Ex-manager's discrimination suit against T. Rowe Price thrown out

April 30, 1994|By Marcia Myers | Marcia Myers,Sun Staff Writer

A federal judge yesterday threw out a $10 million discrimination suit against T. Rowe Price that was filed two years ago by a fund manager.

The suit, brought by Debra J. Diamond -- a former portfolio manager and financial analyst with the company -- claimed a wide-ranging pattern of discrimination against women and Jews. She said the firm did not pay or promote her equally with her male counterparts, and mistreated her because she is Jewish.

But in a 108-page decision, U.S. District Judge Benson E. Legg rejected all of her claims. Richard J. Hafets, an attorney for the firm, called the ruling a "complete vindication."

Ms. Diamond in the mid-1980s had created and managed a highly successful limited partnership called New Frontier Fund I. At its inception, she negotiated a contract with T. Rowe Price for a base salary, plus bonuses according to the fund's performance. When the fund was liquidated in 1989, Ms. Diamond received her $100,000 annual salary plus nearly $1 million in bonuses, according to court records.

She signed a similar contract when she established a new fund the same year. Her troubles began when the fund's value sharply dropped in 1991 and investors began to complain. Her compensation took a corresponding dive. The situation became so serious that T. Rowe Price decided investors should vote on whether to liquidate the fund. They voted overwhelmingly to do so, court records say.

In her suit, Ms. Diamond claimed that the manner in which T. Rowe Price took the fund out of her hands effectively forced her from the firm.

But the judge ruled that Ms. Diamond insisted on a contract that determined her compensation, and the company had no obligation to pay her more.

Company executives had encouraged her to stay with the firm, where she had worked since 1977, but Ms. Diamond walked away of her own accord, the judge found. Her claim that she should have been promoted to managing director also was dismissed. Her contributions were substantial, but "simply did not approach the managing director level," the judge ruled. He also found no evidence of religious discrimination.

Ms. Diamond, who hosts radio programs on investment topics and who works independently as a money manager, called the judge's ruling "legally and factually incorrect."

"We're considering a number of options, including an appeal," she said.

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