lawsuit seeking relief for two African American men who worked at a manufacturing plant located in McClellan, California, the U.S. Equal Employment Opportunity Commission (EEOC) announced today.

According to EEOC's suit, co-workers and a shift supervisor commonly used racial slurs and derision, even broadcasting these phrases over the facility's radio system. The Black workers also faced graffiti of swastikas and were taunted with a makeshift noose. The employers failed to act on the harassment, according to the EEOC. For instance, after one employee submitted a photo of the drawing his shift lead had scribbled onto his workstation, comprised of a confed­erate flag inscribed with the phrase "Long Live the Confederacy," human resources closed the investigation due to insufficient evidence, without interviewing the alleged harasser.

Racial harassment violates Title VII of the Civil Rights Act of 1964, which requires employers to take prompt action to investigate and stop the misconduct after they learn of it. EEOC filed its lawsuit (EEOC v. Packaging Corporation of America Central California Corrugated, LLC, et al., Case No. 2:20-cv-01948-MCE-CKD) in U.S. District Court for the Eastern District of California, after first attempting to reach a pre-litigation settlement through the agency's administrative conciliation process.

The three-year consent decree settling the lawsuit provides for $385,000 in lost wages and emotional distress damages to the two former employees. The defendants will revamp company policies and train employees on preventing and reporting racial harassment. The companies will also implement policies and procedures to facilitate the prompt and thorough investigations of any future complaints of discrimination or harassment.

"This case should be a strong reminder that all employers have a duty to act quickly to stop harassment and hate speech in the workplace," said EEOC San Francisco District Director Nancy Sienko. "As our nation continues to wrangle with lingering racial discrimination, we appreciate that these employers agreed to promptly settle this matter and to provide significant relief."

EEOC Senior Trial Attorney James H. Baker added, "We are glad that these employees had the courage to come forward to the EEOC. No workers, or employers for that matter, should tolerate hate speech and symbols infesting their workplaces."

Originally named Northern Sheets, the manufacturing plant was owned and managed by Schwarz, a privately held company based in Indianapolis with over 2,500 employees, then later sold to a subsidiary of PCA (NYSE: PKG), a Fortune 500 company based in Illinois employing over 14,000 individuals at plants and offices around the country. One of the largest container­board manufacturers in the United States, PCA reported over $7.7 billion in net sales in 2021.

In the 2021 fiscal year, the EEOC recovered over $38,800,000 stemming from allegations of race-based harassment.

For more information on race and color discrimination, please visit https://www.eeoc.gov/racecolor-discrimination. For more information on harassment, please visit https://www.eeoc.gov/harassment

The EEOC advances opportunity in the workplace by enforcing federal laws prohibiting employment discrimination. More information is available at www.eeoc.gov. Stay connected with the latest EEOC news by subscribing to our email updates.

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