WealthManagement Magazine

Smith Barney and Harassment Plaintiffs Working on Agreement

At a pre-trial conference held on Oct. 9 in the U.S. District Court in Manhattan, the attorneys for both sides of the Smith Barney discrimination and sexual harassment cases told Judge Constance Baker Motley that they had reached an "agreement in principle" to settle, and were working toward a final draft of a settlement agreement. The proposed settlement would incorporate two separate Smith Barney

At a pre-trial conference held on Oct. 9 in the U.S. District Court in Manhattan, the attorneys for both sides of the Smith Barney discrimination and sexual harassment cases told Judge Constance Baker Motley that they had reached an "agreement in principle" to settle, and were working toward a final draft of a settlement agreement. The proposed settlement would incorporate two separate Smith Barney harassment and discrimination cases, one filed in New York and the other in California.

"Of course, we judges like to hear nothing better than a case is being settled, but I think this case has been around for a while, so if it isn't settled, we're going to have to move it," Baker Motley said, in setting a deadline of Nov. 18 for a final settlement agreement to be presented to the court.

If a final settlement has not been reached by Nov. 18, Baker Motley is expected to proceed to a pre-trial discovery phase.

The original complaint in the New York case, which included the three plaintiffs from Smith Barney's Garden City, Long Island, branch--Pamela Martens, Judith Mione and Roberta O'Brien Thomann--was filed in May 1996. An amended complaint, which was expanded to include another 22 women, was filed the following September.

The two sides also confirmed that this would be a class-action settlement. That means the agreement will cover all female employees at the firm.

A draft of the proposed settlement document currently is being shown to the plaintiffs. Several sources report that the named plaintiffs will receive "incentive bonuses" ranging from a high of $150,000 to a low of $20,000.

If the discrimination and harassment cases do go through as a single class-action settlement, it doesn't mean that all women at Smith Barney will automatically receive cash payments. Smith Barney's female employees would likely present their individual claims at a one-day mediation session. If that fails, the individual would be entitled to a hearing before a three-person panel.

Smith Barney would not comment for the record.

As previously reported on the RR Web site (www.rrmag.com), on Sept. 10 Martens was dropped by the plaintiffs' attorneys in the case, Mary Stowell and Linda Friedman of Chicago. Martens is no longer considered a class representative and would not receive the incentive bonus. But she is still a named plaintiff in the main New York case.

Martens says Stowell and Friedman have refused to provide her and an attorney with whom she is negotiating for representation, with a copy of the draft. It is not yet known how many of the plaintiffs will agree to the terms of the proposed settlement.

"The only women who are guaranteed to walk away with anything in their pockets is 21 of the class reps," Martens says. "We didn't spend three years working on this case to swap arbitration for mediation."

Also at the court hearing, an attorney from the New York Stock Exchange asked the judge to "dismiss as moot" the single count contained in the Martens suit against the NYSE and the NASD. That complaint alleges that mandatory arbitration at the NYSE and the NASD is unconstitutional and a violation of due process.

Stowell and Friedman told the judge they intended to pursue the claim against the SROs as a separate matter. Baker Motley suggested she would rule against them on that count.

Meanwhile, sources are reporting the discrimination case filed in Chicago by the same law firm against Merrill Lynch is midway through the mediation process. The judge in that case has scheduled a status conference for Nov. 6.

Merrill Lynch did not comment by press time.

For an expanded version of this story, see rrmag.com, Breaking News section.

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