Whew—that was a close one for Morgan Stanley. It managed to settle its sex-discrimination case with the Equal Employment Opportunity Commission even as the courtroom was awaiting the words “All rise.” The $54 million deal paid for itself thanks to the proviso that payroll statistics—information that could show whether there was a pattern of discrimination—would be sealed.
But Wall Street can’t breathe easy just yet. Contentious sex-discrimination cases will keep the courts busy at least through the fall. Could they make a difference on the gender-discrimination front? Definitely, if the women don’t get bought out first. On Wall Street, embarrassment brings change.
Much of the stress is being stoked by the final round in two big class-action suits. Of the nearly 3,000 women who filed claims in the 1996 and 1997 suits against Smith Barney and Merrill Lynch, most settled, thus keeping their stories out of the press. But stalwart claimants who insisted on a hearing are finally getting one. In a session scheduled to start September 13 in New York, Nancy Thomas will testify that a male colleague at Merrill left a dildo on her desk one day. Sonia Ingram, another Merrill class rep, will be back before the arbitrators on October 22. To the Street’s further consternation, a federal judge in New York said on July 20 that UBS AG had willfully destroyed evidence in the gender-discrimination case brought by Laura Zubulake, a former equities trader. There’s a pretrial conference in that case on October 13.
Hearings just finished for two former Smith Barney women who now await decisions. Deborah Paulhus was a broker in the One Penn Plaza office of Smith Barney, where 25 women have filed claims in the 1996 class-action suit. At Paulhus’s hearing in July, branch manager “Shake ’em and Bake ’em Al” Kirchner testified he got his nickname not—as women testified—because he shimmied his body up against female employees, but for a favorite sports chant (“Come on, honey baby doll, let’s shake and bake, let’s go, go, go, let’s do, do, do it!”) he used in the office.
Neill Sites, a former Smith Barney division broker in Atlanta, also finished her hearing in July. Smith Barney is working to keep the lid on that case, in which Sites alleges she was excluded from dozens of important meetings with company analysts. Its lawyers objected to a reporter’s request for the arbitration transcript.
Overseas, Merrill is still spinning from a $1.3 million settlement in July over a London lawyer whose colleague commented on the size of her breasts. In August, Merrill will be back at battle in the U.K. when the case of Stephanie Villalba, the former senior executive known for being asked by a male colleague to sit in the “stewardess seat” on the company plane, returns to trial.
And as yet unheard from are the Morgan Stanley 340: the number of women who have been invited to file claims in the just-settled case brought by the EEOC.
Finally, there is Martha Burk, chair of the National Council of Women’s Organizations, who fought William “Hootie” Johnson over the exclusion of women from the Augusta National Golf Club. Wall Street is her new battleground. “No later than next spring, we will have more than one case on file,” says Cyrus Mehri, the Washington, D.C., lawyer Burk hired to look into financial-industry discrimination. Mehri, who won $176 million from Texaco for race claimants, won’t say which firm it is, but claims he’s already uncovered a “widespread situation of overt sexual harassment.” When it comes to sex on Wall Street, the trading day never ends.