In its third annual report, the Texaco Task Force on Equality and Fairness has commended Texaco's continued progress and commitment to implementing programs that promote its core values of diversity and respect for the individual despite significant business challenges facing the entire oil industry during 1999.

The independent Task Force was created in June 1997 as a component of the Settlement Agreement in the Roberts, et al. v. Texaco Inc. lawsuit. The purpose of the Task Force is to oversee Texaco's implementation of a comprehensive human resources program that is designed to ensure fairness and equal opportunity for all employees of Texaco. The Task Force has completed its third year of a five-year term, serving as special masters for Judge Charles L. Brieant of the U.S. District Court for the Southern District in White Plains, N.Y.

The report, which was filed today with Judge Brieant, noted, "Texaco has maintained its commitment to pursuing ambitious equal opportunity and diversity goals despite a severe downturn in oil industry business conditions due to depressed oil prices that persisted into late 1999. The fact that Texaco has not compromised its commitment to pursuing equal opportunity and diversity in the face of such conditions is impressive, and the Task Force commends the Company for staying the course."

The report identifies this economic downturn as one reason for a decrease in Texaco's workforce. Despite these workforce reductions, the Task Force found that Texaco still exceeded its diversity workforce goals in 1999. Specifically, the percentage of minority employees at Texaco increased from 21.1% to 22.4%, and the percentage of female employees increased from 26.0% to 26.6%. Overall, minorities made up 44% of new hires; women comprised 49.4% of new hires; and together, women and minorities made up 67.7% of new hires. The report stated that white males made up 32.3% of all new hires.

The report also acknowledged the commitment of Texaco's leadership. "Through the values espoused by its leadership and its efforts to improve its employment practices, the Company continues to communicate effectively the message that it will not tolerate discrimination, harassment, or retaliation in its workplace and that equality and fairness for all employees are central to its mission as a highly competitive business enterprise."

The Task Force did recognize the continued challenges facing the company in this regard. According to the report, "Texaco acknowledges that, despite successes and progress gained thus far in initiatives to improve its human resources programs, continued commitment throughout the Company is required to transform the initiatives into practices that survive the life of the Task Force…. The Task Force will continue to assess Texaco's responses to these challenges, as well as monitoring the ongoing effectiveness and impact of Texaco's human resources programs."

Commenting on the report, Task Force Chairperson Thomas S. Williamson, Jr., a partner in the Washington, D.C. law firm of Covington and Burling, said, "Each member of this Task Force has made valuable contributions to this effort, and I applaud the continuing enthusiasm and rigor that they bring to the oversight process."

In addition to Williamson, members of the Task Force include the Honorable John J. Gibbons, Dr. Jeffalyn Johnson, Allen J. Krowe, Professor Mari J. Matsuda, Luis G. Nogales, and Dr. James M. Rosser.

Highlights of the Report

1. Texaco met its diversity goals for 1999, despite deteriorating business conditions due to low crude oil prices; and the Company has established more challenging goals for the year 2000.

2. Texaco increased the diversity within its executive ranks and among promoted employees.

3. At the same time Texaco has been making diversity gains, the Company has improved the efficiency and productivity of its workforce.

4. Texaco has enhanced the fairness and competitiveness of its hiring and promotions by requiring that professionally developed job competencies be systematically used to assess new hires and candidates for promotion.

5. Texaco has significantly expanded the use of job-posting in its U.S. operations in order to increase opportunities for advancement for all employees nationwide.

6. The Ombuds Program has emerged as employees' preferred option for dispute resolution, and this has facilitated prompt resolution of issues that might otherwise have become more serious problems.

7. Texaco adopted innovative screening criteria for search firms that ensured that the pool of candidates for recently filled, high-level management jobs would include experienced and well-qualified minorities and women.

8. Texaco's human resources staff is in the process of implementing plans for delivering ongoing diversity education and training to employees, especially as part of management training.

9. Texaco has maintained its managerial compensation system that conditions bonus pay upon satisfactory diversity performance, both by the Company and the individual managers.

10. Even though Texaco made significant progress in implementing the Performance Management Process (PMP) for evaluating and developing employees, the PMP continues to receive negative ratings from the majority of employees. Increasing the percentage of managers who can more effectively implement PMP is needed.

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