Cases

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