A month before trial, city of Chicago agrees to $5.8 million settlement in lawsuit alleging rampant racism at Water Department

CHICAGO — A month before what could have been an embarrassing trial, the city has agreed to a $5.8 million settlement in a lawsuit alleging Black employees at the Chicago Department of Water Management were subjected to years of racist and sexist slurs, including some by politically connected top-level supervisors.

The parties announced they had reached an agreement during a status hearing Monday before U.S. District Judge Matthew Kennelly, who vacated the June 5 trial date.

Plaintiffs’ attorney Victor Henderson later confirmed the $5.8 million settlement figure, which has not been finalized and will need to be approved by the City Council.

A lawyer for the city told the judge the parties were confident the settlement would be ready for consideration at the City Council meeting in mid-June.

The settlement comes less than a month after Kennelly ruled there was sufficient evidence for a reasonable jury to find “that the city had a custom or policy of condoning racial harassment and discrimination at (the Water Department) as well as inaction in the face of a risk of potential constitutional violations.”

The trial was expected to feature a number of current or former high-ranking city officials as witnesses and will shine a harsh light on allegations of unseemly treatment.

Among the allegations by the plaintiffs: Repeated use of the N-word, references to Black employees by supervisors as “you people,” and, in one instance, a foreman who allegedly mocked an African American employee’s skin tone and instructed the employee to stand next to a door “to see if it was painted black.”

In a written statement Monday, Henderson said the entrenched racism at the department lasted for decades and affected countless Black employees, which “raises the question why the city’s uppermost leaders failed to act.”

“The sad and most obvious answer is that they did not care,” Henderson said. “It is plain to anyone who looked that the racism cascaded from the very top of the organization like water travels down a hill.”

A spokeswoman for the city’s Law Department declined to comment Monday.

After Kennelly’s ruling last month cleared the case for trial, lawyers for the plaintiffs filed a motion to force former Mayor Rahm Emanuel to testify via a video hookup from Japan, where Emanuel is currently serving as U.S. ambassador.

According to the motion, Emanuel should be compelled to testify about his comments about an Inspector General investigation into the toxic culture at the Water Department, as well as his decision to fire then-Commissioner Barrett Murphy.

“We were made aware from an IG report on one particular employee,” Emanuel told news outlets at the time. “But in that process, it exposed a culture in the Water Department and in the workplace that, in my view, does not represent what the city’s values are.”

“Although Emanuel was careful to avoid using the word racism, his comments indicate racism is what he was referring to when he was speaking about the ‘culture’ at the (Water Department),” the plaintiffs’ motion stated. “Plaintiffs should be permitted to question Emanuel at trial where they can follow up about what he referring to in his comments.”

The city objected to Emanuel being subpoenaed, writing in response last week that Emanuel had no independent knowledge of the plaintiffs’ claims and that Emanuel had already provided a written declaration to the court affirming the quotes attributed to him were accurate.

“There is no evidence whatsoever that Emanuel’s statements to the media were unclear or evasive, or that the declaration he submitted in this lawsuit…was incomplete or untruthful,” the city’s response stated.

Kennelly had held off ruling on the issue while settlement negotiations proceeded.

The lawsuit was filed in federal district court in 2017 after a monthslong watchdog probe ferreted out racist and sexist emails shared among department supervisors, prompting Emanuel to order the leadership shakeup.

In his final report issued in 2018, then city Inspector General Joseph Ferguson recommended that total of seven water department employees be disciplined for their actions in sharing or failing to report racist and sexist emails, which circulated among city employees for at least five years.

Among the communications examined in Ferguson’s investigation were offensive jokes about Barack Obama, the nation’s first black president, which were periodically shared among department employees, including one email with the subject line “Obama Angry with Texas!!”

According to Ferguson’s report, the email states in part: “Obama will be making no more public speeches in Texas. … He claims every time he gets up on stage to make a speech, some South Texas cotton farmers start bidding on him.”

Another email had the subject line “Black NASCAR drivers??” It purported to list reasons “why there are no black NASCAR drivers,” according to the report. They included: “Pistol won’t stay under front seat,” “Engine noise drowns out the rap music,” “They keep trying to carjack Dale Earnhardt Jr.”