The 10 Biggest Coca-Cola Lawsuits in Company History
The Coca-Cola Company specializes in the development, production, and distribution of non-alcoholic beverages. It supplies the world with beverages in over two hundred territories and countries. The company is one of the most well-known in the world. It provides an assortment of beverages, supplying consumers and businesses. It is one of the largest suppliers in the world. It is a publicly-traded company listed on the New York Stock Exchange under the ticker symbol KO, but the beverage giant has had its share of legal troubles. The Coca-Cola company has settled dozens of lawsuits in its long and storied history. Here are the ten biggest lawsuits in company history.
10. Coca-Cola accused of discriminating against disabled workers Settlement amount: $2.25 million
In 2018, plaintiffs filed a lawsuit against Coca-Cola Refreshments USA, Inc, a subsidiary of the Coca-Cola Company. The suit claimed that Coca-Cola Refreshments USA, Inc. discriminated against workers based on disability. Nine persons filed discrimination charges. They claimed that Coca-Cola refused to provide reasonable accommodations for employees with disabilities and got investigated by the United States Equal Employment Opportunity Commission. The investigations into the claims revealed issues within the policies and practices of the company. Coca-Cola agreed to work with the EEOC to improve its disability leave practices and provide workers harmed by its practices with compensation as a part of the settlement agreement. It worked with the EEOC to update its policies and procedures to ensure that employees who return to work after absences related to disabilities receive reasonable accommodations as required. The agreement was reached and approved on August 23, 2018. Officials at the EEOC commended the Coca-Cola Company for its willingness to cooperate and further advertise the terms of its agreement publicly to attempt to draw attention to the need to support workers with disabilities in the workplace.
9. Costanza vs BCI Coca-Cola Bottling Company of Los Angeles Settlement amount: $2.25 million
Just three years after BCI Coca-Cola Bottling Company of Los Angeles settled a $14 million lawsuit for violations of workers’ rights, it was in the hot seat for yet more accusations of employment-related offenses. In 2008, the subsidiary of the Coca-Cola Company was accused of wage and hour violation through misclassification of workers to avoid paying them compensation and benefits to which they were legally entitled. The private litigation was filed by the plaintiffs in the Superior court of the State of California in the county of Los Angeles. Some employees of the company were misclassified and sought compensation for financial harm they incurred by receiving less compensation than California labor laws entitled them to receive. The BCI Coca-Cola Bottling Company of Los Angeles settled the lawsuit, paying a penalty of $2.25 million to compensate the workers for the damages they received for the misclassifications of their job positions within the company. The settlement was completed on March 18, 2008, as one of the less expensive lawsuits the company resolved. This lawsuit was just one of many that involved worker complaints.
8. Coca-Cola settles claims in ERISA lawsuit Settlement amount: $3.5 million
Plan Sponsor reports that the Coca-Cola company was accused of violating the Employee Retirement Income Security Act in a lawsuit filed in the US District Court for the Western District of North Carolina. The plaintiffs claimed that the company breached fiduciary responsibilities through mismanagement of the plan’s investments on behalf of its workers. Coca-Cola used a fund that is considered high risk and was unsuitable for participants of the plan due to higher fees than other options. Investors lost faith in the fund and plaintiffs suffered financial damage as a result of Coca-Cola’s irresponsible investment actions. the recordkeeping and administrative costs of the plan selected were also excessive, costing plan participants financially. Several witnesses confirmed the allegations along with third-party investigators. Coca-Cola and the plaintiffs agreed to a settlement of $3.5 million to resolve the lawsuit.
7. The Coca-Cola Company sued for allegations of employment discrimination Settlement amount: $4.2 million
A lawsuit was filed against the Coca-Cola Company, alleging employment discrimination in the workplace in 2002. The United States Labor Department received complaints about the Atlanta, Georgia, operation. They claimed that women and minority employees were discriminated against in salary disparities. The Department of Labor’s Office of Federal Contract Compliance Programs investigated the claims and found pay disparities for 922 female employees who were salaried and 48 employees in a minority class working at hourly wages. Coca-Cola compensated the workers in the class-action lawsuit for the financial damages they received, resulting from the company’s violations of anti-discrimination laws. Coca-Cola further agreed to cooperate with the US Labor Department to address the issues in its compensation practice and create an environment and employment practices that comply with legal requirements for all employers. Policies for equal employment opportunities in hiring, promotion, and compensation were revamped. The new policies reflect compliance as a result of the settlement. The errors cost the company an estimated $4.2 million. The settlement agreement was reached on May 24, 2002. This was a federal case.
6. BCI Coca Cola Bottling Company of Los Angeles settles employment-related offenses lawsuit Penalty: $20 million
BCI Coca-Cola Bottling Company of Los Angeles is a subsidiary of the Coca-Cola Company. The company was accused of employment-related offenses involving wage and hour violations with misclassification of some of its employees to save the company money on wages and compensation. Private civil litigation was filed in the Superior court of the State of California, County of Los Angeles in the Evans vs BCI Coca-Cola Bottling Co. of Los Angeles. Coca-Cola had already established a shaky track record of unfair treatment of its employees through other class-action lawsuits claiming mistreatment of workers, unfair wages, and other allegations. Coca-Cola settled the lawsuit, agreeing to pay a penalty of $20 million to resolve the case on October 17, 2001. The company was required to render compensation to the employees who received financial harm as a result of the misclassifications. The company was also penalized for its unfair practices by misclassifying workers who were entitled to greater compensation and benefits than the company had paid them. This was an expensive lesson to learn about observing laws governing the fair treatment of employees, but it is one of the smaller lawsuits that the company settled. More employment-related lawsuits would follow with seven larger fines and penalties levied against the beverage producer.
5. Coca-Cola was accused of committing employment-related offenses in 2005 Settlement amount: $14 million
The BCI Coca-Cola Bottling Company of Los Angeles is a subsidiary of the Coca-Cola Company. A lawsuit was filed against the company in the Al Saucedo et al vs The Coca-Cola Co et al case. the plaintiffs alleged that Coca-Cola engaged in employment-related offenses of wage and hour violations and committing overtime violations against workers. It is illegal for employers to require workers to work overtime hours without compensating them at overtime rates of time and half of their regular pay. The lawsuit was filed in the Superior Court of the State of California, County of San Bernardino. BCI Coca-Cola Bottling Company of Los Angeles settled a lawsuit for employment-related offenses in 2001, paying compensation and penalties of $20 million. The second settlement that was reached in January of 2005 was less than four years after the previous violations of workers’ rights. The subsidiary didn’t seem to learn from its first encounter with multimillion-dollar lawsuits as it continued to suffer legal problems from allegations of worker’s rights violations in the second lawsuit. The company is on the radar with a poor track record of fair employment practices.
4. Coca-Cola settles Fairlife animal abuse lawsuit Settlement amount $21 million
Food Dive reports that the Coca-Cola Company and other companies were accused of animal abuse. A lawsuit was filed in federal court in Illinois, alleging Fair Oaks Farms, Coca-Cola, and Select Milk Producers treated cows inhumanely. Coca-Cola promoted beverages and marketed them claiming that the products were produced by humanely treated cows. When videos of animal abuse proved that the supplier treated the animals inhumanely, Coca-Cola was brought up on charges of deceptive marketing and consumer fraud in the 2019 incident. Coca-Cola agreed to pay the fine to resolve the allegations. Other defendants in the case agreed to take measures to ensure that animals would no longer receive inhumane treatment. Coca-Cola either had likely not fully investigated the claims it made about the treatment of the animals before it engaged in a marketing campaign that made false statements. It learned a valuable lesson about verifying claims in advertising.
3. African-American Employees $82.8 million
Justia US Law confirms that a class-action lawsuit was filed against the Coca-Cola company alleging discrimination against African American employees. The suit was filed in April of 1999 in the United States District Court for the Northern District of Georgia. Plaintiffs alleged that the Coca-Cola Company practices race discrimination in its performance evaluations, compensation, and promotions of workers, and it maintained practices and employment policies that caused harm to African American workers. Investigations of the allegations were ongoing with Coca-Cola denying any wrongdoing in the matter as documents along with the company’s Affirmative Action Plans were reviewed by investigators. Several senior and human resources managers left the company during the situation. The parties met with a mediator before the trial got underway, agreeing to a settlement of $82.8 million to resolve the complaints with preliminary settlement agreements completed in December of 2000.
2. Coca-Cola sued for artificially inflating sales reports to investors Settlement amount: $137.5 million
Reuters reports that Investors filed a lawsuit against Coca Cola alleging that the company misrepresented its sales to boost the sales of its stock prices. The lawsuit was filed by Carpenters Health and Welface Fund of Philadelphia & Vicinity on behalf of institutional investors claiming that Coca-Cola engaged in channel stuffing, a practice that artificially inflates results to create a false picture of the financial health of the company, resulting in omissions and misrepresentations to investors that caused them financial harm. Coca-Cola additionally forced some bottlers to buy beverage concentrate that was unnecessary to add hundreds of millions of dollars to the bottom line of the coke company in 1999 to make sales of its beverages appear higher than they were. Investors who acquired common stock in Coca-Cola between October 21, 1999, and March 6, 2000, were eligible for membership in the class-action lawsuit. Coca-cola denied any wrongdoing but agreed to the $137.5 settlement million to avoid further legal expenses. The actions, if confirmed would have resulted in securities violations Coca-Cola agreed to refrain from further activities considered securities fraud. The US Department of Justice was actively involved in the case, but in light of Coca-Cola’s agreement to pay the fines to resolve the case, they closed the investigation and did not file charges.
1. Coca-Cola sued in bias case Settlement amount: $156 million
The Tampa Bay Times reports that Coca-Cola employees filed a lawsuit against the company, alleging that the management engaged in practices of racial discrimination against African American workers. The lawsuit claims that black workers were placed at the bottom tier of employment hierarchies. The settlement provides for 2,000 current and past workers in a class-action settlement that compensated the workers who were unfairly treated with about $40,000 in cash with four of the workers receiving $300,000. The federal lawsuit also carried other penalties amounting to $156 million including agreeing to make changes in the way that the company conducts employment processes and a third-party monitoring system by a panel of outsiders to ensure the company did not continue to engage in acts of racial bias in its employment practices.
Final thoughts
The Coca-Cola Company has had multiple issues with its various subsidiaries and the main company. Several lawsuits alleging worker mistreatment, unfair labor practices, and discrimination were settled to avoid further litigation and expenses. The leading beverage producer supplies the world with some of the most beloved products on the market today. Most large organizations encounter such problems with no reflection on the quality of their products. It continues to work out the problems with managers and leaders as Coca-Cola continues to make changes to become a stronger company with improvements made as a result of its legal issues.
