Coca-Cola Won’t Push Diversity Initiative On Outside

The Coca-Cola Co. confirmed Monday it is not implementing a controversial diversity initiative requiring outside counsel to allocate a portion of work to Black attorneys and other lawyers from underrepresented groups.

The beverage giant pressed pause on the proposed policy a few months after it was introduced in January 2021 by the company’s then-general counsel Bradley Gayton, who was replaced in April 2021.

The company clarified to Law360 on Monday that the initiative will not go ahead, as first reported by Business Insider.

“Coca-Cola remains fully committed to advancing equity, diversity and inclusion in the legal profession, and will continue to evaluate the best way to support these fundamental values,” a company spokesperson said in an email.

Gayton’s initiative expected at least 30% of lawyers on new matters for the Atlanta-based company would be from underrepresented groups, and that at least half of those lawyers would be Black. The ultimate goal was to have diverse billing reach a minimum of 50%.

Coca-Cola said Monday the guidelines had never been implemented as a company policy when Gayton ended his term as general counsel and his replacement, Monica Howard Douglas, had confirmed the guidelines, among other previously contemplated initiatives, were not in effect.

From general counsel, Gayton moved to a year-long position within Coca-Cola as a strategic consultant to CEO James Quincey and also joined the board of directors for tax technology company Vertex Inc. Attempts to contact him on Monday were not successful.

Gayton had worked for almost 30 years at Ford Motor Co. before transitioning to Coca-Cola in September 2020. His diversity policy for the beverage giant proved controversial among some CocaCola shareholders, prompting a letter to the company board in June 2021, threatening legal action unless the requirements were scrapped.

Under Gayton’s proposal, failure to meet the diversity requirements over two quarters would result in a nonrefundable 30% reduction of fees and, potentially, no more work for Coca-Cola.

“We are too quick to celebrate stagnant progress and reward intention,” Gayton said about his initiative in January 2021. “We have a crisis on our hands and we need to commit ourselves to specific actions that will accelerate the diversity of the legal profession.”

Coca-Cola initially said the changes would take immediate effect for all new engagements in the U.S. But the company paused the plan after Gayton’s role change.

In January, legal recruiters and attorneys in Atlanta told Law360 the Coca-Cola diversity push was still making waves.

The requirements were likely too ahead-of-the-times for Coca-Cola, said legal recruitment manager Bonnie M. Youn, of The RMN Agency.

“The pushback was likely significant, both externally and internally,” Youn said in January. “Within the diverse halls of BigLaw, I know there were whispered hopes that true change was underway.”

Litigation and public policy boutique Boyden Gray & Associates PLLC lambasted the diversity plan in a letter to Coca-Cola board members in April 2021, calling its “racial quota requirements” unlawful. The firm said federal law has prohibited all forms of racial discrimination in private contracting since the Civil Rights Act of 1866 and that decades of case law have held that policies which seek to impose permanent racial balancing aren’t allowed.

–Additional reporting by Michele Gorman, Kevin Penton and Emma Whitford. Editing by Lakshna Mehta.

Read the full piece at Law360 here.