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Ala. Co. To Pay $5M in Bias Suit

January 5, 2001

BIRMINGHAM, Ala. (AP) _ A company said Thursday that it will pay $5 million to settle claims that a segregation-era rule in its employee health plan was discriminatory.

The settlement brought an end to a 1986 lawsuit alleging racial and sexual discrimination by American Cast Iron Pipe Co.

The company required that children of employees had to live with the worker to be eligible for health or dental care at the company’s onsite clinic, one of the few such facilities in the nation.

A federal jury in 1995 sided with workers who claimed the rule was a racially motivated attempt to keep the children of unmarried men, particularly blacks, off the health plan. Testimony showed such youngsters were sometimes referred to as ``yard children″ by executives.

The company, which employs about 3,000 people nationwide, quit enforcing the residency policy in 1993.

The government said about 346 men will receive payments for the loss of medical and dental coverage for their children.

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