SFA Business Professor Says Lawsuits Can Affect Business On Many Different Levels

by Stuart Burson

Lufkin Industries plans to appeal a judge's ruling that it may have to pay as much as six million dollars to workers to settle a discrimination lawsuit. The suit covers about 700 employees and claims blacks and Hispanics were assigned to work at the company's foundry, described as having some of the harshest working conditions. The suit also claims minorities were not given sufficient training and promotion opportunities at the company, leading to lower wages.

The lawsuit against Lufkin Industries is described by some as one of the largest civil rights lawsuits East Texas has ever seen. Tuesday, we caught up with some employees at the foundry gate to get their thoughts on the lawsuit against their company and the current working environment.

"You know, fair is fair, you know. That's what I think. You got to treat everybody fairly. Treat them all equally, give them the same opportunities," said foundry worker Lee Brown.

In a press release issued by Lufkin Industries, the company says they are disappointed with the court's conclusions and decisions, and believes them to be contrary to the evidence and the law.  Lufkin Industries officials say they plan to appeal the case, but the press release goes on to say that if the appeal is unsuccessful, the company's reported earnings and cash flow could be affected in a future report.

A lawsuit like this can do more than just have an effect on a business' earnings. SFA business professor Dr. Keaton Grubbs says other things can also be affected.

"It can affect the value of stock, vendors, suppliers, customers --certainly all of those. A community, the perception of the company, in the eyes of those kinds of stakeholders -- all of that can be impacted. Just depending on how people perceive what is going to happen with the business as far as the award."