Blair C. Fensterstock (BF 2020)
Ingrid A. Dreimann (ID 2053)
Jorn A. Holl (JH 1119)
Brock, Fensterstock, Silverstein,
McAuliffe & Wade, LLC
Citicorp Center, 56th Floor
153 E. 53rd Street
New York, New York 10022
(212) 371-2000
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
J. DAVID KEOUGH,
Plaintiff,
-against-
TEXACO INC., TEXACO INTERNATIONAL
LIMITED, PETER I. BIJUR,
LINDA GOSDEN ROBINSON and ROBINSON
LERER MONTGOMERY,
Defendants.
97 Civ.( )
COMPLAINT
Plaintiff, J. David Keough ("Mr. Keough"), by his attorneys, Brock,
Fensterstock, Silverstein, McAuliffe & Wade, LLC, as and for his complaint
against defendants, alleges upon information and belief, except as to those
allegations which pertain to himself, as follows:
INTRODUCTION
This complaint arises out of false statements and other illegal actions
taken by the defendants. These abhorrent, despicable, and wrongful actions
were taken by defendants when they launched a campaign against Plaintiff
("Mr. Keough"), in which defendants made Mr. Keough a scapegoat after Texaco
suffered a public relations nightmare in November 1996. The disclosure
of now infamous tape recordings of conversations by Texaco management allegedly
making discriminatory statements, among other things, resulted in a public
outcry against Texaco's inexcusable actions. In response, rather than admit
its own wrongdoing, and at the urging and advice of defendants Linda Robinson
("Robinson") and the public relations firm Robinson Lerer Montgomery ("RLM"),
Texaco struck out at one of its key employees. In an attempt to extricate
itself, Texaco libeled Mr. Keough, falsely stating and implying (a) that
he was a party to the taped conversations in which alleged derogatory statements
were made about African-Americans, and (b) that he advocated destroying
documents relating to an ongoing lawsuit. Then, at the advice and direction
of defendants Robinson and RLM, the company announced that it was terminating
Mr. Keough for cause as a result of his alleged derogatory statements and
actions with regard to the production of documents. Texaco's inexcusable
and abusive conduct has caused Mr. Keough extreme emotional stress and
financial hardship, has ruined his business and personal reputation, and
has caused him to relocate from Bermuda, unemployed, unemployable, homeless,
and shamed.
JURISDICTION AND VENUE
This Court's jurisdiction is based upon 28 U.S.C. ' 1332(a) and 28 U.S.C.
' 1332.
Venue is proper in this District pursuant to 28 U.S.C. ' 1391 (b) and
(c). The acts and conduct complained of occurred in substantial part in
this District. The principal places of business of defendants Texaco and
RLM have been in this District at all relevant times.
This matter exceeds the value of $75,000, exclusive of interest and
costs.
PARTIES
Mr. Keough is currently a resident of Connecticut. At various times
material to this complaint, Mr. Keough was a resident of Bermuda. Until
January 8, 1997, Mr. Keough had worked for Texaco for approximately 21
years in various capacities, including as Senior Assistant Treasurer of
Texaco Inc., Assistant Treasurer of Texaco Darejat Limited, Texaco International
Limited, Texaco Saudi Investments Limited, Texaco Trading Company Limited,
Texaco Products Inc. and Texaco Portugal Prospeccao e Producao, S.A.R.
L., and Senior Vice President, Chief Financial and Administrative Officer
and a Director of Heddington Insurance, Limited, ("Heddington"), Texaco's
Bermuda off-shore captive insurance firm.
Mr. Keough is not a public official or a public figure.
Defendant Texaco Inc. is a Delaware corporation with its principal place
of business at 2000 Westchester Avenue, White Plains, New York.
Defendant Texaco International Limited ("Texaco International") is a
wholly owned subsidiary of Texaco Inc. with principal offices in New York
and Texas, and is the entity that employs Texaco employees who are working
overseas. (Texaco International and Texaco Inc., will be referred to collectively
as "Texaco").
Defendant Peter I. Bijur is Chairman of the Board and Chief Executive
Officer of Texaco, a Director of Texaco, and an officer and director of
various Texaco subsidiaries.
Defendant Linda Robinson is a public relations consultant hired by Texaco.
Defendant RLM is a public relations firm, of which Robinson is a partner.
Texaco retained RLM to assist it during the 1996 public relations nightmare
discussed above.
BACKGROUND
Mr. Keough first became employed by Texaco in 1976. From 1976 until
he was wrongfully terminated by Texaco in 1997, Mr. Keough received uniformly
good reviews, and the full amount of all periodic bonuses and raises which
were available. Mr. Keough's duties at Texaco included the successful development
of programs and policies aimed at increasing the hiring and promotion of
minorities and women at Texaco. Mr. Keough personally felt that such policies
and programs were important and frequently discussed such issues with Texaco
personnel, including Edward N. Gadsden, Jr., the Equal Employment Opportunity
Director; John D. Ambler, Human Resources Vice President; James F. Link,
Treasurer; Robert Ulrich, a former Treasurer; and David C. Crikelair, a
former Treasurer.
In 1994, a class action was filed in this District alleging a pattern
of racial discrimination at Texaco. The case was entitled Roberts et. al.
v. Texaco, Inc., 94 Civ. 2015 (CLB). As part of the Roberts case, Texaco
was required to produce documents in response to written requests for documents
and to oral requests that had been made during at least one deposition.
Meetings were held at Texaco at which the production of documents was
discussed. In 1994, Texaco's in-house legal staff was charged with complying
with the document requests. These in-house lawyers were responsible for
(a) insuring that other Texaco employees understood and complied with the
document requests, and (b) supervising the Texaco employees in gathering
responsive information. Texaco and its in-house lawyers owed a duty to
Keough to insure that Texaco employees were adequately supervised concerning
this document production.
In 1994, Texaco hired the law firm of Kaye, Scholer, Fierman, Hays &
Handler, LLP ("Kaye Scholer") as outside counsel to assist Texaco in defending
the Roberts case. Texaco, its in-house legal staff, and Kaye Scholer, knew
or should have known that if they did not adequately supervise the company's
employees in responding to the document requests, it was foreseeable that
those employees -- who were not trained to respond to or understand such
legal documents -- would likely not be able to comply with all of the legal
requirements inherent in a document production, and would cause harm to
Mr. Keough.
During 1994, Richard Lundwall, a Texaco employee, violated federal law
by unlawfully taping many conversations between Texaco employees over a
period of six months. Mr. Lundwall did so with the intent to do harm to
Texaco and certain of its employees, including Mr. Keough, because he was
angry at the possibility of losing his job amidst a corporate downsizing
and expense reduction program throughout Texaco.
The recording of the secret tapes was never part of Mr. Lundwall's job
duties, was in breach of Texaco's policies, and was a violation of 28 U.S.C.
'' 2510 and 2511. Some of the recorded conversations included discussions
between various Texaco employees regarding the review and production of
documents in the Roberts case. Mr. Keough was present during at least one
of these conversations. Mr. Keough did not participate in any conversations
regarding any inappropriate or illegal actions regarding the production
of documents. However, as set forth below, due to the illegal actions of
the defendants, the general public now mistakenly believes that he did.
As is now well known, Mr. Lundwall also taped conversations in which
certain members of Texaco's management made allegedly racially offensive
comments concerning Texaco's African-American employees. Mr. Keough was
never present during any such conversations. However, as set forth below,
due to the illegal actions of the defendants, the general public now mistakenly
believes that he was.
Mr. Lundwall's employment with Texaco was terminated in the latter half
of 1996. After his termination, Mr. Lundwall approached plaintiffs' counsel
in the Roberts case with tape recordings of conversations he had made.
Plaintiffs' counsel then submitted portions of the transcripts of the tapes
in a publicly filed document. Those transcripts became available to the
press, which covered the ensuing scandal extensively for several weeks.
Mr. Keough was present during only one taped conversation which became
part of the court record in Roberts. During that conversation, no employee
made any comment concerning racial minorities, and the discussion concerned
only the production of documents in the Roberts case. Mr. Keough did not
make any statements indicating that he did not intend fully to comply with
the requirements of the document production or that advocated the destruction
of documents. To the contrary, he did his best to fully comply with all
document production requests, including handing over his entire file to
Texaco's in-house lawyers. Because of the inappropriate actions of others,
including Lundwall, the Texaco legal department, and Kaye Scholer, Mr.
Keough never even knew what was ultimately turned over to counsel for Roberts.
Although the tape transcript consists of fragments of conversations
which are difficult to understand, under no reasonable interpretation of
the transcript could anyone understand that Mr. Keough destroyed or advocated
the destruction of any documents. Mr. Keough never destroyed any documents
which he believed were responsive to any document request in Roberts. Mr.
Keough never instructed anyone else to destroy any documents which he believed
were responsive to the document requests in Roberts. Rather, Mr. Keough,
never having even been given a copy of the second document request, discussed
his documents with and gave them to, the Texaco legal department.
On November 4, 1996, The New York Times published a story (the "New
York Times story"), on page 1, entitled "Texaco Executives, On Tape, Discussed
Impeding a Bias Suit." In the November 4 story, Mr. Keough was mentioned
by name. The story begins by stating that "Senior executives with Texaco
Inc. bantered comfortably among themselves in August 1994, planning the
destruction of documents demanded in a Federal discrimination lawsuit and
belittling the company's minority employees with racial epithets." The
story states: "[t]he tapes, in which the executives are heard referring
to black employees as "black jelly beans" and "niggers," raises the stakes
in the discrimination suit brought against Texaco by six company employees
on behalf of as many as 1,500 other minority employees."
The New York Times story, which was subsequently referred to by Texaco
Chairman and CEO Peter Bijur in public statements and in an interview with
Ted Koppel on Nightline on November 6, 1996, wrongly implies that Mr. Keough
was present at the taped meetings in which derogatory racial comments were
made, and also wrongly implies that Mr. Keough advocated the destruction
of documents.
On November 4, 1996, Defendant Bijur made a videotaped presentation
regarding the taping incident which was shown throughout Texaco to Texaco
employees. Upon information and belief, this videotaped presentation further
cast Mr. Keough in a derogatory light, falsely indicating to the employees
to whom it was shown that Mr. Keough was involved in the destruction of
documents and in conversations in which African-Americans were discussed
in a derogatory manner.
On November 5, 1996, the New York Times quoted a Texaco employee who
described defendant Bijur as having been "absolutely livid" about the tapes.
The disclosure that senior Texaco officials had used racially offensive
terms, and that in fact tape recordings of those conversations existed,
created a public relations fiasco for Texaco, in addition to utterly undermining
any defense it might have had in the Roberts case. Texaco immediately hired
defendant Robinson, a public relations expert, and RLM, the public relations
firm of which Robinson is a partner, to advise it on how to respond to
the public outrage and its declining stock price.
Upon information and belief, Robinson and RLM, in conjunction with others,
advised Texaco and Bijur to suspend and then terminate Mr. Keough, and
to issue public statements that Mr. Keough was being terminated because
he was involved in the scandal.
On October 31, 1996, Texaco retained Michael Armstrong to be the Independent
Counsel for the investigation of certain allegations arising in the course
of Roberts v. Texaco. On information and belief, Robinson consulted with
Mr. Armstrong during his "independent" investigation. On November 6, 1996,
Texaco suspended Mr. Keough.
On January 8, 1997, Mr. Armstrong issued his final report (the "Armstrong
Report"). On that same day, Texaco placed Mr. Keough on a non-paid leave
of absence until January 31, 1997, and effective January 31, Texaco terminated
him for cause.
Robinson, RLM, Texaco and Bijur conspired to defame Mr. Keough by falsely
and recklessly stating that he was responsible for the racially defamatory
statements and inappropriate responses to the document requests. In so
doing, defendants decided to make Mr. Keough a scapegoat. Rather than examine
and improve Texaco's deficient personnel policies, Texaco decided to avoid
taking responsibility as a company for its corporate deficiencies and the
failures of its legal counsel, in violation of public policy.
Texaco's reaction to the crisis was not an anomaly for the company.
Indeed, Texaco had long resisted changes proposed by its own shareholders
to address Texaco's shabby record on issues concerning minorities and women.
On at least three occasions, Texaco shareholders submitted proposals to
rectify Texaco's history of discrimination. In each case, the Board recommended
that Texaco shareholders vote against the proposal. In fact, at the Company's
last annual meeting on March 27, 1997, Texaco shareholders submitted a
proposal on the proxy "commit[ing] the company to a more diverse board.
. ." The Board of Directors recommended a vote against that proposal. At
its annual meeting, in April 1994, stockholders submitted a proposal to
"initiate a review of Texaco's policies and practices related to equal
employment opportunities and affirmative action and recommend constructive
changes." The Board of Directors recommended a vote against that proposal,
as well.
By letter dated January 8, 1997 from Allen J. Krowe, Vice Chairman of
the Board of Texaco to Mr. Keough (the "Termination Letter"), Texaco terminated
Mr. Keough, writing that "it is clear that you failed to follow Company
policy in numerous ways including participating with two other Finance
Department employees in withholding documents from the document production
process and failing to report to appropriate Company officials conduct
and statements by you and these other Finance Department employees that
violated Company policy."
Since Lundwall and another individual on the tapes had already retired,
and Mr. Keough was still employed by Texaco, Mr. Keough became a convenient
scapegoat.
Texaco then proudly announced the actions it took against Mr. Keough,
knowing that Mr. Keough had not made any racially defamatory statements
and knowing that Mr. Keough had an outstanding record with respect to promoting
and enhancing the professional opportunities for minorities and women at
Texaco.
TEXACO'S DEFAMATORY STATEMENTS CONCERNING THE PLAINTIFF
On January 8, 1997, the day of the Armstrong Report and the Termination
Letter, Bijur sent a letter to Texaco employees (the "January 1997 Bijur
Letter"). This letter was widely quoted in the press. The January 1997
Bijur Letter states:
"I write to you today to provide you with information concerning the
outcome of the independent investigation with respect to the four current
or retired employees in the Finance Department involved in the tape incident.
The independent investigation conducted by Mr. Michael Armstrong, an outside
attorney, has been thorough and detailed. We said in early November, Texaco
would follow the facts in this case wherever they may lead and would take
whatever action is necessary.
In this regard, we have today terminated the employment of David Keough
. . . These actions are being taken because it has been determined by the
company that these employees' conduct in this matter clearly violated the
company policy and our code of Conduct guidelines." (Emphasis added).
The January 1997 Bijur Letter falsely states and implies, in the context
of other events at that time, that Mr. Keough made racially derogatory
statements and advocated the destruction of documents in the Roberts case
in an effort to harm the plaintiffs.
Those statements and implications are false, and Bijur and Texaco knew
them to be false when Bijur made them. In fact, the Armstrong Report makes
clear that Mr. Keough was not present during any taped conversation where
derogatory racial statements were made, did not destroy any documents,
and believed that all documents in his possession would be helpful to Texaco.
The statements in the January 1997 Bijur Letter, on their face, harmed
Mr. Keough and his business reputation.
The fact that the public understood the statements in the January 1997
Bijur Letter to state and imply that Mr. Keough made racist comments and
advocated the destruction of documents to harm the plaintiffs in Roberts
is clearly demonstrated by reviewing the manner in which the press subsequently
reported on the January 1997 Bijur Letter.
For example, on January 8, 1997, the Associated Press reported: "Texaco
fired one executive, kept another on suspension and dropped benefits for
two retirees for their secretly recorded comments degrading minorities
and suggesting lawsuit documents be destroyed . . . Fired was David Keough,
who was an assistant treasurer at the time the tapes were made in 1994
. . . Texaco would not give specifics on why any of the four were being
disciplined, saying only that all were 'involved in the tape incident.'"
On January 9, 1997, U.S.A. Today reported:
"Texaco fired a top executive, suspended another and cut retirement
benefits of two former employees for allegedly making racist comments.
David Keough, chief financial and administrative officer of Heddington
Insurance, a Bermuda-based subsidiary, was fired immediately."
On January 9, 1997, the Associated Press reported:
"Texaco Inc. fired one high-ranking executive and penalized three others
who were secretly recorded making remarks degrading minorities or suggesting
that lawsuit documents be destroyed. 'These actions are being taken because
it has been determined by the company that these employees' conduct in
this matter clearly violated company policy and our Code of Conduct guidelines,'
Chairman Peter Bijur said in a letter to employees . . . . Fired was David
Keough."
On January 14, 1997, in a syndicated column, Carl Rowan wrote:
"Mr. Bijur has just dismissed one senior executive, suspended another
and cut off retirement benefits for two former employees -- all deemed
guilty of racist behavior that was in violation of company policy."
The Bijur statements all followed a well designed scheme by Texaco to
use Mr. Keough as a scapegoat. Back on November 6, 1996, days after the
tapes became public knowledge, Bijur made the following statement at a
press conference ("Bijur's November 1996 Statement"):
"You are all very well aware of alleged misconduct first reported by
the New York Times on Monday, which referred to statements made by several
current and former employees at Texaco in 1994. As soon as we heard about
these allegations, we immediately hired Michael Armstrong as outside counsel
to conduct an independent investigation to determine whether the allegations
were true. At the same time I spoke and wrote to all of Texaco's employees,
denouncing the alleged behavior in the strongest possible terms. Until
this morning, we did not have audible version of the tapes. I have just
today listened to them myself. I can tell you that the statements on the
tapes arouse a deep sense of shock and anger among all of the members of
the Texaco family and decent people everywhere.
They are statements that represent attitudes we hoped and wished had
long ago disappeared entirely from the landscape of our country and certainly
from our company. . . . Our review of the tapes has made it clear to us
that these values and policies have been violated. With regard to the four
individuals involved in the allegations before us, two are active employees.
They are both being suspended today pending completion of the investigation,
which will be accomplished promptly." (Emphasis added).
Bijur's November 1996 Statement falsely states and implies that Mr.
Keough made racially derogatory statements and advocated the destruction
of documents in the Roberts case in an effort to harm the plaintiffs.
Those statements and implications are false, and Bijur knew them to
be false when he made them. Bijur made the Bijur November 1996 Statement
after he listened to the tapes and knew that Mr. Keough was not present
during any taped conversation where alleged derogatory racial statements
were made, and did not advocate the destruction of any documents.
Bijur's November 1996 Statement, on its face, harmed Mr. Keough and
his business reputation.
The fact that the public understood the statements in Bijur's November
1996 Statement to state and imply that Mr. Keough made racist comments
and advocated the destruction of documents to harm the plaintiffs in Roberts
is clearly demonstrated by reviewing the manner in which the press subsequently
reported on Bijur's November 1996 Statement.
For example, on November 6, 1996, the Associated Press reported: "The
chairman of Texaco publicly apologized for racist statements made by several
top executives and said he had suspended two of them who still work for
the company."
On November 7, 1996, the New York Times reported:
"The company yesterday suspended two executives and cut off some benefits
to two retirees after hearing tapes of the men planning to destroy documents
demanded in a discrimination lawsuit and belittling minority employees
with racial epithets . . . With the actions taken yesterday, the company
has suspended, with pay, J. David Keough . . ."
On November 7, 1996, U.S.A. Today reported:
"Texaco Chairman Peter Bijur said Wednesday that he has suspended with
pay two executives who were secretly recorded allegedly using racial slurs
to refer to minority workers."
On November 25, 1996, Jet magazine reported:
"The chairman of Texaco Inc. recently apologized publicly for top executives
who allegedly referred to Black employees as 'niggers' and 'black jelly
beans' during company meetings and said he suspended two of them who still
work for the company. . . . Bijur suspended the two executives who had
attended the meetings and are still employed at the company -- Peter Meade,
assistant general manager of Texaco's fuel and marine marketing division,
and J. David Keough, chief financial officer of a Texaco subsidiary, Heddington
Insurance."
The defamatory statements made by Texaco and its officials, which were
repeated over and over again in the press, caused Mr. Keough substantial
harm. The untrue, libelous statements falsely implied that Mr. Keough was
an unethical racist who made derogatory racial comments and destroyed documents
relating to a racial discrimination law suit. Those defamatory statements
caused Mr. Keough to suffer hatred and contempt, not only in the United
States, but also in his then residence of Bermuda.
In addition, the defamatory statements made by Texaco and its officials
transformed Mr. Keough from a high level, well-paid corporate executive
to an unemployed, and in fact unemployable, individual who was forced to
leave the country of his residence.
On numerous occasions, including on November 9, 1996, Mr. Keough asked
Texaco to issue a public statement clarifying that he was never present
during any taped conversations where derogatory racial comments were made.
Texaco refused to do so. On May 12, 1997, counsel for Mr. Keough wrote
to counsel for Texaco and reiterated the fact that Mr. Keough had asked
Texaco to make a public statement making it clear that Keough was never
a part of any taped conversation where racist comments were made. Texaco,
through its counsel, refused to make such a statement.
THE ARMSTRONG INVESTIGATION
Upon information and belief, when Texaco hired Mr. Armstrong to conduct
what Texaco referred to as an "extensive independent investigation," Texaco
specifically told Mr. Armstrong not to investigate Texaco, Texaco's legal
department, or Kaye Scholer. On information and belief, these entities
were designated as beyond the investigation's "mandate."
>From the very beginning, Texaco planned to use Mr. Keough as a convenient
scapegoat for its discriminatory acts and the public relations fiasco.
By circumscribing the powers of Mr. Armstrong, and setting up a face-saving
"independent" investigation, Texaco intended to absolve itself of any responsibility
in this matter before the investigation even began.
Although Texaco in-house lawyers, including Stephen M. Turner, Senior
Vice President and General Counsel; Richard F. Pfizenmayer, Assistant General
Counsel; Obediah R. Miller, Senior Attorney; Lawrence R. Jerz, Assistant
General Counsel; and Eric Silberstein, and the Kaye Scholer lawyers, were
ultimately responsible for complying with the document requests in the
Roberts case, these entities were not investigated by Mr. Armstrong. This,
even though, on information and belief, Kaye Scholer and Texaco's in-house
legal department did not adequately supervise, and in some instances did
not supervise at all, the document production. The lawyers at Kaye Scholer
and Texaco neither reviewed with Mr. Keough nor gave him a copy of at least
one of the document requests to which he was asked to assist in responding.
Despite this fact, Mr. Keough gave the Texaco Legal Team all of his records,
some of which ultimately were not produced by Texaco.
Texaco determined that it would shield itself from liability for the
neglect and improper actions taken by its own lawyers' failure to supervise
and conduct the document production. In its effort to deflect blame from
itself, Texaco made Mr. Keough a scapegoat, terminating him for the improper
actions of its own, and outside, legal team, who were or should have been,
trained to conduct just such a document production. Despite the Armstrong
Report finding that Mr. Keough was not involved in any racially derogatory
discussions, Texaco continued to refuse to correct the record and absolve
Mr. Keough. Despite the Armstrong Report finding that Mr. Keough never
destroyed or intentionally failed to produce any material documents, Texaco
terminated Mr. Keough and deprived him of substantial benefits.
Mr. Armstrong followed Texaco's mandate to focus solely on Mr. Keough
and the other three individuals whose conversations were taped. Mr. Keough
fully cooperated in the Armstrong Investigation and participated in many
hours of interviews, during which he freely and fully answered all questions
put to him.
On November 15, 1996, Texaco agreed to settle the Roberts case for $176
million. As part of the settlement, Texaco also agreed to create an "Equality
and Tolerance Task Force to implement and monitor improvements to Texaco's
human resources programs; to adopt company-wide diversity, sensitivity,
mentoring and ombuds programs; consider nationwide job postings of senior
positions; and monitor its performance of these initiatives."
ACTIONS TAKEN AGAINST MR. KEOUGH
On information and belief, the Armstrong Report was released to Texaco
and others in November 1996, edited and redacted and released to Texaco
and others in final form on January 8, 1997. Mr. Keough was denied access
to the report, until the Report was distributed to the press in July 1997.
On January 8, 1997, Texaco hand-delivered a Termination Letter to Mr. Keough
in Bermuda, notifying him that his employment was being terminated.
At the time the Armstrong Report was issued, two of the individuals
who were heard on the tapes, Mr. Lundwall and Mr. Ulrich, were no longer
employed by Texaco. A third, Mr. Meade, who actually participated in the
meetings in which derogatory statements were made, was suspended without
pay for two weeks and was required to attend a sensitivity training session.
According to the Termination Letter, Texaco terminated Mr. Keough's
employment "for cause," based on alleged breaches of company policy "in
numerous ways including participating with two other Finance Department
employees in withholding documents from the document production process
and failing to report to appropriate Company officials conduct and statements
by you and these other Finance Department employees that violated Company
policy."
The justification given for terminating Mr. Keough was nothing more
than a disingenuous attempt on the part of Texaco to shift blame to Mr.
Keough for the company's own history of racial discrimination. At the time
Texaco terminated Mr. Keough, Texaco knew that Mr. Keough was a proponent
of minority hiring and that Mr. Keough was not involved in any of the alleged
racist taped conversations. The Armstrong Report specifically found that
"Keough was not a participant in any recorded conversations that allegedly
included racial slurs", at p.3, fn.4. Texaco could not legally terminate
Mr. Keough under these circumstances because such a termination violates
a public policy of promoting diversity in the work place and discriminates
against Mr. Keough.
Mr. Keough did not breach any company policy and did not engage in any
wrongdoing. The Termination Letter was a further element in Defendants'
conspiracy to defame Plaintiff and an attempt to deflect Texaco's own liability,
through the use of Mr. Keough as a convenient scapegoat.
In the Termination Letter, Texaco informed Mr. Keough that it was discontinuing
numerous benefits to which he was entitled. Such benefits included his
life and health insurance, and certain restricted stock awards that had
accrued to Mr. Keough during the course of his twenty-one years of employment
with Texaco. Texaco also immediately terminated, as of January 8, 1997,
Mr. Keough's housing allowance and other benefits which it had previously
paid to assist him as an expatriate international employee with the exorbitant
costs of living and working in Bermuda.
At the time Mr. Keough was summarily terminated by Texaco, he was living
and working for Texaco in Bermuda. In September 1995, Mr. Keough had relocated
from the United States to Bermuda after relying on specific statements
and representations made to him by various Texaco executives, including
William C. Bousquette, Senior Vice President and Chief Financial Officer,
and James F. Link, Treasurer. Among those statements were representations
that Mr. Keough should move all of his household possessions to Bermuda
because his stay there would be a long-standing one, lasting at least five
years, and that Mr. Keough was in line to be the next chief executive officer
of Heddington. Subsequently, Mr. Keough's wife died in December 1995, and
he remarried and moved his new wife to Bermuda in the fall of 1996. Upon
terminating Mr. Keough, Texaco informed him that he would be personally
responsible for bearing the expense of moving himself, his family and his
household belongings back to the United States. Under Bermuda law, any
employee of a foreign entity must leave within six months of termination
of his employment and the employer is required to repatriate the employee
and his or her family to their country of origin. After inducing Mr. Keough
to move himself and his family out of the United States, Texaco abruptly
left them abandoned and refused to assist him in his mandatory departure
from Bermuda. Moreover, Texaco damaged Mr. Keough's reputation in Bermuda
to an extent that it became impossible for him to obtain any other employment
there which would enable him to remain and to the extent that Mr. Keough
feared for his life.
In addition to placing Mr. Keough in a precarious position, with an
expensive lease that he could not pay, no home available, and no way to
return his household possessions to the United States, Texaco demanded
that Mr. Keough repay to Texaco the entire balance of a large, long-term
housing loan it had made to him. Such actions by Texaco have caused, are
continuing to cause, and were intended to cause, Mr. Keough and his family
to suffer enormous mental, emotional, and financial distress.
At his own expense, Mr. Keough arranged to move himself, his family
and their belongings to the United States. He returned to find himself
the unwilling center of attention, and to a general public that was under
the mistaken belief that Mr. Keough had engaged in bigoted conversations
and intentionally destroyed evidence. He was forced to sacrifice and sell,
at distressed prices, much of his valuable household effects to obtain
the funds for the move and for future living expenses. The public humiliation
and disgrace to his reputation have prevented Mr. Keough from obtaining
employment, have made him unemployable, and have caused great injury to
himself and his family.FIRST CAUSE OF ACTION (Libel per se against Texaco
and Bijur)
Plaintiff repeats and realleges each and every allegation set forth
in paragraphs 1 through 69 as if fully set forth herein.
Bijur, as CEO of Texaco issued at least two public statements, including
the January 1997 Bijur Letter and Bijur's November 1996 Statement, which
falsely stated and implied that Mr. Keough took part in conversations in
which derogatory racial comments were made and which falsely stated or
implied that Mr. Keough was actively involved in destroying documents in
an effort to harm the plaintiffs in Roberts.
The January 1997 Bijur Letter and Bijur's November 1996 Statement were
of and concerning Mr. Keough, and were interpreted by the press and general
public to be of and concerning Mr. Keough.
The January 1997 Bijur Letter and Bijur's November 1996 Statement were
published and broadcast by Texaco and Bijur to the public.
Texaco and Bijur knew that the January 1997 Bijur Letter and Bijur's
November 1996 Statement were false when made and Texaco and Bijur acted
negligently, maliciously and with reckless disregard for the truth in making
those statements.
The January 1997 Bijur Letter and Bijur's November 1996 Statement were
defamatory on their face and have harmed Mr. Keough's personal and business
reputations. Mr. Keough has become unemployable as a result of the January
1997 Bijur Letter and Bijur's November 1996 Statement, which have exposed
him to public hatred, contempt, ridicule, and disgrace.
As a proximate result of Texaco's defamatory statements, Mr. Keough
has suffered damages exceeding $12,000,000. Those damages include lost
wages of $2,000,000; lost incentive compensation of $3,000,000; lost medical,
insurance and vacation benefits worth $1,270,000; lost retirement benefits
of $930,000; lost stock options worth $270,000; lost post-retirement benefits
totaling $4,400,000; and personal property losses of $170,000.
SECOND CAUSE OF ACTION
(Libel Against Texaco and Bijur)
Plaintiff repeats and realleges each and every allegation set forth
in paragraphs 1 through 76 as if fully set forth herein.
Bijur, as CEO of Texaco, issued at least two public statements, including
the January 1997 Bijur Letter and Bijur's November 1996 Statement, which
falsely stated and implied that Mr. Keough took part in conversations in
which derogatory racial comments were made and which falsely stated or
implied that Mr. Keough was actively involved in destroying documents in
an effort to harm the plaintiffs in Roberts.
The January 1997 Bijur Letter and Bijur's November 1996 Statement were
of and concerning Mr. Keough, and were interpreted by the press and general
public to be of and concerning Mr. Keough.
The January 1997 Bijur Letter and Bijur's November 1996 Statement were
published and broadcast by Texaco and Bijur to the public.
Texaco and Bijur knew that the January 1997 Bijur Letter and Bijur's
November 1996 Statement were false when made and Texaco and Bijur acted
negligently, maliciously and with reckless disregard for the truth in making
those statements.
The January 1997 Bijur Letter and Bijur's November 1996 Statement are
defamatory and have harmed Mr. Keough's personal and business reputations.
Mr. Keough has become unemployable as a result of the January 1997 Bijur
Letter and Bijur's November 1996 Statement, which have exposed him to to
public hatred, contempt, ridicule, and disgrace.
As a proximate result of Texaco's defamatory statements, Mr. Keough
has suffered damages exceeding $12,000,000. Those damages include lost
wages of $2,000,000; lost incentive compensation of $3,000,000; lost medical,
insurance and vacation benefits worth $1,270,000; lost retirement benefits
of $930,000; lost stock options worth $270,000; lost post-retirement benefits
totalling $4,400,000; and personal property losses of $170,000.
THIRD CAUSE OF ACTION
(Intentional Infliction of Emotional Distress Against Texaco, Bijur,
Robinson and RLM)
Plaintiff repeats and realleges each and every allegation set forth
in paragraphs 1 through 83 as if fully set forth herein.
Defendants Texaco, Bijur, Robinson and RLM acted with malice and the
simple desire to find a convenient scapegoat for Texaco's own discriminatory
practices.
The acts of the defendants as alleged herein were done with the intent
to cause severe emotional distress to Mr. Keough. At no time did Texaco,
or any of the defendants, even when asked to do so, seek to clarify that
Mr. Keough was never part of any conversation using racial epithets. At
no time did Texaco, or any of the defendants, even when asked to do so,
seek to clarify that Mr. Keough did not engage in the destruction of documents.
Moreover, even after defendants were aware that Mr. Keough never used any
racial epithets, had never engaged in any discriminatory behavior, and
had never knowingly destroyed requested documents, none of the defendants
would agree to publicly issue an apology or rescission of their previous
wrongful remarks.
Mr. Keough's intent, at all times, was to comply with all legal requirements
regarding the production of documents. All of the defendants engaged in
extreme and outrageous conduct intended to cause Mr. Keough to suffer emotional
distress by causing him to be terminated from his employment, and by publicly
and falsely stating that he had acted improperly. Texaco acted tortiously
in summarily terminating Mr. Keough simply to clear its own name, abandoning
Mr. Keough and his family in a foreign territory, and making outrageous
monetary demands on Mr. Keough. Each of the defendants is liable to Mr.
Keough for damages related to this intentional infliction of emotional
distress.
Defendants' actions were outrageous, extreme, and intentional and caused
Mr. Keough to suffer extreme emotional distress in an amount in excess
of $40,000,000.
FOURTH CAUSE OF ACTION
(Wrongful Termination Against Texaco and Texaco International in Violation
of Public Policy)
Plaintiff repeats and realleges each and every allegation set forth
in paragraphs 1 through 88 as if fully set forth herein.
Mr. Keough was employed by Texaco and while employed by Texaco was an
advocate and proponent of diversity in hiring, training, and promoting.
Mr. Keough implemented diversity programs at Texaco and was intricately
involved in doing so with Edward N. Gadsden, Jr., the Equal Employment
Opportunity Director.
Despite Mr. Keough's strong position in favor of diversity employment
at Texaco, which he orally expressed on numerous occasions, Texaco decided
to use him as a scapegoat and wrongfully terminated him in Texaco's continuing
efforts to avoid having to admit to, and change, its own longstanding history
of racial discrimination.
Terminating an employee under such circumstances violates the substantial
public policy of promoting diversity and ending racial discrimination in
the workplace.
As a direct and proximate result of Texaco's actions, Mr. Keough has
incurred damages in excess of
$12,000,000.
FIFTH CAUSE OF ACTION
(Wrongful Dismissal Against Texaco Under Bermuda Law)
Plaintiff repeats and realleges each and every allegation set forth
in paragraphs 1 through 93 as if fully set forth herein.
Mr. Keough was an employee of Texaco under Bermuda law.
Texaco could not terminate Mr. Keough under Bermuda law without just
cause.
Texaco's termination of Mr. Keough was unauthorized under Bermuda law
and amounted to unlawful wrongful dismissal.
As a direct and proximate result of Texaco's action, Mr. Keough has
incurred damages in excess of $12,000,000.
SIXTH CAUSE OF ACTION
(Promissory Estoppel Against Texaco)
Plaintiff repeats and realleges each and every allegation set forth
in paragraphs 1 through 98 as if fully set forth herein.
When Texaco requested that Mr. Keough relocate to Bermuda, it made a
clear and unequivocal promise and thereby led him to reasonably believe
that he would not be terminated without cause. Texaco promised Mr. Keough
that he would be employed in Bermuda for at least five years. In addition,
Texaco's policies and practices towards Mr. Keough and other employees,
of which Mr. Keough was aware, enforced Mr. Keough's reasonable understanding
that he would not be terminated without cause.
In reliance upon Texaco's promise that he would not be terminated without
cause, Mr. Keough relocated his family to Bermuda. Contrary to Texaco's
descriptions of events, no action taken by Mr. Keough could be described
as "for cause" termination. Mr. Keough's reliance on Texaco's statements
and actions was both reasonable and foreseeable by Texaco.
Mr. Keough was injured as a direct and proximate result of his reliance
on Texaco's promise in an amount in excess of $12,000,000.
SEVENTH CAUSE OF ACTION
(Negligent Supervision against Texaco)
Plaintiff repeats and realleges each and every allegation set forth
in paragraphs 1 through 102 as if fully set forth herein.
Texaco, its in-house legal staff, and Kaye Scholer negligently supervised
Texaco's employees in the production of documents in the Roberts case.
Armstrong Report, at p.64.
As the Roberts litigation progressed, Pfizenmayer and Silberstein had
the most direct involvement in the case. The principal responsibility for
the actual gathering of documents and the delivery of those documents to
outside counsel was delegated to Silberstein. Armstrong Report, pp. 35-36.
For Kaye Scholer, Andrea S. Christensen and John J.P. Howley were the principal
lawyers responsible for the Roberts action, although numerous other Kaye
Scholer personnel, in various positions, participated in the defense of
Texaco. Armstrong Report, p. 36.
Pfizenmayer and Silberstein as in-house counsel, and Christensen and
Howley as outside counsel who had previously represented Texaco, were familiar
with Texaco's policies and procedures including the process for gathering
documents at Texaco for production in a lawsuit. The Texaco legal team
knew of the existence of the alleged non-produced Finance Books and, if
any of them had focused on plaintiffs' requests, they could have directed
the Finance Department to give them the documents, which they had already
seen, again. Armstrong Report, at pp. 66, 87. Mr. Keough gave his entire
file to Texaco when he was asked for his documents. Furthermore, Mr. Keough
met with Silberstein on various occasions, including in early May 1994
and on August 15, 1994 (Armstrong Report, at p. 104) and gave Silberstein
his books and documents. Armstrong Report, at p. 58.
Texaco's legal team failed to give the Finance Department a copy of
the second document request and furthermore did not give the Finance Department
even an excerpted version or summary of the request. Armstrong Report,
at p. 54. Then, during the period that the documents were being collected,
the Texaco Legal Team failed even to meet with the Finance Department.
Armstrong Report, at p. 55.
Texaco and its agents knew, or should have known, that absent adequate
supervision, including their failure to give copies of the document requests
to the Finance Department (Armstrong Report, p. 101), it was foreseeable
that Texaco employees, who were not trained to read legal document requests,
and in some cases were not even given copies of the document requests,
would be unable to adequately respond and would cause harm. Texaco's legal
team even failed to advise the Finance Department with respect to the relevant
discovery period. Armstrong Report, at p. 53.
Texaco, its in-house legal staff, and Kaye Scholer acted negligently
and recklessly. They all knew of the documents that existed in the Finance
Department. Nevertheless, when certain documents were not produced by Texaco's
legal team, Texaco conveniently laid the blame on Mr. Keough rather than
at the feet of the Texaco legal team. In fact, Silberstein actually reviewed
Keough's documents early in the litigation and then returned them to him.
The negligent supervision by Texaco and its agents was a proximate cause
in the fiasco which resulted from the inadequate document production in
Roberts which has caused harm to Keough.
As a direct and proximate result of Texaco's actions, Mr. Keough has
incurred damages in excess of $12,000,000.00.
EIGHTH CAUSE OF ACTION
(Tortious Interference With An Employment Relationship Against Robinson
and RLM)
Plaintiff repeats and realleges each and every allegation set forth
in paragraphs 1 through 111 as if fully set forth herein
Robinson and RLM were aware that Mr. Keough was employed by Texaco,
and dishonestly, unfairly and improperly interfered with that employment
relationship by advising, encouraging and inducing Texaco to terminate
Mr. Keough and to issue statements and press releases that wronged Mr.
Keough.
Robinson and RLM were aware that Texaco had no reason or cause to terminate
Mr. Keough. Nevertheless, Robinson and RLM, through dishonest and improper
means, caused and assisted Texaco to terminate Mr. Keough and to issue
false public statements relating to Mr. Keough, as part of their public
relations strategy for Texaco, and for the sole purpose of harming Mr.
Keough and interfering with Mr. Keough's employment relationship with Texaco.
As a direct and proximate result of Robinson's and RLM's actions, Mr.
Keough has incurred damages in excess of $12,000,000.00.
PRAYER FOR RELIEF
WHEREFORE, Plaintiff, prays for relief as follows:
1. Under the First Cause of Action for Libel Per Se against Texaco and
Bijur, compensatory damages in excess of $12,000,000.00 and punitive damages
to be determined at trial;
2.Under the Second Cause of Action for Libel against Texaco and Bijur,
compensatory damages in excess of $12,000,000.00 and punitive damages to
be determined at trial;
3.Under the Third Cause of Action for the Intentional Infliction of
Emotional Distress against Texaco, Bijur, Robinson and RLM, compensatory
damages in excess of $40,000,000.00 and punitive damages to be determined
at trial;
4.Under the Fourth Cause of Action for Wrongful Termination in Violation
of Public Policy against Texaco and Texaco International, compensatory
damages in excess of $12,000,000.00 and punitive damages to be determined
at trial;
5.Under the Fifth Cause of Action for Wrongful Dismissal in Violation
of Bermuda law against Texaco and Texaco International, compensatory damages
in excess of $12,000,000.00 and punitive damages to be determined at trial;
6.Under the Sixth Cause of Action for Promissory Estoppel Against Texaco
and Texaco International, compensatory damages in excess of $12,000,000.00.
7. Under the Seventh Cause of Action for Negligent Supervision Against
Texaco and Texaco International, compensatory damages in excess of $12,000,000.00.
8. Under the Eighth Cause of Action for Tortious Interference with an
Employment Relationship Against Robinson and RLM, compensatory damages
in excess of $12,000,000.00.
JURY DEMAND
Plaintiff demands trial by jury.
Blair C. Fensterstock (BF 2020)
Brock, Fensterstock, Silverstein,
McAuliffe & Wade, LLC
Citicorp Center, 56th Floor
153 E. 53rd Street
New York, New York 10022
(212) 371-2000