$2.2 million awarded to female ex-broker

Discrimination in 1990s found at Merrill Lynch


Merrill Lynch & Co., the nation's biggest brokerage, discriminated against female stockbrokers, according to a panel of arbitrators that has awarded $2.2 million to one of them.

That decision, which was made Monday but not disclosed until yesterday, was the first legal ruling that any Wall Street company had engaged in systematic discrimination. The finding could be used to bolster the claims of about 40 current and former Merrill brokers who have not settled their discrimination claims against the company.

Merrill has paid out more than $100 million in settlements with hundreds of other women who joined a class action case against the company more than five years ago.

Merrill and another large brokerage, the Smith Barney unit of Citigroup, are in the latter stages of the protracted process of resolving mass claims of sex discrimination that were filed in the late 1990s.

Women who had been brokers at the two companies contended that they continued to favor men and pay them more than women long after many other white-collar industries had ended such practices.

Since those suits were filed, the biggest companies on Wall Street have said that they have improved their treatment of female employees and have taken steps to prevent sexual harassment on the job.

Eight women representing female employees of Merrill's brokerage operation sued in 1997, contending that they had been denied promotions and opportunities to succeed that were routinely offered to their male co-workers. Some also contended that they had been subjected to sexual harassment in a hostile work environment. The class included 2,800 women, more than 900 of whom brought claims.

Merrill settled the original lawsuit by agreeing to resolve the claims individually, through mediation, then arbitration.

"Merrill's failure to train, counsel or discipline employees who engaged in sexual harassment constitutes discrimination with malice or reckless indifference to the federally protected rights of female employees," the arbitrators wrote in their decision in favor of E. Hydie Sumner, a former Merrill broker.

The decision was the first to accept the class claim that Merrill systematically discriminated against female employees of its nationwide brokerage business, and it came with the largest monetary award.

Sumner, who worked for Merrill in San Antonio from 1991 to 1997, contended that her supervisor, Stephen McAnally, harassed her and other women and minorities, and retaliated against her when she complained to the company about his behavior.

McAnally responded to the women's complaints by distributing around the office he managed copies of a magazine article titled "Stop Whining" that warned, "Constant complaining can cost you your job," the decision said.

To compensate for Merrill's retaliation, the arbitrators went beyond the limit on punitive damages, awarding Sumner $500,000 on top of more than $1.6 million in back pay and lost earnings. The total of $2.2 million exceeded the $500,000 awarded to another plaintiff last fall, the only other award arbitrators have made to a woman who has gone through the Merrill claim-resolution process.

In granting the award to Sumner, the panel found that Merrill had violated Title VII of the Civil Rights Act of 1964, the federal Equal Pay Act and Texas labor law. The panel rejected her claim that Merrill had driven her to quit her job.

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