Posted on: Thursday, January 6, 2005

Top city nominee settled race lawsuit

By Curtis Lum
Advertiser Staff Writer

A spokesman for Mufi Hannemann said the mayor plans to meet with managing director nominee John Reed to discuss published reports that Reed was the subject of a racial discrimination and harassment lawsuit in California.

Hannemann on Tuesday named Reed to his administration's top cabinet post. Reed is a former regional president of DFS, formerly known as Duty Free Shoppers, and also founded the teeth-whitening company BriteSmile Inc. in California.

It was in his role as chief executive officer of BriteSmile that Reed was named in a lawsuit filed in December 2003 by three former company employees. The three black women alleged that Reed created a racially discriminatory work environment and also made crude racial remarks to them, according to the Contra Costa Times of California.

The women sought an undetermined amount in damages.

Reed yesterday characterized the lawsuit as a form of "extortion" and said the case was settled out of court. He also denied using racial slurs.

"It's a small settlement," Reed said. "And from our viewpoint, it was simple extortion. But we had to let it go. Otherwise it would cost four or five times as much to litigate."

Hannemann spokesman Bill Brennan said last night that the mayor was not aware of the lawsuit when he selected Reed.

"The mayor has said that he asked John Reed, as he asked all his department head nominees, if there was anything in their background that could cause embarrassment to them or the administration because they would have to be confirmed by the City Council, and my understanding is that Mr. Reed replied in the negative, that, no, I have nothing to hide," Brennan said.

Reed, a longtime Hawai'i business leader before helping found BriteSmile in 1999, said Hannemann's search committee hadn't asked him about the lawsuit.

The Associated Press contributed to this report. Reach Curtis Lum at 525-8025 or culum@honoluluadvertiser.com.