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RISKVUE ARCHIVE | INDUSTRY WATCH > EMPLOYMENT PRACTICES LIABILITY (EPL)
Class-Action EPL Suits
By Andrea Black
Employee lawsuits make risk managers nervous, but this one is a doozy. On March 2, attorneys representing 927 women finished filing a gender discrimination class action suit against $501 billion (in assets) Merrill Lynch, the New York-based investment bank. Former employees were eligible to participate. Merrill has until June 1 to respond. “We are stunned by the numbers,” says Mary Stowell, a partner at Stowell & Friedman, the Chicago-based attorney who is arguing the case for the plaintiffs.
When asked what he would do if he were faced with a similar situation, one risk manager at a $2.5 billion company quipped: After I take some valium? Call the lawyers and the insurance company to find out how much the firm is protected.”
Obviously, the suit is no laughing matter. It charges systematic economic discrimination entailing pay differences, office support, training, goal setting and responsibility. “The statistical analysis of the human resource data base shows a huge discrepancy between the earnings of women and their male peers,” says Stowell. One woman broker received 80 accounts worth $1,000 each, while her male peers each received one or two accounts totaling $80,000.
Wall Street has always been a boys’ club. Yet proving gender discrimination has not been easy. Another lawsuit under way involves Salomon Smith Barney, the New York-based brokerage firm with more than $115 billion in assets. Some 22,000 women are eligible to join that suit, which, like that against Merrill Lynch, will be argued by Stowell & Friedman.
No Merrill Lynch risk manager was available for comment. But company spokesman Bill Halldin says, “If employees find themselves involved in discrimination, they have options, including filing a complaint with the firm.”
Some of the women in the suit lodged their original grievance as a complaint. But after it went unresolved for months, they went to Stowell to expedite the process. In July 1998, after the original eight women filed suit against the firm, Merrill integrated a new program for all employees. The objective, Halldin explains, is to find resolution by providing employees with arbitration and mediation assistance, making law suits unnecessary.
Typically, when class action suits are settled, a lump sum of money is divided evenly among the plaintiffs. In the Merrill Lynch case, each claim will be reviewed individually by the brokerage firm. Both Merrill Lynch and the plaintiffs agreed on this approach. Now, there is no cap on what the women may receive in damages. In addition, if the women do win their case, all fees will be paid by Merrill Lynch. 
ABOUT THE AUTHOR
Source: Treasury & Risk Management, May/June 1999. Copyright 1999 by CFO Publishing Corp.
riskVue | The webzine for risk management profesionals
June 1999
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