WealthManagement Magazine

Foul or Fair

Q: I'm 54 years old and, 19 years ago, was the first woman hired by my firm, which settled a sexual discrimination complaint filed by women employees last year for $54 million. I've got a couple of questions relating to my termination at the firm. But first some back story: Three years ago, my firm demanded that I move all of my clients into managed accounts and get rid of all accounts under $35,000.


I'm 54 years old and, 19 years ago, was the first woman hired by my firm, which settled a sexual discrimination complaint filed by women employees last year for $54 million. I've got a couple of questions relating to my termination at the firm. But first some back story:

Three years ago, my firm demanded that I move all of my clients into managed accounts and get rid of all accounts under $35,000. I lost almost half of my clients in the shift. At about the same time, the firm eliminated my sales assistant, using my lower production as a reason. I now spend 20 to 25 hours weekly on work formerly handled by her.

Two years ago, a young, aggressive sales manager came in and promptly dumped on me 200 accounts, each with less than $200,000 in assets. It took me a year to clean these accounts up. When the dust settled, I had approximately 250 clients and managed approximately $20 million to $25 million.

Now to the meat of the matter: When I sat down at my desk a few weeks back, my computer would not turn on. I was trying to figure out how to call for help, when the branch manager, accompanied by the operations manager, poked his head in the door and said, “You're fired. You have 30 minutes to get out.” “Can you give me a minute?” I responded. “I'm not going to cry, but I can't think.” I knew I wanted the ops manager to witness my departure, so I couldn't be accused of any negative behavior. The ops manager suggested I get some boxes and start packing my personal belongings. I asked if I would be getting a severance. The ops manager said no. The branch manager said I'd get my commission check, if I'd earned any.

They gave me a couple of sheets of paper detailing my benefits. I'm covered for 18 months of medical insurance under COBRA. I was one year and two months away from having medical coverage at my current payment until age 65. I'm certain that played into their considerations. I left, not saying goodbye to anyone.

I'm a high profile, well-respected member of my community. I'm on a lot of community boards. In fact, about two weeks before I was fired, a regional director for my firm's public finance department contacted me for all my municipal contacts, which I gave him.

Of the four branch managers (two women) I've served under in the last eight years, one doled out accounts to favorites at marathon drinking sessions, and another gave accounts to a lover. I never received a performance review unless I asked for it.

Given all this, am I correct in my belief that I was discriminated against regarding account distribution, training opportunities, marketing, support and partnership opportunities because I was a woman rep who wasn't aligned with a male partner to protect me?

Second, even though I was an employee-at-will, do I deserve a severance because I did all of the administrative work for three years — was forced to do it to keep my job? An administrative assistant would have gotten a severance package, correct?


Controversy permeates the securities industry. Its employment practices are no exception. Last month's shake-up at Morgan Stanley left 1,000 brokers out on the street or scrambling for job security, a familiar story in today's corporate scene. Sex discrimination suits are at an all-time high, too. Class actions against Smith Barney, Merrill Lynch and others have raised public awareness of the security industry's internal struggles over gender equality.

Addressing your discrimination concerns, there are two methods by which to prove a case of discrimination: the direct and the indirect. The direct method is simpler but inapplicable here. You have not provided evidence, for example, that your firm earmarked large accounts for distribution to men and small accounts to women. You did not report being told that you were deprived of an administrative assistant because only men deserve them, or that you were terminated because you were getting too old. Without overt, blatant evidence that gender or age bias were behind your terms or conditions of employment, you must proceed by the indirect method of proof.

The indirect method permits you to establish a prima facie case that you are a victim of discrimination. First, you must be in a protected class. You can be a victim of sex discrimination if you are male or female, and age discrimination requires that you be over 40 years old. Second, your job performance must have been meeting your employer's expectations. You provided little information on this issue. For now, we will assume you can satisfy this requirement.

Third, you must have suffered a negative employment action. Several are listed in your discussion, including losing your administrative assistant and termination.

Fourth, employees outside of your protected classes must have been treated more favorably. Were referrals and departing broker's books distributed to you less favorably than to your male or under-40 co-workers? Did a male with lesser qualifications than yours replace you? Were under-40 male co-workers afforded training opportunities that were denied to you? Answering yes to these questions would support step four. Contrary to your belief, however, employers are not required to align protective male employees with female partners.

Once you establish a prima facie case, your former employer must provide a nondiscriminatory reason for the actions taken against you. Perhaps many brokers, male and female, were simultaneously terminated due to budgeting constraints or changes in performance expectations, as may have occurred in your case. Maybe administrative assistants are only provided to brokers who exceed a threshold performance level. Employers are usually able to overcome the prima facie case, shifting the burden back to the employee.

Finally, you must prove that the firm's asserted nondiscriminatory basis for the adverse employment actions were untrue. Were all of the terminated employees female? Was there a lack of evidence of budgeting issues? Maybe administrative assistants were provided to male brokers who were below the indicated threshold performance level. Again, further fact gathering is necessary to determine the strength of your particular case.

A sex or age discrimination claim must initially be filed with the U.S. Equal Employment Opportunity Commission (EEOC) (eeoc.gov). With few exceptions, filing must occur within 180 days from the date of the alleged violation. Even if you are beyond the 180-day EEOC limitation period, you can still bring charges such as breach of contract and other claims not based in civil rights law. While I cannot address all of them here, the breach of contract claim warrants attention.

Contracts are created when an offer is made and accepted, and consideration (value) exchanged. At the outset of your relationship, your former firm offered terms of employment through your contract. You accepted. You conducted business on behalf of your firm and the firm paid consideration by compensating you according to your contract terms.

A breach of contract occurs when a party acts outside the parameters of the contract's terms. Your former firm may have breached through imposing on you unsatisfactory account assignments, by eliminating your assistant or by changing your required performance levels. Your contract might provide for missed training or partnership opportunities, marketing support and severance, or it might not. It is irrelevant whether an administrative assistant would have been provided. Your rights are defined by your contract, not your assistant's. As for COBRA, that is a right to which you are entitled under law, but the firm is not required to pay.

The employment attorney you select will know the various sources from which your rights derive, how to evaluate conduct that may have constituted a breach and what other claims may apply in your case. Ideally, she should also have a background in securities. You can initiate your search for an attorney via Web sites, including findlaw.com, martindale.com and lawyers.com. State bar associations and yellow pages also provide listings by specialty. Make certain the lawyer you select counsels you on whether it is worth the time, money and effort of pursuing a claim. Lawsuits take high emotional tolls on even the most deserving plaintiff.

Lysa Postula-Stein, Esq.
Offices of Anthony V. Trogan
West Bloomfield, Mich.
[email protected]


Because you are an employee-at-will, your employer has the right to terminate your employment at their discretion. It is not clear from your narrative whether or not you have an employment agreement or some form of a contract governing the terms of your employment.

It is fairly common in the industry for brokers to enter into employment contracts that specify the terms and conditions of their employment. Such employment contracts generally specify a broad range of conditions, which, if not met, provide the grounds for termination of employment. For instance, many broker's contracts contain minimum commission production clauses that give a firm the right to terminate a broker's employment if the specified minimum production is not met. This is just one example of the many possible conditions that firms impose on their employees. It is the broker's responsibility to read, review and understand the terms of their employment prior to entering into any agreement.

As a commission-based employee of the firm, you have unlimited opportunities to generate income for yourself and the firm. You indicated that you were given 200 accounts, each containing less than $200,000 in assets and that you perceived this as way for your “aggressive” sales manager to force you out of the office. Rather than view the situation you found yourself in as a negative, you should have viewed it as an opportunity to grow your business by building your client base and increasing your assets under management. Many lower producing brokers would welcome the opportunity to develop 200 accounts.

It is critical to remember that how you handle difficult tasks or respond to what you perceive as an unpleasant situation will often be determinative of an employer's assessment of your capabilities and worth within the organization. Sound and prudent business practices dictate that an employer's limited resources will be put to work in the most beneficial areas.

The addition or removal of administrative assistance is commonly predicated upon the productivity of the recipient of the assistance. The mere fact that having limited assistance caused you to be responsible for certain administrative tasks does not change your employment status or your employer's responsibilities to you. Unless specifically contracted for, severance pay is not a right conferred upon employees. It is a benefit that an employer may choose to provide to a former employee; it is not guaranteed.

Based upon the facts that you provided, it does not appear that your gender had anything to do with your termination and, as such, there would be no claim for discrimination. While the securities industry has always had a legitimate reputation for being male-dominated, in the last several decades it has improved dramatically where opportunities for women are concerned.

You indicated that during your employment in your branch at various times you reported to two different women branch managers. This seems to strongly suggest that women are in fact given opportunities to succeed and advance within your firm.

Moreover, contrary to your contentions that you did not receive consideration in account distributions within the branch, you in fact received a very large number of accounts and had the opportunity to use those accounts to increase your worth within the firm and at the same time increase your own bottom line. That is, as you stated, precisely why you chose to become a broker in the first place.

Robin E. Nackman, Esq.
Smithtown, N.Y.

[email protected]

Ethical Rep is a monthly feature in which more than 30 prominent securities attorneys, experts and law school professors help Rep. readers deal with work-related ethical quandaries. Have you encountered a situation at work that makes you uncomfortable? Are you confused about how your responsibilities to clients might change as regulations continue to evolve? Drop a line to Rep.'s contributing editor, Ann Therese Palmer, and our group of experts will help you work through the problem.

The Ethical Rep.
Registered Rep.
249 West 17th Street, Third
New York, N.Y. 10011-5300
[email protected]
Fax: 913-514-3890.

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